| Florida                                                        | 20-3217152                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 525 Plymouth Road, Suite 310 Plymouth Meeting, PA 19462   |
| (Address of principal executive offices) (zip code)            |

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

----

| INDEX    |
|----------|
|     |   |   |   |
| PART I.  | FINANCIAL INFORMATION |   |
|     |   |   |   |
|     | ITEM 1 | Financial Statements |   |
|     |   | Balance sheets as of March 31, 2011 (unaudited) and June 30, 2010 | 3 |
|     |   |   |   |
|     |   | Statements of operations for the three and nine months ended March 31, 2011 and 2010, and for the period from July 22, 2005 (inception) through March 31, 2011 (unaudited) | 4 |
|     |   |   |   |
|     |   | Statement of changes in stockholders’ equity (deficiency) for the period from July 22, 2005 (inception) through March 31, 2011 (unaudited) | 5-10 |
|     |   |   |   |
|     |   | Statements of cash flows for the nine months ended March 31, 2011 and 2010, and cumulative from July 22, 2005 (inception) through March 31, 2011 (unaudited) | 11 |
|     |   |   |   |
|     |   | Notes to financial statements (unaudited) | 12-23 |
|     |   |   |   |
|     | ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24-28 |
|     |   |   |   |
|     | ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 28 |
|     |   |   |   |
|     | ITEM 4. | Controls and Procedures | 29-30 |
|     |   |   |   |
| PART II. | OTHER INFORMATION |   |
|     |   |   |   |
|     | ITEM 1. | Legal Proceedings | 31 |
|     | ITEM 1A. | Risk Factors | 31 |
|     | ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 31 |
|     | ITEM 3. | Defaults Upon Senior Securities | 31 |
|     | ITEM 4. | (Removed and Reserved) | 31 |
|     | ITEM 5. | Other Information | 31 |
|     | ITEM 6. | Exhibits | 32 |
|     |   |   |   |
|     | SIGNATURES | 33 |

----

|                                                                                                                                      |   | March 31,   |       |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|----------|--------|
|                                                                                                                                      |   | 2011        |       |   | June 30, |   |
|                                                                                                                                      |   | (unaudited) |       |   | 2010     |   |
| ASSETS                                                                                                                                    |   |        |       |   |     |   |
|                                                                                                                                      |   |        |       |   |     |   |
| Cash                                                                                                                                      |   | $           | 20,303     |   |     | $      | 45,740 |   |
| Accounts receivable - net                                                                                                                 |   |        | 3,450      |   |     |   | 1,000 |   |
| Inventories                                                                                                                               |   |        | 72,377     |   |     |   | 78,723 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total current assets                                                                                                                      |   |        | 96,130     |   |     |   | 125,463 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Trademark                                                                                                                                 |   |        | 325        |   |     |   | 325 |   |
| Security deposit                                                                                                                          |   |        | 6,000      |   |     |   | 6,000 |   |
| Intangible asset - license, net of accumulated amortization                                                                               |   |        | 876,835    |   |     |   | 926,286 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total assets                                                                                                                              |   | $           | 979,290    |   |     | $      | 1,058,074 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                                                  |   |        |       |   |     |   |   |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| CURRENT LIABILITIES                                                                                                                       |   |        |       |   |     |   |   |   |
| Accounts payable                                                                                                                          |   | $           | 290,592    |   |     | $      | 127,460 |   |
| Accrued expenses                                                                                                                          |   |        | 304,254    |   |     |   | 291,908 |   |
| Deposits                                                                                                                                  |   |        | 6,750      |   |     |   | - |   |
| Deferred revenue                                                                                                                          |   |        | 14,400     |   |     |   | - |   |
| Accrued royalties payable - current                                                                                                       |   |        | 615,965    |   |     |   | 30,000 |   |
| Licensing fees - current                                                                                                                  |   |        | 344,145    |   |     |   | 57,500 |   |
| Notes payable and advances                                                                                                                |   |        | 155,000    |   |     |   | 40,000 |   |
| Convertible notes payable                                                                                                                 |   |        | 416,620    |   |     |   | 214,429 |   |
| Derivative liability                                                                                                                      |   |        | 50,000     |   |     |   | - |   |
| Due to officers                                                                                                                           |   |        | 106,080    |   |     |   | 88,508 |   |
| Due to stockholders                                                                                                                       |   |        | 29,500     |   |     |   | 104,796 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total current liabilities                                                                                                                 |   |        | 2,333,306  |   |     |   | 954,601 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Accrued royalties payable - net of current portion                                                                                        |   |        | -          |   |     |   | 520,154 |   |
| Licensing fees - net of current portion                                                                                                   |   |        | -          |   |     |   | 259,774 |   |
| Deferred revenue -net of current portion                                                                                                  |   |        | 168,700    |   |     |   | 186,100 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total liabilities                                                                                                                         |   |        | 2,502,006  |   |     |   | 1,920,629 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| STOCKHOLDERS' EQUITY DEFICIENCY                                                                                                           |   |        |       |   |     |   |   |   |
| Common stock, par value $.0001 per share; 500,000,000 and 250,000,000 shares authorized at March 31, 2011 and June 30, 2010, respectively |   |        | 22,361     |   |     |   | 14,903 |   |
| Common stock to-be-issued                                                                                                                 |   |        | 11,586     |   |     |   | 10,500 |   |
| Additional paid-in-capital                                                                                                                |   |        | 5,414,671  |   |     |   | 4,925,190 |   |
| Preferred Series A stock, par value $.001 per share; 1,000,000 shares authorized                                                          |   |        | -          |   |     |   | - |   |
| Deficit accumulated during the development stage                                                                                          |   |        | (6,971,334 | )      |     |   | (5,813,148 | ) |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total stockholders' deficiency                                                                                                            |   |        | (1,522,716 | )      |     |   | (862,555 | ) |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
| Total liabilities and stockholders' equity deficiency                                                                                     |   | $           | 979,290    |   |     | $      | 1,058,074 |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |
|                                                                                                                                      |   |        |       |   |     |   |   |   |

----

|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |
|---------------------------------------------------|--------|--------------|-------------|--------|--------------|--------|-------------|-------------|--------|--------|-------------|--------|--------|---------------|-------------|
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   | July 22, 2005 |        |
|                                              |   | Three months |        |   | Three months |   |        | Nine months |   |   | Nine months |   |   | (inception)   |        |
|                                              |   | ended        |        |   | ended        |   |        | ended       |   |   | ended       |   |   | through       |        |
|                                              |   | March 31,    |        |   | March 31,    |   |        | March 31,   |   |   | March 31,   |   |   | March 31,     |        |
|                                              |   | 2011         |        |   | 2010         |   |        | 2011        |   |   | 2010        |   |   | 2011          |        |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |
| REVENUES                                          |   | $            | 30,088      |   |         | $      | 23,500      |        |   | $      | 136,778     |   |   | $             | 47,199      |   |   | $ | 374,604 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| COST OF GOODS SOLD                                |   |         | 27,052      |   |         |   | 18,220      |        |   |   | 133,965     |   |   |          | 35,128      |   |   |   | 327,564 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Gross profit                                      |   |         | 3,036       |   |         |   | 5,280       |        |   |   | 2,813       |   |   |          | 12,071      |   |   |   | 47,040 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| EXPENSES                                          |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Selling, general and administrative expenses      |   |         | 227,098     |   |         |   | 236,050     |        |   |   | 801,450     |   |   |          | 723,109     |   |   |   | 6,488,445 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Loss from operations                              |   |         | (224,062    | )      |         |   | (230,770    | )           |   |   | (798,637    | )      |   |          | (711,038    | ) |   |   | (6,441,405 | ) |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Gain on restructuring of troubled debt            |   |         | -           |   |         |   | (339,137    | )           |   |   | -           |   |   |          | (339,137    | ) |   |   | (339,137 | ) |
| Interest expense                                  |   |         | 23,527      |   |         |   | 6,776       |        |   |   | 62,396      |   |   |          | 13,439      |   |   |   | 132,853 |   |
| Accretion of accrued royalties and licensing fees |   |         | 25,953      |   |         |   | 26,509      |        |   |   | 95,181      |   |   |          | 87,577      |   |   |   | 323,382 |   |
| Amortization expense                              |   |         | 65,033      |   |         |   | 18,461      |        |   |   | 201,972     |   |   |          | 56,808      |   |   |   | 412,831 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Income (loss) before provision for income taxes   |   |         | (338,575    | )      |         |   | 56,621      |        |   |   | (1,158,186  | )      |   |          | (529,725    | ) |   |   | (6,971,334 | ) |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Provision for income taxes                        |   |         | -           |   |         |   | -           |        |   |   | -           |   |   |          | -           |   |   |   | - |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Net income (loss)                                 |   | $            | (338,575    | )      |         | $      | 56,621      |        |   | $      | (1,158,186  | )      |   | $             | (529,725    | ) |   | $ | (6,971,334 | ) |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Net income (loss) per share basic and diluted     |   | $ nil   |        |   | $ nil   |   |        | $ nil  |   |   | $ nil  |   |   | $             | (0.11       | ) |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Basic weighted average common shares              |   |         | 196,563,601 |   |         |   | 119,750,375 |        |   |   | 172,839,103 |   |   |          | 108,736,851 |   |   |   | 63,325,369 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
| Diluted weighted average common shares            |   |         | 196,563,601 |   |         |   | 144,288,615 |        |   |   | 172,839,103 |   |   |          | 108,736,851 |   |   |   | 63,325,369 |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |
|                                              |   |         |        |   |         |   |        |        |   |   |        |   |   |          |        |   |   |   |   |   |

----

|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------|--------|---------------------------|------------|--------|-------------------------------------|--------|---------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                      |   | Common stock to-be-issued |       |   | Common stock issued and outstanding |   |    | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|                                                                      |   | Shares                    |       |   | Amount                              |   |    | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |   |
| Balance July 22, 2005 (inception)                                         |   |                      | -          |   |                                | $      | -       |                                            |   |   | -                          |   |   | $                                                | -      |   |                                         |   | -      |   |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |   | $ | - |   |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to be issued in connection with Incoproation (July 22, 2005) |   |                      | 4,000,000  |   |                                | $      | 10,000  |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | 10,000 |   |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to be issued for consulting services                         |   |                      | 16,150,000 |   |                                |   | 40,375  |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | 40,375 |   |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued - private placement, net of issuance costs of $58,255 |   |                      | 461,750    |   |                                |   | 126,445 |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | 126,445 |   |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                  |   |                      | -          |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | (64,361 | ) |   |   | (64,361 | ) |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2006                                                     |   |                      | 20,611,750 |   |                                | $      | 176,820 |                                            |   |   | -                          |   |   | $                                                | -      |   |                                         |   | -      |   |   | $      | -      |   |   | $      | -      |   |   | $ | (64,361 | ) |   | $ | 112,459 |   |
|                                                                      |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |
|---------------------------------------------|--------|---------------------------|-------------|--------|-------------------------------------|--------|----------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|
|                                        |   | Common stock to-be-issued |        |   | Common stock issued and outstanding |   |     | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|                                        |   | Shares                    |        |   | Amount                              |   |     | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |      |
| Issuance of shares                          |   |                      | (20,611,750 | )      |                                | $      | (176,820 | )                                               |   |   | 20,611,750                 |   |   | $                                                | 2,061  |   |                                         |   | -      |   |   | $      | -      |   |   | $      | 174,759   |   |   | $ | - |   |   | $ | - |   |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Beneficial conversion of loan discount      |   |                      | -           |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 18,750    |   |   |   | - |   |   |   | 18,750 |   |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common stock issued for consulting services |   |                      | -           |   |                                |   | -        |                                            |   |   | 660,000                    |   |   |                                             | 66     |   |                                         |   | -      |   |   |   | -      |   |   |   | 622,334   |   |   |   | - |   |   |   | 622,400 |   |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance of options as compensation         |   |                      | -           |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 231,300   |   |   |   | - |   |   |   | 231,300 |   |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Net loss                                    |   |                      | -           |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -         |   |   |   | (1,113,231 | ) |   |   | (1,113,231 | ) |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2007                       |   |                      | -           |   |                                | $      | -        |                                            |   |   | 21,271,750                 |   |   | $                                                | 2,127  |   |                                         |   | -      |   |   | $      | -      |   |   | $      | 1,047,143 |   |   | $ | (1,177,592 | ) |   | $ | (128,322 | ) |
|                                        |   |                      |        |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |

----

|                                                          |   | Common stock to-be-issued |      |   | Common stock issued and outstanding |   |    | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|---------------------------------------------------------------|--------|---------------------------|-----------|--------|-------------------------------------|--------|---------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                          |   | Shares                    |      |   | Amount                              |   |    | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |   |
| Common stock to-be-issued                                     |   |                      | 1,750,000 |   |                                | $      | 355,000 |                                            |   |   | -                          |   |   | $                                                | -      |   |                                         |   | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 355,000 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares                                            |   |                      | -         |   |                                |   | -       |                                            |   |   | 4,330,000                  |   |   |                                             | 433    |   |                                         |   | - |   |   |   | - |   |   |   | 468,567 |   |   |   | - |   |   |   | 469,000 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares as repayment of amount due to stockholders |   |                      | -         |   |                                |   | -       |                                            |   |   | 467,626                    |   |   |                                             | 47     |   |                                         |   | - |   |   |   | - |   |   |   | 70,097 |   |   |   | - |   |   |   | 70,144 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for consulting services                   |   |                      | -         |   |                                |   | -       |                                            |   |   | 5,277,500                  |   |   |                                             | 528    |   |                                         |   | - |   |   |   | - |   |   |   | 829,101 |   |   |   | - |   |   |   | 829,629 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of options as compensation                           |   |                      | -         |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | 582,937 |   |   |   | - |   |   |   | 582,937 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise of options                                           |   |                      | -         |   |                                |   | -       |                                            |   |   | 125,000                    |   |   |                                             | 12     |   |                                         |   | - |   |   |   | - |   |   |   | 301 |   |   |   | - |   |   |   | 313 |   |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                      |   |                      | -         |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,289,370 | ) |   |   | (2,289,370 | ) |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2008                                         |   |                      | 1,750,000 |   |                                | $      | 355,000 |                                            |   |   | 31,471,876                 |   |   | $                                                | 3,147  |   |                                         |   | - |   |   | $ | - |   |   | $ | 2,998,146 |   |   | $ | (3,466,962 | ) |   | $ | (110,669 | ) |
|                                                          |   |                      |      |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                          |   | Common stock to-be-issued |       |   | Common stock issued and outstanding |   |     | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|---------------------------------------------------------------|--------|---------------------------|------------|--------|-------------------------------------|--------|----------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                          |   | Shares                    |       |   | Amount                              |   |     | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |   |
| Cancellation of common stock to-be-issued                     |   |                      | (1,500,000 | )      |                                | $      | (330,000 | )                                               |   |   | -                          |   |   | $                                                | -      |   |                                         |   | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | (330,000 | ) |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares                                            |   |                      | (250,000   | )      |                                |   | (25,000  | )                                               |   |   | 20,849,999                 |   |   |                                             | 2,085  |   |                                         |   | - |   |   |   | - |   |   |   | 113,615 |   |   |   | - |   |   |   | 90,700 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares as repayment of amount due to officers     |   |                      | -          |   |                                |   | -        |                                            |   |   | 1,000,000                  |   |   |                                             | 100    |   |                                         |   | - |   |   |   | - |   |   |   | 49,900 |   |   |   | - |   |   |   | 50,000 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares as repayment of amount due to stockholders |   |                      | -          |   |                                |   | -        |                                            |   |   | 666,111                    |   |   |                                             | 67     |   |                                         |   | - |   |   |   | - |   |   |   | 41,483 |   |   |   | - |   |   |   | 41,550 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beneficial conversion of loan discount                        |   |                      | -          |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | 22,500 |   |   |   | - |   |   |   | 22,500 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for consulting services                   |   |                      | -          |   |                                |   | -        |                                            |   |   | 38,436,000                 |   |   |                                             | 3,843  |   |                                         |   | - |   |   |   | - |   |   |   | 697,038 |   |   |   | - |   |   |   | 700,881 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of options as compensation                           |   |                      | -          |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | 1,492 |   |   |   | - |   |   |   | 1,492 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock to-be-issued                                     |   |                      | 500,000    |   |                                |   | 2,500    |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,500 |   |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                      |   |                      | -          |   |                                |   | -        |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,423,395 | ) |   |   | (1,423,395 | ) |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2009                                         |   |                      | 500,000    |   |                                | $      | 2,500    |                                            |   |   | 92,423,986                 |   |   | $                                                | 9,242  |   |                                         |   | - |   |   | $ | - |   |   | $ | 3,924,174 |   |   | $ | (4,890,357 | ) |   | $ | (954,441 | ) |
|                                                          |   |                      |       |   |                                |   |     |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |
|---------------------------------------------------------------|--------|---------------------------|-----------|--------|-------------------------------------|--------|--------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|
|                                                          |   | Common stock to-be-issued |      |   | Common stock issued and outstanding |   |   | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|                                                          |   | Shares                    |      |   | Amount                              |   |   | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |      |
| Issuance of shares                                            |   |                      | (500,000  | )      |                                | $      | (2,500 | )                                               |   |   | 24,300,001                 |   |   | $                                                | 2,430  |   |                                         |   | 110    |   |   | $      | -      |   |   | $      | 426,070   |   |   | $ | - |   |   | $ | 426,000 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance of Preferred Stock as repayment of note payable      |   |                      | -         |   |                                |   | -      |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | 12     |   |   |   | -      |   |   |   | 30,000    |   |   |   | - |   |   |   | 30,000 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Beneficial conversion of loan discount                        |   |                      | -         |   |                                |   | -      |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 115,551   |   |   |   | - |   |   |   | 115,551 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common stock issued for consulting services                   |   |                      | -         |   |                                |   | -      |                                            |   |   | 31,058,333                 |   |   |                                             | 3,106  |   |                                         |   | -      |   |   |   | -      |   |   |   | 406,470   |   |   |   | - |   |   |   | 409,576 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in connection with issuance of convertible debt |   |                      | -         |   |                                |   | -      |                                            |   |   | 1,250,000                  |   |   |                                             | 125    |   |                                         |   | -      |   |   |   | -      |   |   |   | 21,125    |   |   |   | - |   |   |   | 21,250 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance of options as compensation                           |   |                      | -         |   |                                |   | -      |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 1,800     |   |   |   | - |   |   |   | 1,800 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common stock to-be-issued                                     |   |                      | 2,066,667 |   |                                |   | 10,500 |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -         |   |   |   | - |   |   |   | 10,500 |   |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Net loss                                                      |   |                      | -         |   |                                |   | -      |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -         |   |   |   | (922,791 | ) |   |   | (922,791 | ) |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance June 30, 2010                                         |   |                      | 2,066,667 |   |                                | $      | 10,500 |                                            |   |   | 149,032,320                |   |   | $                                                | 14,903 |   |                                         |   | 122    |   |   | $      | -      |   |   | $      | 4,925,190 |   |   | $ | (5,813,148 | ) |   | $ | (862,555 | ) |
|                                                          |   |                      |      |   |                                |   |   |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |

----

|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |
|------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|--------|-------------------------------------|--------|---------|-------------------------------------------------|--------|--------|----------------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|
|                                                                                                       |   | Common stock to-be-issued |       |   | Common stock issued and outstanding |   |    | Preferred series A stock issued and outstanding |   |   | Additional paid-in-capital |   |   | Deficit accumulated during the development stage |   |   | Total stockholders' equity (deficiency) |   |
|                                                                                                       |   | Shares                    |       |   | Amount                              |   |    | Shares                                          |   |   | Amount                     |   |   | Shares                                           |   |   | Amount                                       |   |   |   |   |   |   |   |   |   |      |
| Issuance of shares (unaudited)                                                                             |   |                      | (2,066,667 | )      |                                | $      | (10,500 | )                                               |   |   | 10,993,334                 |   |   | $                                                | 1,099  |   |                                         |   | -      |   |   | $      | -      |   |   | $      | 43,701    |   |   | $ | - |   |   | $ | 34,300 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Beneficial conversion of loan discount (unaudited)                                                         |   |                      | -          |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 29,125    |   |   |   | - |   |   |   | 29,125 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common stock issued for consulting services (unaudited)                                                    |   |                      | -          |   |                                |   | -       |                                            |   |   | 24,924,473                 |   |   |                                             | 2,493  |   |                                         |   | -      |   |   |   | -      |   |   |   | 211,537   |   |   |   | - |   |   |   | 214,030 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in connection with settlement of accounts payable (unaudited)                                |   |                      | -          |   |                                |   | -       |                                            |   |   | 1,049,868                  |   |   |                                             | 105    |   |                                         |   | -      |   |   |   | -      |   |   |   | 11,267    |   |   |   | - |   |   |   | 11,372 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in connection with conversion of convertible notes payable plus accrued interest (unaudited) |   |                      | -          |   |                                |   | -       |                                            |   |   | 12,612,964                 |   |   |                                             | 1,261  |   |                                         |   | -      |   |   |   | -      |   |   |   | 86,056    |   |   |   | - |   |   |   | 87,317 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in connection as repayment of loans from stockholders plus accrued interest (unaudited)      |   |                      | -          |   |                                |   | -       |                                            |   |   | 15,399,285                 |   |   |                                             | 1,540  |   |                                         |   | -      |   |   |   | -      |   |   |   | 102,206   |   |   |   | - |   |   |   | 103,746 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in connection with conversion of preferred series A stock (unaudited)                        |   |                      | -          |   |                                |   | -       |                                            |   |   | 9,000,000                  |   |   |                                             | 900    |   |                                         |   | (36    | )      |   |   | -      |   |   |   | (900      | ) |   |   | - |   |   |   | - |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in addition to issuance of notes payable (unaudited)                                         |   |                      | -          |   |                                |   | -       |                                            |   |   | 450,000                    |   |   |                                             | 45     |   |                                         |   | -      |   |   |   | -      |   |   |   | 4,455     |   |   |   | - |   |   |   | 4,500 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Shares issued in addition to issuance of convertible notes payable (unaudited)                             |   |                      | -          |   |                                |   | -       |                                            |   |   | 150,000                    |   |   |                                             | 15     |   |                                         |   | -      |   |   |   | -      |   |   |   | 1,485     |   |   |   | - |   |   |   | 1,500 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Issuance of options in connection with issuance of convertible notes payable (unaudited)                   |   |                      | -          |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | 549       |   |   |   | - |   |   |   | 549 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Common stock to-be-issued (unaudited)                                                                      |   |                      | 2,000,000  |   |                                |   | 11,586  |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -         |   |   |   | - |   |   |   | 11,586 |   |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Net loss (unaudited)                                                                                       |   |                      | -          |   |                                |   | -       |                                            |   |   | -                          |   |   |                                             | -      |   |                                         |   | -      |   |   |   | -      |   |   |   | -         |   |   |   | (1,158,186 | ) |   |   | (1,158,186 | ) |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Balance March 31, 2011                                                                                     |   |                      | 2,000,000  |   |                                | $      | 11,586  |                                            |   |   | 223,612,244                |   |   | $                                                | 22,361 |   |                                         |   | 86     |   |   | $      | -      |   |   | $      | 5,414,671 |   |   | $ | (6,971,334 | ) |   | $ | (1,522,716 | ) |
|                                                                                                       |   |                      |       |   |                                |   |    |                                            |   |   |                       |   |   |                                             |   |   |                                         |   |   |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |

----

|                                                                                              |   |        |       |   |        |   |     | July 22, 2005 |   |
|---------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|----------|---------------|--------|
|                                                                                              |   | Nine months |       |   | Nine months |   |     | (inception)   |   |
|                                                                                              |   | ended       |       |   | ended       |   |     | through       |   |
|                                                                                              |   | March 31,   |       |   | March 31,   |   |     | March 31,     |   |
|                                                                                              |   | 2011        |       |   | 2010        |   |     | 2011          |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                             |   |        |       |   |        |   |     |          |   |
| Net loss                                                                                          |   | $           | (1,158,186 | )      |        | $      | (529,725 | )             |   | $ | (6,971,334 | ) |
| Adjustments to reconcile net loss to net cash used in operating                                   |   |        |       |   |        |   |     |          |   |
| activities:                                                                                       |   |        |       |   |        |   |     |          |   |   |   |   |
|   Accretion of accrued royalties and licensing fees                                     |   |        | 95,181     |   |        |   | 87,577   |          |   |   | 323,382 |   |
|   Gaim on restructuring of troubled debt                                                |   |        | -          |   |        |   | (339,137 | )             |   |   | (339,137 | ) |
|   Amortization of  intangible asset - license                                 |   |        | 49,451     |   |        |   | 49,451   |          |   |   | 218,029 |   |
|   Common stock issued for consulting services                                           |   |        | 214,030    |   |        |   | 268,726  |          |   |   | 2,816,891 |   |
|   Issuance of stock options - employee                                                  |   |        | -          |   |        |   | 1,441    |          |   |   | 817,529 |   |
|   Amortization of beneficial conversion discount                                        |   |        | 152,521    |   |        |   | 7,357    |          |   |   | 213,552 |   |
|   Changes in operating assets and liabilities                                           |   |        |       |   |        |   |     |          |   |   |   |   |
|     (Increase)/Decrease in:                                                   |   |        |       |   |        |   |     |          |   |   |   |   |
|          Accounts receivable                         |   |        | (2,450     | )      |        |   | (7,725   | )             |   |   | (3,450 | ) |
|          Other current asstets                       |   |        |       |   |        |   | -        |          |   |   |   |   |
|          Inventories                                 |   |        | 6,346      |   |        |   | (4,174   | )             |   |   | (72,377 | ) |
|          Security deposit                            |   |        | -          |   |        |   | (6,000   | )             |   |   | (6,000 | ) |
|     Increase/(Decrease) in:                                                   |   |        |       |   |        |   |     |          |   |   |   |   |
|          Accounts payable and accrued expenses       |   |        | 197,462    |   |        |   | (84,304  | )             |   |   | 620,279 |   |
|          Deposits for orders                         |   |        | 6,750      |   |        |   | 135,700  |          |   |   | 6,750 |   |
|          Accrued royalties and licensing fee payable |   |        | (2,500     | )      |        |   | (22,500  | )             |   |   | (119,000 | ) |
|          Deferred revenue                            |   |        | (3,000     | )      |        |   | 65,400   |          |   |   | 183,100 |   |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| Net cash used in operating activities                                                             |   |        | (444,395   | )      |        |   | (377,913 | )             |   |   | (2,311,786 | ) |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                             |   |        |       |   |        |   |     |          |   |   |   |   |
| Trademark                                                                                         |   |        | -          |   |        |   | -        |          |   |   | (325 | ) |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| Net cash used in investing activities                                                             |   |        | -          |   |        |   | -        |          |   |   | (325 | ) |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                             |   |        |       |   |        |   |     |          |   |   |   |   |
| Net proceeds from private placement                                                               |   |        | -          |   |        |   | -        |          |   |   | 126,445 |   |
| Proceeds from sale of founders shares                                                             |   |        | -          |   |        |   | -        |          |   |   | 10,000 |   |
| Net proceeds from sale of stock and exercise of stock options                                     |   |        | 34,300     |   |        |   | 332,500  |          |   |   | 1,058,313 |   |
| Proceeds from stock to-be-issued                                                                  |   |        | 11,586     |   |        |   | -        |          |   |   | 11,586 |   |
| Proceeds from issuance of notes payable                                                           |   |        | 149,000    |   |        |   | 55,000   |          |   |   | 319,000 |   |
| Repayment of notes payable                                                                        |   |        | (34,000    | )      |        |   | -        |          |   |   | (59,000 | ) |
| Advances/(repayments) from officers                                                               |   |        | 17,572     |   |        |   | (14,265  | )             |   |   | 156,080 |   |
| Advances from stockholders                                                                        |   |        | 26,500     |   |        |   | 17,672   |          |   |   | 242,990 |   |
| Proceeds from issuance of convertible notes payable                                               |   |        | 214,000    |   |        |   | -        |          |   |   | 479,000 |   |
| Repayment of convertible notes payable                                                            |   |        | -          |   |        |   | (12,000  | )             |   |   | (12,000 | ) |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| Net cash provided by financing activities                                                         |   |        | 418,958    |   |        |   | 378,907  |          |   |   | 2,332,414 |   |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| NET INCREASE/(DECREASE) IN CASH                                                                   |   |        | (25,437    | )      |        |   | 994      |          |   |   | 20,303 |   |
| CASH, beginning of period                                                                         |   |        | 45,740     |   |        |   | -        |          |   |   | - |   |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |
| CASH, end of period                                                                               |   | $           | 20,303     |   |        | $      | 994      |          |   | $ | 20,303 |   |
|                                                                                              |   |        |       |   |        |   |     |          |   |   |   |   |

| Supplemental disclosures of cash flow information for the nine months ended March 31, 2011: |
|---------------------------------------------------------------------------------------------|

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|              |   | March 31, 2011 |   |   | June 30, 2010 |   |
|-------------------|--------|----------------|--------|--------|---------------|--------|
| Raw materials     |   | $              | 37,670 |   |          | $      | 5,784 |   |
| Work-in-progress  |   |           | 25,597 |   |          |   | 72,939 |   |
| Finished goods    |   |           | 9,110  |   |          |   | -0- |   |
| Total inventories |   | $              | 72,377 |   |          | $      | 78,723 |   |

|                            |   | March 31, |      |   | June 30, |   |
|---------------------------------|--------|-----------|-----------|--------|----------|--------|
|                            |   | 2011      |      |   | 2010     |   |
| Cost of license described above |   | $         | 1,094,864 |   |     | $      | 1,094,864 |   |
| Less: accumulated amortization  |   |      | 218,029   |   |     |   | 168,578 |   |
| License, net                    |   | $         | 876,835   |   |     | $      | 926,286 |   |
|                            |   |      |      |   |     |   |   |   |

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|                                        |   | Options |       |   | Weighted Average Exercise Price |   |
|---------------------------------------------|--------|---------|------------|--------|---------------------------------|--------|
| Outstanding as of July 22, 2005 (inception) |   |    | -          |   |                            | $      | - |   |
| Granted                                     |   |    | 125,000    |   |                            |   | 0.0025 |   |
| Exercised                                   |   |    | -          |   |                            |   | - |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | -          |   |                            |   | - |   |
| Outstanding as of June 30, 2006             |   |    | 125,000    |   |                            | $      | 0.0025 |   |
| Granted                                     |   |    | 500,000    |   |                            |   | 0.5500 |   |
| Exercised                                   |   |    | -          |   |                            |   | - |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | -          |   |                            |   | - |   |
| Outstanding as of June 30, 2007             |   |    | 625,000    |   |                            | $      | 0.4400 |   |
| Granted                                     |   |    | 3,100,000  |   |                            |   | 0.0990 |   |
| Exercised                                   |   |    | 125,000    |   |                            |   | 0.0025 |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | -          |   |                            |   | - |   |
| Outstanding as of June 30, 2008             |   |    | 3,600,000  |   |                            | $      | 0.1610 |   |
| Granted                                     |   |    | 100,000    |   |                            |   | .0150 |   |
| Exercised                                   |   |    | -          |   |                            |   | - |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | -          |   |                            |   | - |   |
| Outstanding as of June 30, 2009             |   |    | 3,700,000  |   |                            | $      | 0.1577 |   |
| Granted                                     |   |    | 10,249,997 |   |                            |   | .0021 |   |
| Exercised                                   |   |    | -          |   |                            |   | - |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | -          |   |                            |   | - |   |
| Outstanding as of June 30, 2010             |   |    | 13,949,997 |   |                            | $      | .0434 |   |
| Granted                                     |   |    | 100,000    |   |                            |   | .005 |   |
| Exercised                                   |   |    | -          |   |                            |   | - |   |
| Forfeited                                   |   |    | -          |   |                            |   | - |   |
| Expired                                     |   |    | 100,000    |   |                            |   | .005 |   |
| Outstanding as of March 31, 2011            |   |    | 13,949,997 |   |                            | $      | .0434 |   |

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| Year ending June 30, 2011 |   | $ | 8,801   |   |
|---------------------------|--------|---|---------|--------|
| 2012                      |   | $ | 36,230  |   |
| 2013                      |   | $ | 38,689  |   |
| 2014                      |   | $ | 41,147  |   |
| 2015                      |   | $ | 24,839  |   |
| Total Lease Commitment    |   | $ | 149,706 |   |

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| a)   | We did not have sufficient personnel in our accounting and financial reporting functions. As a result we were not able to achieve adequate separation of duties and were not able to provide for adequate review of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of U.S. GAAP commensurate with out complexity and our financial accounting and reporting requirements. This control deficiency is pervasive in nature. Further, there is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis as a result; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | We did not document or test our key controls over financial reporting in accordance with Section 404 of the Sarbanes Oxley Act of 2002. As a result, we cannot provide proper documentation of the framework for our internal controls nor the results of testing of such controls. There is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis without the ability to determine if our controls are effective. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.01 | Securities Purchase Agreement, dated as of March 3, 2011, by and between WaterPure International, Inc. and Asher Enterprises, Inc. |
|-------|------------------------------------------------------------------------------------------------------------------------------------|

| 10.02 | Form of Convertible Debenture, issued March 3, 2011 |
|-------|-----------------------------------------------------|

| 10.03 | Securities Purchase Agreement, dated as of May 18, 2011, by and between WaterPure International, Inc. and Asher Enterprises, Inc. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------|

| 10.04 | Form of Convertible Debenture, issued May 18, 2011 |
|-------|----------------------------------------------------|

| 31.01 | Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.02 | Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.01 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Date:  May 20, 2011 | By: /s/ PAUL S. LIPSCHUTZ                                                         |
|-------------------------------|----------------------------------------------------------------------------------------|
|                          | Paul S. Lipschutz                                                                      |
|                          | President (Principal Executive Officer)                                                |
|                          |                                                                                   |
| Date:  May 20, 2011 | By: /s/ ROBERT F. ORR                                                             |
|                          | Robert F. Orr                                                                          |
|                          | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |