UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to ________

COMMISSION FILE NUMBER 000-52686

QUANTUM SOLAR POWER CORP.
(Exact name of registrant as specified in its charter)

(505)-216-0725
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   [x] Yes     [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   [ ]  Yes    [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):   [ ] Yes    [x] No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
As of November 5, 2010, the Issuer had 144,293,692 shares of common stock, issued and outstanding.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three month period ended September 30, 2010 are not necessarily indicative of the results that can be expected for the year ending June 30, 2011.

As used in this Quarterly Report, the terms "we,” "us,” "our,” and “Quantum” mean Quantum Solar Power Corp., unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

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The accompanying notes are an integral part of these consolidated financial statements.

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The accompanying notes are an integral part of these consolidated financial statements.

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See accompanying notes to consolidated financial statements.

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Supplemental disclosure with respect to cash flows (Note 7)

The accompanying notes are an integral part of these consolidated financial statements.

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The following table summarizes information about the stock options outstanding at September 30, 2010:

Stock-based compensation

The Company used the Black-Scholes option pricing model to determine the fair value of options granted. During fiscal 2010, the Company granted 500,000 (2009 – Nil; 2008 – Nil) options with a weighted average fair value of $1.91 (2009 – $Nil; 2008 - $Nil) per option to a director of the Company, which is being recognized over the vesting periods of the options.

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Included in accounts payable as at September 30, 2010 is $38,891 due to CIOI, a significant shareholder.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

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ITEM 2.            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements". These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions, include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under this caption "Management's Discussion and Analysis or Plan of Operation" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

OVERVIEW

Quantum Solar Power Corp. is a corporation formed under the laws of the State of Nevada on April 14, 2004 whose principal executive offices are located in Santa Fe, New Mexico, USA. Our principal business is the research, development and marketing of next generation solar power generation devices utilizing our patent pending technology (the “Next Generation Device™ or NGD™ Technology”) for photovoltaic devices that do not use silicon or other, rare semiconductors. Once we have completed development, we expect to derive substantially all revenues from royalty based licensing arrangements.

We are a development stage company. We have not earned any revenue to date and we do not anticipate earning revenue until we have completed the development and testing of our NGD™ Technology devices. Although we have a developed a proof of concept of the NGD™ Technology, we are presently in the development stage of our business and we can provide no assurance that we will be able to complete commercial development or successfully sell or license products incorporating our solar power generation devices, once development and testing is complete. We have had extremely limited operations. Our research and development is conducted at Simon Fraser University located in Burnaby, British Columbia, Canada (“SFU”) on a contractual basis. We have relied on the sale of our securities and loans or capital infusions from our directors and officers to fund our operations to date.

RECENT CORPORATE DEVELOPMENTS

Since the filing of our Annual Report for the fiscal year ended June 30, 2010 with the SEC, we experienced the following significant corporate developments:

Grant of Warrants

On September 27, 2010, our Board of Directors approved the issuance of 370,000 warrants to shareholders who had purchased shares at a price of $2.00 per share. Each warrant entitled the holder to purchase a common share of the Company at $0.01 per share with an expiry date of October 25, 2010.

This enabled previous investors who exercised the warrants to have an average price per share substantially the same as those purchasing shares under our $1.00 per share foreign private placement.

The Warrants were granted to persons who are not “U.S. Persons” as defined under Regulation S of the Securities Act of 1933.

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Foreign Private Placement

Our Board of Directors also approved a private placement offering of up to 5,000,000 shares of our common stock at a price of $1.00 per share (the “Foreign Private Placement”). This offering is only available to persons who are not “U.S. Persons” as defined under Regulation S of the Securities Act.

On October 4, 2010, we issued an aggregate of 1,060,000 shares of common stock pursuant to the provisions of Regulation S of the Securities Act of 1933 (the “Act”) to persons who represented that they were not "U.S. Persons" as defined under Regulation S and that they were not acquiring the shares for the account or benefit of a U.S. Person.

On October 21, 2010, we issued an aggregate of 870,000 shares of common stock pursuant to the provisions of Regulation S of the Securities Act of 1933 (the “Act”) to persons who represented that they were not "U.S. Persons" as defined under Regulation S and that they were not acquiring the shares for the account or benefit of a U.S. Person.

These share issuances represent a portion of the $5,000,000 Foreign Private Placement offering approved by the Company's board of directors on May 28, 2010. There are no assurances that the remainder of the offering will be completed.

Compensatory Shares To Chief Executive Officer

On October 6, 2010, we issued 50,000 shares of our common stock to Daryl J. Ehrmantraut, our President and Chief Executive Officer, as a performance bonus for the fiscal quarter ended September 30, 2010. The shares were issued to Mr. Ehrmantraut pursuant to Section 4(2) of the Act under the terms of the CEO Employment Agreement entered into between us and Mr. Ehrmantraut on January 1, 2010.

Consultant Shares

Also on October 6, 2010, as part consideration for services rendered in accordance with the terms of a business consulting agreement between us and Caisey Harlingten dated April 19, 2010, we issued 30,000 shares of our common stock to Mr. Harlingten. The Shares were issued to Mr. Harlingten pursuant to Regulation S under the Act. Mr. Harlingten represented that he is not a “U.S. Person” as defined under Regulation S and that he is not acquiring the shares for the account or benefit of a U.S. Person.

GENERAL

We were incorporated on April 14, 2004 under the laws of the State of Nevada. Our principal executive offices are located at 3900 Paseo del Sol, Suite A311, Santa Fe, New Mexico, USA.

From 2004 to 2009, we were engaged in the software development business. Our business plan was to develop and commercialize the MediFlow Software Program, a medical tracking software program that will assist healthcare professionals in diagnosing and recommending treatment for patients. We decided to shift our business focus to solar energy in late 2009.

We are currently in the business of developing and marketing our NGD™ Technology for the production of solar energy without the need for expensive silicon based absorber components or other rare earth elements. We acquired the NGD™ Technology under the terms of the Technology Acquisition Agreement described below. The NGD™ Technology which is covered by two provisional U.S. patents differs from conventional solar technology as it does not require expensive silicon based absorber components or other rare earth elements. Researchers at Simon Fraser University in British Columbia, Canada have developed and built a proof of concept prototype of a next generation device utilizing the NGD™ Technology.

We are a development stage company. We have not earned any revenue to date nor have we engaged in any licensing agreements to date. We do not anticipate earning revenue until we have completed the development and testing of our NGD™ Technology. We are presently in the development stage of our business and we can provide no assurance that we will be able to complete commercial development or successfully sell or license products incorporating our solar power generation devices, once development and testing is complete. We have limited operations. We conduct all of our research and development on a contractual basis with Simon Fraser University. We have relied on the sale of our securities and loans or capital infusions from our officers and directors to fund our operations to date.

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Technology Acquisition

We acquired the NGD^TM Technology on December 16, 2009 via agreement (the “Technology Acquisition Agreement”) with Canadian Integrated Optics (IOM) Limited, (“CIO”). In consideration of the NGD™ Technology we issued 71,500,000 shares of our common stock to CIO and Desmond Ross, our former director and executive officer, returned 47,000,000 shares to the treasury.

Under the terms of the Technology Acquisition Agreement we are required to pay for ongoing research and development using the facilities of Simon Fraser University (“SFU”) under CIO’s existing research agreement (the “CIO Research Agreement”) dated April 1, 2010. The CIO Research Agreement is for a term of April 1, 2010 to July 30, 2010.

Under the terms of CIO Research Agreement (via the Technology Acquisition Agreement) we paid $195,219 CDN ($189,362 USD) to SFU between January and September 2010.

CIO has entered into an amendment to this agreement extending its term through December 31, 2010. In consideration of the extension they will pay $310,076 CDN ($300,773 USD). As of September 30 CIO has paid $62,015 CDN against the contract.

In addition we are required to pay additional charges for the use of the clean room facilities at SFU.

NGD™ Technology

Our NGD™ Technology is a patent pending, technology and proof of concept prototype for producing solar power without the necessity of utilizing expensive silicon based absorber components or other rare earth elements.

Solar cells based on the NGD™ Technology can reach a regime of cost and efficiency not obtainable with conventional solar cells. As a result, we believe our NGD™ Technology has the potential to enable the manufacture of solar cells at significantly less cost per Watt than current producers.

Thin Film solar cell technologies have proven inexpensive to manufacture but are at present only capable of efficiencies in the 10% power conversion efficient (“PCE”) range. Crystalline silicon solar cells are in the 15% to 20% PCE range but are very expensive to manufacture due to the cost of silicon processing. The reason for both these shortfalls is directly linked with the semiconductors used in the fabrication process.

All currently available solar cell technologies rely on a photovoltaic effect in which an incoming solar photon knocks loose a negative charge, leaving behind a positive charge, in a semiconducting material such as silicon. The positive and negative charges are then collected through separate conducting layers to be delivered as current to a load. Defects within the semiconductor layer can affect the power conversion efficiency by reducing the voltage and the current delivered to the load. Elimination of these defects can only occur through expensive purification and processing.

The NGD™ Technology’s principle of operation avoids the detrimental effects of defects within the semiconductor absorber layers by disposing of it altogether, and thus has the potential to simultaneously satisfy the requirements of high power conversion efficiencies and low costs. In addition, by eliminating expensive and exotic materials and manufacturing in a continuous rather than batch or wafer based process, we believe module costs can be reduced well below $1 per Watt-peak ^(Wp^{), the nominal price of a solar} module widely recognized as the standard of solar commercial enablement.

The market for solar energy has been limited by the costs of panels and by their low efficiencies. Quantum expects that with its low cost, high efficiency NGD™ that the economics of solar power will prove to be superior to alternatives and that new and unforeseen markets will open for solar devices.

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The solar panel business has been in a high growth phase over the past years however it is not sustainable since the growth has been fundamentally based on the availability of tax incentives, subsidies and other inducements. The economics of unsubsidized solar power are not attractive except in certain niche applications where choices are limited and the high costs can be justified.

An average crystalline silicon cell solar module has an efficiency of 15%, an average thin film cell solar module has an efficiency of 6%. Thin film manufacturing costs potentially are lower, though. Crystalline silicon cell technology forms about 90% of solar cell demand. The balance comes from thin film technologies. Approximately 45% of the cost of a silicon cell solar module is driven by the cost of the silicon wafer, a further 35% is driven by the materials required to assemble the solar module.

Thin film manufacturer First Solar is reported in some publications to have approximately $6 billion in contracts between 2010 and 2013. If First Solar were to have the opportunity to accept contracts worth $1 trillion and had the manufacturing capability to fulfill these contracts they would still be inhibited and negatively governed by material availability. According to the U.S. Geological Survey, there is enough tellurium available in global reserves to meet only 0.02 Terawatts (“TRW”) of energy provision using existing thin film technology. The same applies to San Jose, California-based Nanosolar’s Indium supply. Both companies current material choices (according to the Andrea Feltrin, Alex Freundlich Report, Photovoltaics and Nanostructures Laboratories, Center for Advanced Materials and Physics Department, University of Houston, Texas) limits these companies forever to sub-Gigawatt energy production (maximum 0.02 TRW per year).

Current Thin Film companies are coming close to competing commercially with coal but the materials they use such as tellurium and indium are very rare and capable of meeting only 0.13% of the worldwide energy demand even if they accessed the entire worldwide reserves of these materials.

PLAN OF OPERATION

The following discussion and analysis summarizes our plan of operation for the next twelve months, our results of operations for the three month period ended September 30, 2010 and changes in our financial condition from June 30, 2010. This discussion should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operation included in our Annual Report on Form 10-K for the year ended June 30, 2010 filed with the SEC on September 13, 2010.

If we can obtain sufficient financing we intend to continue the final development of our NGD™ Technology, and identify and engage original equipment manufacturers (“OEM’s”) interested in licensing our technology. We anticipate that the licensing agreements will be between us and OEM’s with the expertise and facilities required to mass manufacture solar cells based on our NGD™ technology and that the OEM’s will distribute the solar cells worldwide using their existing sales and marketing channels and at their expense. The cost of manufacture will be solely the responsibility of the OEM’s. We expect to receive revenue on royalties based on the number of cells produced by the OEM’s. This business model should allow us to maximize capital resources available at startup and through our OEM licensees positively address the demand for high efficiency solar cell devices. This business model should enable us to increase revenues and create brand recognition without the time, capital and risk associated with manufacturing plant construction.

There is no assurance that we will be able to obtain sufficient financing to proceed with our plan of operation.

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RESULTS OF OPERATIONS

Three Months Summary

For the period from inception on April 14, 2004 to September 30, 2010, we have not earned any operating revenue. We had an accumulated net loss of $2,479,539 since inception. We incurred total operating expenses of $2,373,539 since inception.

We have not earned any revenues since inception. We do not anticipate earning revenues until such time as we complete further development of, and enter into licensing agreements for our NGD™ Cell Technology. We are presently in the development stage of our business and we can provide no assurance that we will be able to generate revenues from sales of our product or that the revenues generated will exceed the operating costs of our business.

Administrative Expenses

We have incurred administrative expenses in the amount of $831,823 for the fiscal quarter ended September 30, 2010. Administrative expenses for this period included the following expenses:

Our administrative expenses for the fiscal quarter ended September 30, 2010 have increased as a result of increased operations in the development of our NGD^TM Technology. This has resulted in increased research and development activities and general and administrative expenses. All expenses increased from fiscal 2009 to 2010. Professional fees related to the acquisition of the NGD^TM Technology and meeting our ongoing reporting requirements with the Securities and Exchange Commission.

We anticipate our operating expenses will increase as we undertake our plan of operation. The increase will be attributable to our development, of our NGD™ solar cell technology. We also anticipate our ongoing operating expenses will also increase as a result of our ongoing reporting requirements under the Exchange Act.

Net Loss

We incurred a loss in the amount of $2,479,539 for the period from inception to September 30, 2010. Our loss was attributable to the costs of operating expenses which primarily consisted of research and development costs, general and administrative expenses and professional fees paid in connection with acquiring our assets, preparing and filing our Current, Quarterly and Annual Reports.

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LIQUIDITY AND CAPITAL RESOURCES

Working Capital

Cash Flows

As at September 30, 2010, we had cash of $501,192 and a working capital deficit of $695,821.

The change in our working capital at September 30, 2010 from our year ended June 30, 2010 is primarily a result of the increases in subscriptions received in advance. This increase was offset by decreases in accounts payable and accrued liabilities and our revolving line of credit with CIO. The increase in our cash used during the period ended on September 30, 2010 from the comparable periods of the preceding fiscal years are due to subscriptions received under our foreign private placement offering.

Future Financings

As of September 30, 2010, we had cash on hand of $501,192. Since our inception, we have used our common stock to raise money for our operations and for our acquisition. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation. For these reasons, our auditors stated in their report to our audited financial statements for the year ended June 30, 2010, that there is substantial doubt that we will be able to continue as a going concern.

We have no revenues to date from our inception. We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. We believe that we have obtained sufficient financing to cover our anticipated expenses over the next twelve months. However, there is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing for to fund our planned business activities.

U.S. and Foreign Private Placement Offerings

On May 28, 2010, our Board of Directors approved two concurrent private placements as follows:

U.S. Private Placement

Our Board of Directors approved a private placement offering of up to 5,000,000 shares of our common stock at a price of $1.00 per share (the “U.S. Private Placement”). This offering will be made to United States persons who are accredited investors as defined in Regulation D of the Securities Act. As of September 30, 2010 we have not issued any securities under this offering.

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Foreign Private Placement

Our Board of Directors also approved a concurrent private placement offering of up to 5,000,000 shares of our common stock at a price of $1.00 per share (the “Foreign Private Placement”). This offering is only available to persons who are not “U.S. Persons” as defined under Regulation S of the Securities Act. As of September 30, 2010, we have issued 274,060 shares for proceeds of $274,060.

We intend to use the net proceeds from these financings to further develop its NGD^TM Technology and for working capital purposes. There is no assurance that the U.S. Private Placement or the Foreign Private Placement will be completed on the above terms or at all.

The above does not constitute an offer to sell or a solicitation of an offer to buy any of Quantum’s securities in the United States. The securities have not been registered under the Securities Act and may not be offered or sold within the United States or to U.S. persons unless an exemption from such registration is available.

Significant Trends, Uncertainties and Challenges

We believe that the significant trends, uncertainties and challenges that directly or indirectly affect our financial performance and results of operations include:

• Our ability to achieve module efficiencies and other performance targets through our partners, and to obtain necessary or desired certifications for our photovoltaic modules based on our technology, in a timely manner;

• Our ability to license the technology to effective manufacturers and/or distributers;

• Our ability to achieve projected operational performance and cost metrics;

• Our ability to consummate strategic relationships with key partners, including original equipment manufacturer (OEM) customers, system integrators, value added resellers and distributors who deal directly with manufacturers and end-users.

• Changes in the supply and demand for photovoltaic modules as well as fluctuations in selling prices for photovoltaic modules worldwide;

• Our ability to raise additional capital on terms favorable to us;

• Our future strategic partners’ expansion of their manufacturing facilities, operations and personnel; and

• Our ability and the ability of our distributors, suppliers and customers to manage operations and orders during financial crisis and financial downturn.

Contractual Obligations

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are disclosed in Note 2 to our audited financial statements included in our Annual Report for the year ended June 30, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Foreign Currency Exchange Risk

The Company is actively engaged in research and development activities internationally and is exposed to foreign currency risk. We currently conduct significant research and development operations on a contractual basis at Simon Fraser University in British Columbia, Canada.

We do not hold any derivative instruments and do not engage in any hedging activities. Because most of our purchases and sales will made in Canadian dollars, any exchange rate change affecting the value of the in Canadian dollar relative to the U.S. dollar could have an effect on our financial results as reported in U.S. dollars. If the Canadian dollar were to depreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly reduced. If the in Canadian dollar were to appreciate against the U.S. dollar, amounts reported in U.S. dollars would be correspondingly increased.

Although our reporting currency is the U.S. dollar, we may conduct business and incur costs in the local currencies of other countries in which we may operate, make sales and buy materials. As a result, we are subject to currency translation risk. Further, changes in exchange rates between foreign currencies and the U.S. dollar could affect our future net sales and cost of sales and could result in exchange losses.

We cannot accurately predict future exchange rates or the overall impact of future exchange rate fluctuations on our business, results of operations and financial condition.

Interest Rate Risk

Our exposure to market risks for changes in interest rates relates primarily to our cash equivalents. This can also have an effect on the ability of manufacturers and consumers to obtain sufficient financing to license, manufacture, distribute or purchase a device using our technology.

Commodity and Component Risk

Failure to receive timely delivery of production tools by our future licensee’s equipment suppliers could delay manufacturing capacity and materially and adversely affect our results of operations and financial condition in future periods. The failure of any suppliers to perform could disrupt our future licensee’s supply chain and impair our operations.

If delivery of production tools or raw materials are not made on schedule or at all, then our licensees might be unable to carry out our commercialization and manufacturing plans, produce photovoltaic modules in the volumes and at the times that we expect or generate sufficient revenue from operations, and our business, results of operations and financial condition could be materially and adversely affected.

Credit Risk

We currently do not hold financial instruments that subject us to credit risk. Our receivables are all in the form of security deposits and travel advances to employees and so expose us to minimal risk.

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ITEM 4.      CONTROLS AND PROCEDURES.

As of September 30, 2010, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and procedures are based on the definition of disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Exchange Act.

Based on that evaluation as of September 30, 2010, our management, including the CEO and CFO concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Management, including our CEO and CFO, have concluded that our disclosure controls and procedures provide reasonable assurance that the controls and procedures will meet their desired control objectives. In designing and evaluating our control system, management recognized that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any that may affect our operations have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

During the fiscal quarter ended September 30, 2010, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS.

None.

ITEM 1A.     RISK FACTORS.

If photovoltaic technology is not suitable for widespread adoption, or if sufficient demand for solar modules does not develop or takes longer to develop than we anticipate, we may never earn revenues or become profitable.

The solar energy market is at a relatively early stage of development and the extent to which solar modules will be widely adopted is uncertain. If photovoltaic technology proves unsuitable for widespread adoption or if demand for solar modules fails to develop sufficiently, we may be unable to grow our business or generate sufficient net sales to sustain profitability. In addition, demand for solar modules in our targeted may not develop or may develop to a lesser extent than we anticipate. Many factors may affect the viability of widespread adoption of photovoltaic technology and demand for solar modules, including the following:

An increase in interest rates or lending rates or tightening of the supply of capital in the global financial markets (including a reduction in total tax equity availability) could make it difficult for end-users to finance the cost of a photovoltaic system and could reduce the demand for solar modules utilizing our NGD™ Technology and/or lead to a reduction in the average selling price for photovoltaic modules.

Many of potential solar technology customers will depend on debt financing to fund the initial capital expenditure required to develop, build and purchase a photovoltaic system. As a result, an increase in interest rates or lending rates could make it difficult for our potential customers to secure the financing necessary to develop, build, purchase or install a photovoltaic system on favorable terms, or at all, and thus lower demand for our solar modules which could limit our growth or reduce our net sales. Due to the overall economic outlook, our end-users may change their decision or change the timing of their decision to develop, build, purchase or install a photovoltaic system. In addition, we believe that a significant percentage of our end-users install photovoltaic systems as an investment, funding the initial capital expenditure through a combination of equity and debt. An increase in interest rates and/or lending rates could lower an investor’s return on investment in a photovoltaic system, increase equity return requirements or make alternative investments more attractive relative to photovoltaic systems, and, in each case, could cause these end-users to seek alternative investments. A reduction in the supply of project debt financing or tax equity investments could reduce the number of solar projects that receive financing and thus lower demand for solar modules.

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Existing regulations and policies and changes to these regulations and policies may present technical, regulatory and economic barriers to the purchase and use of photovoltaic products, which may significantly reduce demand for our solar modules.

The market for electricity generation products is heavily influenced by foreign, federal, state and local government regulations and policies concerning the electric utility industry, as well as policies promulgated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. In the United States and in a number of other countries, these regulations and policies have been modified in the past and may be modified again in the future. These regulations and policies could deter end-user purchases of photovoltaic products and investment in the research and development of photovoltaic technology. For example, without a mandated regulatory exception for photovoltaic systems, utility customers are often charged interconnection or standby fees for putting distributed power generation on the electric utility grid. If these interconnection standby fees were applicable to photovoltaic systems, it is likely that they would increase the cost to our end-users of using photovoltaic systems which could make them less desirable, thereby harming our business, prospects, results of operations and financial condition. In addition, electricity generated by photovoltaic systems mostly competes with expensive peak hour electricity, rather than the less expensive average price of electricity. Modifications to the peak hour pricing policies of utilities, such as to a flat rate for all times of the day, would require photovoltaic systems to achieve lower prices in order to compete with the price of electricity from other sources.

We anticipate that solar modules utilizing our technology and their installation will be subject to oversight and regulation in accordance with national and local ordinances relating to building codes, safety, environmental protection, utility interconnection and metering and related matters. It is difficult to track the requirements of individual states and design equipment to comply with the varying standards. Any new government regulations or utility policies pertaining to our solar modules may result in significant additional expenses to us, our resellers and their customers and, as a result, could cause a significant reduction in demand for our solar modules.

We face intense competition from manufacturers of crystalline silicon solar modules, thin film solar modules and solar thermal and concentrated photovoltaic systems; if global supply exceeds global demand, it could lead to a reduction in the average selling price for photovoltaic modules.

The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with the larger electric power industry. Within the global photovoltaic industry, we face competition from crystalline silicon solar module manufacturers, other thin film solar module manufacturers and companies developing solar thermal and concentrated photovoltaic technologies.

Even if demand for solar modules continues to grow, the rapid expansion plans of many solar cell and module manufacturers could create periods where supply exceeds demand.

During any such period, our competitors could decide to reduce their sales price in response to competition, even below their manufacturing cost, in order to generate sales. As a result our partners may be unable to sell solar modules based on our technology at attractive prices, or for a profit, during any period of excess supply of solar modules, which would reduce our net sales and adversely affect our results of operations. Also, we may decide to lower our average selling price to certain customers in certain markets in response to competition.

Our failure to further refine our technology and develop and introduce improved photovoltaic products could render solar modules based on our technology uncompetitive or obsolete and reduce our net sales and market share.

We will need to invest significant financial resources in research and development to continue to improve our module conversion efficiency and to otherwise keep pace with technological advances in the solar energy industry. However, research and development activities are inherently uncertain and we could encounter practical difficulties in commercializing our research results. We seek to continuously improve our products and processes, and the resulting changes carry potential risks in the form of delays, additional costs or other unintended contingencies. In addition, our significant expenditures on research and development may not produce corresponding benefits. In addition, other companies could potentially develop a highly reliable renewable energy system that mitigates the intermittent power production drawback of many renewable energy systems, or offers other value-added improvements from the perspective of utilities and other system owners, in which case such companies could compete with us even if the levelized cost of electricity associated with such new system is higher than that of our systems. Our solar modules may be rendered obsolete by the technological advances of our competitors, which could reduce our net sales and market share.

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Our failure to protect our intellectual property rights may undermine our competitive position and litigation to protect our intellectual property rights or defend against third-party allegations of infringement may be costly.

Protection of our proprietary processes, methods and other technology is critical to our business. Failure to protect and monitor the use of our existing intellectual property rights could result in the loss of valuable technologies. We rely primarily on patents, trademarks, trade secrets, copyrights and contractual restrictions to protect our intellectual property. Our existing provisional patents and future patents could be challenged, invalidated, circumvented or rendered unenforceable. Our pending patent applications may not result in issued patents, or if patents are issued to us, such patents may not be sufficient to provide meaningful protection against competitors or against competitive technologies.

We also rely upon unpatented proprietary manufacturing expertise, continuing technological innovation and other trade secrets to develop and maintain our competitive position. While we generally enter into confidentiality agreements with our associates and third parties to protect our intellectual property, such confidentiality agreements are limited in duration and could be breached and may not provide meaningful protection for our trade secrets or proprietary manufacturing expertise. Adequate remedies may not be available in the event of unauthorized use or disclosure of our trade secrets and manufacturing expertise. In addition, others may obtain knowledge of our trade secrets through independent development or legal means. The failure of our patents or confidentiality agreements to protect our processes, equipment, technology, trade secrets and proprietary manufacturing expertise, methods and compounds could have a material adverse effect on our business. In addition, effective patent, trademark, copyright and trade secret protection may be unavailable or limited in some foreign countries, especially any developing countries into which we may expand our operations. In some countries we have not applied for patent, trademark or copyright protection.

Third parties may infringe or misappropriate our proprietary technologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and operating results. Policing unauthorized use of proprietary technology can be difficult and expensive. Also, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. We cannot assure you that the outcome of such potential litigation will be in our favor. Such litigation may be costly and may divert management attention and other resources away from our business. An adverse determination in any such litigation may impair our intellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and would have to bear all costs arising from such litigation to the extent we are unable to recover them from other parties.

We have yet to attain profitable operations and we will need additional financing to fund continued development of solar energy products.

We have incurred a net loss of $2,479,539 for the period from inception to September 30, 2010, and have earned no revenues to date. We expect to spend additional capital in order produce and market solar energy products which we are licensed to do, and establish our infrastructure and organization to support anticipated operations. We cannot be certain whether we will ever earn a significant amount of revenues or profit, or, if we do, that we will be able to continue earning such revenues or profit. Also, any economic weakness may limit our ability to continue development and ultimately market our products and services. Any of these factors could cause our stock price to decline and result in investors losing a portion or all of their investment. These factors raise substantial doubt that we will be able to continue as a going concern. We have cash in the amount of $501,192 as at September 30, 2010.

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We believe that we have obtained sufficient financing to fund our anticipated expenditures for the next twelve months. However, business activities beyond the next twelve months will require additional funding in the event that our cash on hand is insufficient for any additional work proposed. We currently do not have sufficient arrangements for future financing and we may not be able to obtain financing when required.

Our financial statements included with this Quarterly Report have been prepared assuming that we will continue as a going concern. If we are not able to earn revenues, then we may not be able to continue as a going concern and our financial condition and business prospects will be adversely affected. These factors raise substantial doubt that we will be able to continue as a going concern and adversely affect our ability to obtain additional financing.

Our short operating history makes our business difficult to evaluate, accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects.

Our business is in the early stage of development and we have not generated any revenues or profit to date. We commenced our operations in April, 2004. Because of our limited operating history, investors may not have adequate information on which they can base an evaluation of our business and prospects. To date, we have done the following:

In order to establish ourselves as a technology supplier, we are dependent upon continued funding and the successful development of the NGD™ Technology and products. Failure to obtain funding for continued development and marketing would result in us having difficulty establishing licensing agreements for our technology or achieving profitability. Investors should be aware of the increased risks, uncertainties, difficulties and expenses we face as a development stage company and our business may fail and investors may lose their entire investment.

We have a limited operating history upon which to base an evaluation of our business and prospects. Our business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets such as renewable energy. These risks include: the initial completion of a developed product, the demand for the company’s product, the company’s ability to adapt to rapid technological change, the level of product and price competition, the company’s success in setting up and expanding distribution channels and whether the company can develop and market new products and control costs.

To address these risks, we must successfully implement our business plan and marketing strategies. We may not successfully implement all or any of our business strategies or successfully address the risks and uncertainties that we encounter. We have no history of earning revenues and there is no assurance that we will be able to generate revenues from sales or that the revenues generated will exceed the operating costs of our business.

Operating results are difficult to predict, with the result that we may not achieve profitability and our business may fail.

Our future financial results are uncertain due to a number of factors, many of which are outside our control. These factors include:

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We believe that we can compete favorably on these factors. However, we will have no control over how successful our competitors are in addressing these factors. These factors could negatively impact on our financial results, with the result that we may not achieve profitability and our business may fail.

We will require additional financing and may not be able to continue operations if additional financing is not obtained.

As of September 30, 2010, we had cash in the amount of $501,192. Under the Foreign Private Placement we have obtained sufficient financing to fund our anticipated business activities over the next 12 months. Our total expenditures over the next twelve months are anticipated to be approximately $2,000,000, the majority of which is due to the development and marketing of our products and general, legal, accounting and administrative expenses associated with our reporting obligations under the Exchange Act. Depending on the success of our initial marketing efforts, we estimate that we will require further funding to implement an advertising campaign to establish and enhance awareness of our products.

The accompanying financial statements have been prepared assuming that we will continue as a going concern. As discussed in Note 1 of our June 30, 2010 year end audited financial statements, we are in the development stage of operations, have had losses from operations since inception, and have insufficient working capital available to meet ongoing financial obligations over the next fiscal year. After the fiscal year end, we will require additional financing for any operational expenses and to pursue our plan of operation. We will require additional capital and financing in order to continue otherwise our business will fail. We have no agreements for additional financing and there can be no assurance that additional funding will be available to us on acceptable terms in order to enable us to complete our plan of operation.

We will depend on recruiting and retaining qualified personnel and the inability to do so would seriously harm our business.

Our success is dependent in part on the services of certain key management personnel, including Daryl J. Ehrmantraut, our Chief Executive Officer and President, Graham R. Hughes, our Chief Financial Officer, Secretary and Treasurer, and Dr. Andras Pattantyus-Abraham, our Chief Technology Officer. We have an employment agreement with Mr. Ehrmantraut. We do not have employment agreements with Mr. Hughes or Dr. Pattantyus-Abraham. We do not have any employment agreements with any third parties providing services to us. The experience of these individuals is an important factor contributing to our success and growth and the loss of one or more of these individuals could have a material adverse effect on our company. Our future success also depends on our attracting, retaining and motivating highly skilled personnel and we may be unable to retain our key personnel or attract, assimilate or retain other highly qualified personnel in the future.

We may also experience difficulty in hiring and retaining highly skilled consultants with appropriate qualifications. We are materially dependent on our financial consultant. If we are unable to retain the services of this consultant, or if we are unable to attract a qualified employee or financial consultant, we may be unable to prepare financial statements, which could cause our business to fail. Even if we invest significant resources to recruit, train and retain qualified personnel, we may not be successful in our efforts.

We may become liable for defects or patent disputes that arise and this could negatively affect our business.

We may become liable for any defects that exist in the NGD™ Technology, or any patent disputes. If we are deemed to be liable for any defects or licensing issues, this will have a material adverse impact on our financial condition and results of operation.

Because we are significantly smaller and less established we may lack the financial resources necessary to compete effectively and sustain profitability.

Our future success depends on our ability to compete effectively with other distributors of other solar technology. Many of these competitors are more established, offer more products, services and features, have a greater number of clients, locations, and employees, and also have significantly greater financial, technical, marketing, public relations, name recognition, and other resources than we have. While our objective is to continue to develop our technology, if we do not compete effectively with current and future competitors, we may not generate enough revenue to be profitable. Any of these factors could cause our stock price to decline and result in investors losing a portion or all of their investment. Increased competition may result in increased operating costs and the inability to generate revenues, any one of which could materially adversely affect our business, results of operations and financial condition. Many of our current and potential competitors have significantly greater financial, marketing, customer support, technical and other resources than us. As a result, such competitors may be able to attract potential customers away from us, and they may be able to devote greater resources to the development and promotion of their products than we can.

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We do not intend to pay dividends in the near future.

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future. Our board of directors determines whether to pay dividends on our issued and outstanding shares. The declaration of dividends will depend upon our future earnings, our capital requirements, our financial condition and other relevant factors. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

Our board does not intend to declare any dividends on our shares for the foreseeable future.

Our business is exposed to foreign currency fluctuations causing negative changes in exchange rates to result in greater costs.

A portion of our expenses and capital spending will be transacted in Canadian dollars. We do not have a foreign currency hedging program in place. Due to the unpredictable behavior of foreign currency exchange rate fluctuations we cannot assure that this will not have a material adverse impact on our financial condition and results of operation.

There may be a greater risk of fraud on the NASD-OTC Bulletin Board.

OTC Bulletin Board securities are not regulated as closely as securities listed on exchanges. Dealers may dominate the market and set prices that are not based on competitive forces. Individuals or groups may create and control the sudden, sharp increase of price and trading volume and the equally sudden collapse of market prices. While there is regulation of the NASD-OTC Bulletin Board, it is not as comprehensive as the regulation of the listed exchange. If this should occur, the value of an investment in our common stock could decline significantly.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

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The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

ITEM 2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES.

None.

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ITEM 5.       OTHER INFORMATION.

None.

ITEM 6.       EXHIBITS.

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.