The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements included in our Form 10-K Annual Report for the year ended November 30, 2008, and notes thereto.

Overview

We are a medical research and development company that is specializing in pharmaceutical, bio-technical and medical gas generating systems. The primary gas our systems will generate is nitric oxide, along with other various combinations of beneficial medical gases suitable for the treatment of human diseases.

Nitric oxide gas is produced and sold commercially by major gas companies as a specialty gas mixture and calibration gas. Nitrogen dioxide is present in all nitric oxide gas currently produced; that limits the size of the dose

of nitric oxide gas that can be administered to humans and animals.

We have developed a proprietary compound formulation that will be utilized to produce nitric oxide gas in our desktop and portable generators. Management believes that with further formulation of our proprietary compound, we can make or filter nitric oxide gas with less toxic amounts of nitrogen dioxide, and that this process can produce nitric oxide gas in ample quantities for any current or prospective use, and at a substantially reduced price compared with all other currently available technologies.

Our current generator model is capable of delivering sufficient quantities of nitric oxide gas for individual laboratory desktop use. We will continue to further develop this and other generators and compound formulation for high production quantities and consistency. The product must have a known shelf life and be available in various configurations to produce known concentrations and known volumes of gas. Packaging is another developmental process that will need to be addressed. Management plans to rely on outside contractors to achieve these objectives.

We estimate that non-clinical laboratory sales could take place prior to the receipt of United States Food and Drug Administration ("FDA") approval.
Management anticipates that selling our generator into the market as laboratory equipment prior to receipt of final FDA approval will pave the way for sales of our medical generator and proprietary tablets, but expected financial contributions from non-medical generator and tablet sales will be too late to help offset the substantial costs of the FDA approval process for human medical uses. We expect that contributions will be able to support our manufacturing and set-up costs and contribute to the overall profitability of our Company in due time, but we believe that they will also require financing. We anticipate entering the non-clinical laboratory market in the next 18 months.

All human medical uses of nitric oxide gas require FDA approval, and the approval of similar international agencies. Approval can be a long and expensive process, with no assurance that any such approval will ever be granted. Management hopes to reduce time to regulatory approval by certain strategic approaches that are proprietary.

Our objectives are to establish GeNOsys (generated nitric oxide systems) as the premier nitric oxide generating pharmaceutical company, and to manufacture and sell medical grade nitric oxide generators and tablets for use in the relief of human diseases, offer value added services such as custom generators adapted for the treatment of various diseases, hire staff both currently identified and unidentified to implement our business model, and to gain FDA approval of our generating system.

Results of Operations

The following table presents our results of operations for the three months ended February 28, 2009, and February 29, 2008:

                                            For the Three Months
                                                    Ended
                                        Feb. 28, 2009   Feb. 29, 2008

Revenues                              $             - $             -

Cost of sales                                       -               -

Gross margin                                        -               -

Operating expenses:
  Research and development                     99,658         135,581
  General and administrative                  321,057         112,614
  Stock based compensation                     61,960          93,384

    Total operating expenses                  482,675         341,579

Net income (loss) from operations           (482,675)       (341,579)

Other income (expense):
  Interest income                                   -           1,956
  Interest expense                            (1,836)               -

    Total other income (expense), net         (1,836)           1,956

Net income (loss) before income taxes       (484,511)       (339,623)

Provision (benefit) for income tax                  -               -

Net income (loss)                     $     (484,511) $     (339,623)

During the three-month period ended February 28, 2009, we had a net loss of $484,511. This compares to a net loss of $339,623 for the comparable period ended February 29, 2008. Net loss per common share for these periods was $(.01) and $(.01), respectively.

Research and development ("R&D") expenses were $99,658 and $135,581, respectively, for the three-month periods ended February 28, 2009, and February 29, 2008. The decrease in research and development expenditures results from reductions in consulting fees and travel expenses. As the documentation preparation and regulatory work for FDA approval intensifies, R&D expenses are expected to grow.

General and administrative expenses were $321,057 and $112,614, respectively, for the three-month periods ended February 28, 2009, and February 29, 2008. Of the increase of $208,443, $200,000 results from the non-cash charge expensed for stock-based compensation for consulting. Excluding that charge, general and administrative expenses would have increased by $8,443 in 2009 as compared to 2008, which is the net of small changes in a number of expense categories. When reviewed net of the non-cash charge for consulting, general and administrative expenses are expected to increase in the remaining periods in this fiscal year as expenses are incurred to raise the additional capital needed to advance commercialization of our products.

Total other expense was $1,836 in the three month period ended February 28, 2009 compared to other income of $1,956 for the three-month periods ended February 29, 2008. The other expense in 2009 is interest expense related to interest accrued on notes payable. The other income in 2008 is interest income earned on funds on deposit in a savings account

Financial Position

We had $1,462 in cash and cash equivalents as of February 28, 2009, representing a decrease of $2,906 from November 30, 2008. Working capital as of February 28, 2009, was a deficit of $613,091 compared to a deficit of $394,885 as of November 30, 2008. This decrease in cash and working capital was primarily due to cash and cash equivalents used to fund our operating loss for the period, coupled with increases in accrued liabilities.

Liquidity and Capital Resources

To date, we have financed our operations principally through private placements of our equity securities. Net cash of $50,871 was used for operating activities during the three months ended February 28, 2009. This is a decrease of $101,378 as compared to the $152,249 used during the same period ended February 29, 2008.
Also, during the three months ended February 28, 2009, net cash of $8,485 was used for the purchase of intangible assets. This compares with $16,061 used for the purchase of intangible assets for the same period ended February 29, 2008.
As of February 28, 2009, our current liabilities totaled $696,160, and we had a working capital deficit of $613,091. As of February 28, 2009, we had no long-term debt obligations.

Our working capital requirements for the foreseeable future will vary based upon a number of factors, including the costs to complete development work, the cost of bringing our nitric oxide generator and nitric oxide tablets to commercial viability, the costs associated with obtaining FDA approval, the timing of the market launches of our products and the level of sales of those products when introduced into the market place. As of February 28, 2009, we had accounts payable and accrued liabilities totaling $696,160. At February 28, 2009, we had cash and cash equivalents of $1,462. We know that existing cash and cash equivalents will not be sufficient to execute our business plan, or to meet our cash requirements during the next 12 months, and we are currently actively working to raise additional funds. However, there can be no assurance that additional funding will be available on favorable terms, if at all. If we fail to obtain additional funding when needed, our business and financial condition may be adversely affected.

Critical Accounting Policies

Recent Accounting Pronouncements.

FAS 141(R) - In December 2007, the FASB issued FAS 141(R), "Business Combination" ["FAS 141(R)"], which replaces FAS No. 141. FAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquire and the goodwill acquired. FAS 141(R) also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. FAS 141(R) is effective for fiscal years beginning after December 15, 2008. The adoption of FAS 141(R) will have an impact on accounting for business combination once adopted, but the effect is dependent upon acquisitions at that time.

FAS 157 - In September 2006, the Financial Accounting Standards Board ("FASB") issued FAS No. 157, "Fair Value Measurements". FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.
This statement addresses how to calculate fair value measurements required or permitted under other accounting pronouncements. Accordingly, this statement does not require any new fair value measurements. However, for some entities, the application of the statement will change current practice. FAS 157 is effective December 1, 2008, except for nonfinancial assets and liabilities, which are effective December 1, 2009. We adopted SFAS 157 on December 1, 2007 for financial assets and liabilities carried at fair value on a recurring basis.
The adoption of FAS 157 had no material impact on our consolidated financial statements.

FAS 160 - In December 2007, the FASB issued FAS No. 160 "Non-controlling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51" ("FAS 160"), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent's ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosure that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. FAS 160 is effective for fiscal years beginning after December 15, 2008. The adoption of FAS 160 will have an impact on business combination once adopted, but the effect is dependent upon acquisitions at that time.

FAS 161 - In March 2008 the Financial Accounting Standard Board ("FASB") released Statement of Financial Accounting Standards No 161, Disclosures about Derivative Instruments and Hedging Activities ("FAS 161"). FAS 161requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-

FASB 162 - In May 2008 the Financial Accounting Standard Board ("FASB") released Statement of Financial Accounting Standards No 162, The Hierarchy of Generally Accepted Accounting Principles ("FASB 162"). FASB 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles ("GAAP") in the United States (the "GAAP hierarchy"). FASB believes that the GAAP hierarchy should be directed to entities because it is the entity, not its auditor, who is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. Accordingly, FASB concluded that the GAAP hierarchy should reside in the accounting literature established by the FASB and issued this Statement to achieve that result. FASB 162 becomes effective 60 days following the SEC's approval of the Public Accounting Oversight Board amendment to AU Section 411.

SFAS 163 - In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60 ("SFAS 163"). SFAS 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claim liabilities. The Statement also required expanded disclosures about financial guarantee insurance contracts. SFAS 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. We do not expect that the adoption of SFAS 163 will have a material impact on our financial statements.

We have reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our consolidated results of operation, financial position or cash flows. Based on that review, we believe that none of these pronouncements will have a significant effect on our current or future earnings or operations.

Inflation

We do not expect the impact of inflation on our operations to be significant for the next twelve months.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to our goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, and regulatory and technical factors affecting our operations, products, services and prices.

Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.