Item 2 - Management's Discussion and Analysis or Plan of Operation

Overview

We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the following:

RESULTS OF OPERATIONS

Three months ended May 31, 2011 v. Three months ended May 31, 2012.

Our primary expenses in our development stage during the three month period were research and development, ($24,572 for the three months ended May 31, 2011 and $176,693 for the three months ended May 31, 2012); consulting , ($84,172 for the three months ended May 31, 2011 and $16,028 for the three months ended May 31, 2012); professional fees, ($56,031 for the three months ended May 31, 2011 and $99,590 for the three months ended May 31, 2012); and other general and administrative expenses, ($67,043 for the three months ended May 31, 2011 and $56,206 for the three months ended May 29, 2012). We had a net loss of $(231,818) or $(0.00) per share for the quarter ended May 31, 2011 which increased to $(348,517) or $(0.00) per share for the quarter ended May 31, 2012.
As we transition from research and development to early stage manufacturing during calendar 2012 we anticipate that our expenses by category will continue to fluctuate and as we will begin to recognize revenue from sales and material and manufacturing costs will be incurred.

Nine months ended May 31, 2011 v. Nine months ended May 31, 2012.

Our primary expenses in our development stage during the nine month period were research and development, ($131,302 for the nine months ended May 31, 2011 and $391,072 for the nine months ended May 31, 2012); consulting , ($541,930 for the nine months ended May 31, 2011 and $100,824 for the nine months ended May 31, 2012); professional fees, ($48,313 for the nine months ended May 31, 2011 and $162,467 for the nine months ended May 31, 2012); and other general and administrative expenses, ($397,354 for the nine months ended May 31, 2011 and $200,426 for the nine months ended May 31, 2012). We had a net loss of $(1,118,899) or ($0.02) per share for the nine months ended May 31, 2011 which was reduced to $(854,789) or $(0.01) per share for the nine months ended May 31, 2012. As we transition from research and development to early stage manufacturing during calendar 2012 we anticipate that our expenses will continue to fluctuate and as we will begin to recognize revenue from sales and material and manufacturing costs be incurred. Research and development expense will vary depending on whether we are developing new products.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows used in operating activities for the nine months ended May 31, 2012 was $885,094 which was offset by net proceeds of $766,189 provided from financing activities, principally the sale of stock and warrants. We had cash resources of $189,207 at May 31, 2012 and intend to rely on the sale of stock and warrants in private placements to increase liquidity to enable us to execute on our plan to manufacture and market vertical axis wind turbines. If we are unable to raise cash through the sale of our stock, we may be required to severely restrict our operations.

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. There are no

current revenue generating activities that give rise to significant assumptions or estimates. Our financial statements filed as part of our May 31, 2012 Quarterly Report on Form 10-Q include a summary of the significant accounting policies and methods used in the preparation of our financial statements.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.