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

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the fiscal year ended June 30, 2011~~

~~[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~ For the ~~transition~~fiscal ~~period~~year ~~from~~ended ~~_____~~June to30, ~~_____~~2012

~~Commission~~[ ] ~~File~~TRANSITION ~~Number:~~REPORT ~~000-52686~~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)

NEVADA	27-1616811
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Suite 300-1055 W. Hastings Street
Vancouver, British Columbia, CANADA.	V6E 2E9
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code	(604) 681-7311

Securities registered under Section 12(b) of the Exchange Act:	NONE.
Securities registered under Section 12(g) of the Exchange Act:	Common Stock, $0.001 Par Value per Share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]

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.
Yes [X] 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 (s. 229.405 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 [ X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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.

Large accelerated filer [ ] Accelerated filer [X ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [ X]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $~~168~~29,~~921~~372,~~432~~923 on the basis of the ~~average of the~~ price at which the common equity was sold stock on December 3130, ~~2010~~2011.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:~~146~~154,~~987~~429,~~692~~742 as at ~~August~~September 2318, ~~2011~~2012.

QUANTUM SOLAR POWER CORP. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 2012

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 2011

TABLE OF CONTENTS

		PAGE
PART I		3
ITEM 1.	BUSINESS.	3
ITEM 1A.	RISK FACTORS	98
ITEM 2.	PROPERTIES.	1514
ITEM 3.	LEGAL PROCEEDINGS	1514
ITEM 4.	~~SUBMISSION~~MINE OFSAFETY ~~MATTERS TO A VOTE OF SECURITY HOLDERS~~DISCLOSURES	1514
PART II		1615
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	1615
ITEM 6.	SELECTED FINANCIAL DATA	1716
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	1816
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2118
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.	2319
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	2420
ITEM 9A.	CONTROLS AND PROCEDURES.	2420
ITEM 9B.	OTHER INFORMATION.	2621
PART III		2722
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	2722
ITEM 11.	EXECUTIVE COMPENSATION.	2924
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	3126
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	3428
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES.	3429
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES.	3530
SIGNATURES		3732

PART I

The information in this discussion contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate,” "predict," "potential" or "continue," the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks described below, and, from time to time, in other reports the Company files with the United States Securities and Exchange Commission (the “SEC”). These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements.

As used in this Annual Report, the terms “we,” “us,” “our,” “Quantum,” and the “Company” refer to Quantum Solar Power Corp., unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.

ITEM 1. BUSINESS.

OVERVIEW

The following discussion and analysis summarizes our plan of operation for the next twelve months and our results of operations for the year ended June 30, 2011. This discussion should be read in conjunction with the Management’s Discussion and Analysis or Plan of Operation.

Quantum Solar Power Corp. formerly QV, Quantum Ventures, Inc. was incorporated under the laws of the State of Nevada on April 14, 2004. From 2004 to 2009 we had been 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.

Our principal executive office is located in Vancouver, British Columbia, Canada. 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 earth elements. Once we have completed development, we expect to derive substantially all revenues from royalty based licensing arrangements.

~~We are currently in the business of developing and marketing our NGD™ Technology for the production of solar energy utilizing our NGD™ Technology.~~ The NGD™ Technology, which is covered by two provisional U.S. patents and one Patent Cooperation Treaty Application, differs from conventional solar technology as it does not require expensive silicon based absorber components or rare earth elements. ~~Our researchers~~We ~~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 (see “Technology Acquisition” and “NGDTM Technology” below).

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. WeOur ~~conduct all of our~~ research ~~and~~activities ~~development~~are oncurrently asuspended until ~~contractual~~we ~~basis~~can ~~with~~pay ~~Simon~~outstanding ~~Fraser~~creditors ~~University.~~and Wefund ~~have~~continued ~~relied~~research onactivities ~~the sale~~ of ~~our~~ ~~securities and loans or capital infusions from our officers and directors to~~which ~~fund~~there ~~our~~is ~~operations~~no ~~to date~~assurance.

RECENT CORPORATE DEVELOPMENTS

Since the filing of our Quarterly Report for the fiscal quarter ended March 31, ~~2011~~2012 with the SEC, we experienced the following significant corporate developments:

~~Public~~Loan ~~Relations~~ Agreement

On ~~June~~April 2123, ~~2011~~2012, we ~~entered~~secured ~~into~~an aaggregate ~~public~~of ~~relations~~$475,000 ~~agreement~~CDN in debt financing (the “~~Vorticom Agreement~~Loan”), ~~with~~from ~~Vorticom~~Foundation ~~Inc~~Freehold Ltd. (“~~Vorticom~~Foundation”). ~~Under the terms of~~ ~~the~~$343,000 ~~Vorticom~~CDN ~~Agreement,~~was ~~Vorticom~~advanced ~~has~~before ~~agreed~~our tofiscal ~~provide~~year usended ~~with~~June ~~public~~31, ~~relations services~~2012 inand the ~~media~~remaining ~~and~~$132,000 ~~with~~CDN ~~other~~was ~~marking~~advanced ~~communication~~subsequent ~~activities.~~to ~~The~~our ~~Vorticom~~fiscal ~~Agreement~~year isend. ~~effective~~At ~~July~~any 5time, ~~2011~~Foundation ~~and~~may iselect ~~for~~to areceive ~~term~~shares of ~~12 months. In~~our ~~consideration~~common ofstock ~~Vorticom’s~~in ~~business~~exchange ~~advisory~~for ~~services,~~any weportion ~~will~~of ~~pay~~the ~~$5,625~~principal ~~USD~~or interest ~~per~~outstanding ~~month~~on ~~and~~the ~~grant~~Loan ~~1,875~~on ~~warrants (~~the ~~“Warrants”)~~basis of one share for each ~~month,~~CDN to$0.02 ~~purchase~~of ~~shares~~indebtedness ofconverted. ~~our~~In ~~common~~the ~~stock~~event atof ana ~~exercise~~default, ~~price~~Foundation ofmay ~~$1.00~~elect ~~until~~to receive shares on the ~~earlier~~basis of ~~July~~ 5,one ~~2012~~share orfor ~~the~~each ~~termination~~CDN $0.01 of indebtedness converted (the ~~Agreement.~~“Reduced ~~The~~Conversion ~~Warrants~~Rate”). ~~are~~Foundation torepresented bethat ~~issued~~it was ~~quarterly.~~not Wea ~~have~~“US ~~agreed~~Person” toas ~~reimburse~~that ~~Vorticom~~term ~~for~~is ~~applicable~~defined ~~out-of-pocket expenses.~~by WeRegulation ~~may~~S ~~cancel~~of the ~~Agreement~~Securities atAct of ~~any~~1933, ~~time~~as byamended ~~providing~~(the 30“Securities ~~days notice~~Act”).

~~Advantag Agreement~~3

OnThe ~~July~~Loan ~~18,~~is ~~2011,~~evidenced weby ~~entered~~promissory ~~into~~notes awe ~~consulting~~executed ~~agreement~~in ~~(the~~favor of ~~“Advantag~~Foundation. ~~Agreement”),~~We ~~with~~are ~~Advantag~~required ~~Aktiengesellschaft~~to ~~(“Advantag”),~~pay ~~whereby~~9% ~~Advantag~~annual ~~has~~interest ~~agreed~~on tothe ~~assist~~Loan usfrom ~~with~~April 25, ~~listing~~2012, on the ~~Frankfurt~~day ~~Stock~~of ~~Exchange~~the first advance. The ~~Advantag~~Loan ~~Agreement~~is ~~will~~payable beon inApril ~~effect~~23, ~~for~~2015 and ~~the~~secured ~~duration~~by a guarantee of ~~the~~our ~~listing~~wholly ~~process~~owned subsidiary, 0935493 B.C. InLtd (“SubCo”) ~~consideration~~charging, in favor of ~~Advantag’s~~Foundation, ~~services~~one weof ~~will~~our ~~pay~~PVD a75 ~~total~~Deposition oftools and ~~18,000~~our ~~EUR~~Nova toNanoSEM ~~Advantag~~430 asUltra-high ~~follows:~~resolution FESEM microscope to the indebtedness.

~~(i)~~The ~~6,000~~Loan ~~EUR~~is atcurrently ~~the~~in ~~time~~default because of ~~execution;~~our ~~(ii)~~failure ~~6,000~~to ~~EUR~~pay interest atthat ~~the~~was ~~time~~due ~~the~~on ~~prospectus~~September ~~is drafted~~30, ~~prior~~2012. toWe ~~its~~are ~~filing;~~in ~~and~~discussions ~~(iii)~~with Foundation ~~6,000~~to ~~EUR~~settle ~~following~~the ~~successful~~indebtedness ~~approval~~of bywhich ~~the~~there ~~Federal~~is ~~Financial~~no ~~Supervisory Authority~~assurance.

WeOn ~~will~~October ~~also~~12, ~~pay~~2012, ~~hourly~~we ~~rates~~entered ~~for~~into ~~any~~an ~~consulting~~amendment ~~services~~agreement (the ~~not~~“Amended Loan Agreement”) with Foundation. Under the terms of the Amended ~~directly~~Loan ~~related~~Agreement, toFoundation advanced us an additional $25,000 CDN and we reduced the ~~prospectus~~Reduced Conversion Rate by 20% from $0.01 CDN to $0.008 CDN.

~~Appointment~~Amendment ofto ~~Directors~~CIO-BC ~~and~~Research ~~Chairman~~Agreement

On ~~July~~May 2223, ~~2011~~2012, weCanadian ~~appointed~~Integrated ~~Steven~~Optics ~~Pleging~~(BC) asLtd. (“CIO-BC”), a ~~Director~~company that conducts research and development activities on the ~~Chairman~~NGDTM ofTechnology on our behalf, entered into its sixth amendment agreement (the ~~Board~~“Amended ofResearch ~~Directors~~Agreement”) ofto the ~~Company~~research agreement (the “CIO-BC Research Agreement”) with Simon Fraser University (“SFU”). ~~Also~~The onAmended Research ~~July~~Agreement 22was dated effective April 15, ~~2011~~2012. Under the terms of the Agreement, weCIO-BC issued SFU a promissory note (the “Promissory Note”) in the ~~appointed~~amount ~~Andras~~of ~~Pattantyus-Abraham~~CDN $452,749 in respect of previous research activities conducted on our ~~Chief~~behalf. ~~Technology~~The ~~Officer~~Promissory asNote bears interest at a ~~Director~~rate of 9% per annum. To secure payment under the Amended Research Agreement, We, along with SubCo, have agreed to provide a secured guarantee to SFU of the ~~Company.~~Promissory Note, charging, in favor of SFU, three of our PVD 75 Deposition tools.

~~Quorum~~We ~~Agreement~~are currently in default of our obligation to pay the indebtedness under the Promissory Note and have proposed that SFU take the three PVD 75 Deposition tools in settlement of the indebtedness.

OnConsulting ~~August 5, 2011, we entered into a consulting agreement (the “Quorum~~ Agreement~~”),~~ with Quorum Capital Corporation (“QCC”). Under the terms of the Quorum Agreement, QCC has agreed to provide consulting services to assist us in our activities in Germany. The Quorum Agreement is effective July 8, 2011 and is for a term of 6 months renewing for an additional 6 months automatically at the end of each term. In consideration of QCC consulting services, we will pay $5,000 CDN on exercise of the agreement and $2,000 CDN per month commencing September 8, 2011. We will also grant 2,000,000 options (the “Options”) to QCC, to purchase shares of our common stock at an exercise price of $1.00 USD until July 7, 2014. 333,335 of the Options are to be issued on execution and the remainder of the Options will be issued in monthly increments of 333,333 commencing August 8, 2011. We have agreed to pay a rate of $125 CDN per hour for any additional hours of work performed and to reimburse QCC for approved expenses. We may cancel the Agreement at any time by providing 30 days notice.

On ~~August~~May 823, ~~2011~~2012, ~~the~~our ~~Company~~Board ~~issued~~of ~~666~~Directors ratified,~~668~~ ofconfirmed and approved the ~~Options~~entry ~~to QCC~~into ina ~~accordance~~consulting ~~with~~agreement (the ~~terms~~“Consulting ofAgreement”) ~~the~~with Dr. ~~Agreement~~Edward ~~pursuant~~Sargent todated ~~the~~effective ~~provisions~~March ~~of Regulation~~9, S2012. The term of the ~~Securities~~Consulting Agreement ~~Act~~is ofone ~~1933~~year (from the ~~“Act”)~~effective date. ~~QCC~~The ~~represented~~Consulting ~~that~~Agreement itmay be ~~was~~terminated, ~~not~~without acause, "Uon 30 days notice.S Under the terms of the Consulting Agreement, Dr. ~~Person"~~Sargent ashas ~~defined~~agreed ~~under~~to ~~Regulation~~act Sas ~~and~~Chairman isof ~~not~~our ~~acquiring~~newly ~~the~~formed science ~~shares~~advisory ~~for~~board (the ~~account~~“Science orAdvisory ~~benefit~~Board”) ofand awill ~~U.S.~~be ~~Person.~~required to perform the following services (the “Services”):

	(1)	Recruit new Science Advisory Board members;

	(2)	Participate in monthly advisory calls;

	(3)	Chair quarterly Science Advisory Board meetings; and

	(4)	Be accessible to the Corporation to provide guidance on business and technology strategy issues.

In consideration of the Services, we granted 250,000 non-qualified options (the “Options”) to Dr. Sargent, entitling him to purchase shares of our common stock at a price of $0.165 per share, exercisable until March 1, 2014. As at September 18, 2012, 125,002 of the Options are fully vested and 124,998 Options will vest in increments of 20,833 Options per month during the six-month period ended February 28, 2013. The Options were granted under our 2011 Stock Incentive Plan.

~~Foreign~~Science ~~Private~~Advisory ~~Placement~~Board ~~Offering~~

On ~~August~~May 923, ~~2011~~2012, our Board of Directors approved athe ~~private~~formation ~~placement offering~~ of upthe toScience ~~3,000,000~~Advisory ~~shares~~Board ofand ~~our~~appointed ~~common~~Dr. ~~stock~~Sargent atas aour ~~price~~first ofmember and $1Chairman.00 ~~per share (the “Foreign Private Placement”)~~Dr. ~~This~~Sargent, ~~offering~~ will be ~~made~~responsible ~~to persons~~for ~~who~~recruiting ~~are~~and ~~not~~appointing additional ~~“U.S.~~Science ~~Persons”~~Advisory asBoard ~~defined under Regulation S of the Act~~members.

WeThe ~~intend~~Science ~~use~~Advisory ~~the~~Board’s ~~net~~duties ~~proceeds~~include ~~from these financings to further develop its NGDTM Technology and for working capital purposes. There is no assurance that~~ the ~~Foreign~~following: ~~Private Placement will be completed on the above terms or at all.~~

Appointment of Director and Vice President of Corporate Development

	(1)	Preparing objective evaluations of our progress in science and technology;

	(2)	Acting as ambassadors for us and our technology; and

	(3)	Evaluating new technologies and intellectual property.

OnIssuance ~~August 23, 2011, our Board~~ of ~~Directors~~Securities ~~appointed Stella Guo as our Vice President of Corporate Development and as a Director effective September 1, 2011.~~

WeOn ~~entered~~August ~~into~~3, an2012, ~~employment~~we ~~agreement~~issued 3,900,000 units (~~the~~each a “~~Employment Agreement~~Unit”) ~~with~~at an ~~Ms.~~effective ~~Guo,~~price ~~dated~~of ~~August~~$0.05 ~~23,~~per ~~2011,~~Unit ~~whereby~~for ~~Ms.~~total ~~Guo~~proceeds ~~will~~of ~~act~~$195,000 asin ~~Vice~~satisfaction ~~President~~ of ~~Corporate~~subscriptions ~~Development~~received ofduring ~~the~~our ~~Corporation~~fiscal ~~effective~~quarter ~~September 1,~~ended ~~2011~~March 30, 2012. ~~Under~~The ~~the~~issuance ~~terms~~was ofcompleted ~~the~~pursuant ~~Agreement,~~to ~~Ms.~~the ~~Guo~~provisions ~~will~~of ~~receive~~Regulation aS ~~salary~~ of ~~$100,000~~the USAct. ~~per~~Each ~~year~~Unit ~~and~~consisted ~~options~~of toone ~~purchase~~share ~~1,000,000 shares~~ of ~~the Corporation’s~~our common stock and one share purchase warrant exercisable at a price of $10.0025 per share until ~~August~~November 313, ~~2014,~~ in2012. ~~accordance~~We ~~with~~issued ~~the~~an ~~Corporation’s~~additional ~~2011~~290,000 ~~Stock~~shares ~~Incentive~~to ~~Plan~~two ~~(the~~fundraisers ~~"2011~~as ~~Stock~~payment of ~~Incentive~~finder’s ~~Plan")~~fees related to the offering. ~~The~~Each ~~Employment~~subscriber ~~Agreement~~and isfundraiser represented ~~for~~that athey ~~term~~were ofnot ~~one~~a ~~year,~~“U.S. ~~renewable automatically~~Person” ~~for~~as anthat ~~additional~~term ~~year~~is atdefined ~~the~~under Regulation ~~end~~S of the ~~first~~Securities Act and, ifwas ~~renewed,~~not ~~a second~~acquiring ~~year~~the ifshares nofor ~~notice~~the account ofor ~~termination~~benefit ~~has~~of ~~been~~any ~~provided~~U.S. Person.

~~Executive~~Also ~~Services~~on ~~Agreement~~August 3, 2012, we issued 60,000 shares to a consultant. The shares were issued as compensation under the terms of a consulting agreement. The issuance was completed pursuant to the provisions of Regulation S of the Act. The consultant represented that he was not a “U.S. Person” as that term is defined in Regulation S of the Act and was not acquiring the shares for the account or benefit of any U.S. Person.

On August 31, 2011, we entered into an executive services agreement (the “Executive Services Agreement”) dated for reference August 8, 2011, among Team Solar BV (“TSBV”), Steven Pleging and the Company. Under the Executive Services Agreement, TSBV will provide the services of Mr. Pleging who will act as our Chairman and TSBV will receive 12,000 EUR each month, during the first three months and 15,000 EUR each month for each subsequent month the Executive Services Agreement is in effect.

Mr. Pleging is required to achieve the following targets under the Agreement:

	(a)	obtain cash flow to us of EUR 3,000,000 either through equity, industry partnering or licensing by January 8, 2012 (the “First Target”); and
	(b)	generate additional cash flow to us of EUR 5,000,000 by April 8, 2013 (the “Second Target”).

TSBV or at its option Mr. Pleging, shall receive a bonus of 250,000 shares of the our common stock if Mr. Pleging achieves the First Target and the Executive Services Agreement has not been otherwise terminated. In the event Mr. Pleging fails to meet the First Target but raises at least EUR 1,000,000 TSBV or at it option Mr. Pleging, will be entitled to receive a proportional amount of the 250,000 shares.

The term is for a period of one year, renewing automatically if notice of termination has not been provided by August 7, 2012. We may terminate the Executive Services Agreement if Mr. Pleging fails to achieve the First Target or the Second Target.

If the Executive Services Agreement is extended at the end of the Term, TSBV or at its option Mr. Pleging, shall receive an additional 250,000 shares of our common stock and Mr. Pleging shall receive options to purchase 1,500,000 shares of our common stock at a price determined by our Board of Directors in accordance with our 2011 Stock Option Plan (the “Options”).

TECHNOLOGY ACQUISITION

We acquired the NGDTM Technology on December 16, 2009 by an 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 (of which CIO transferred over 99% pursuant to the terms of a takeover bid, under Canadian Securities Laws) and Desmond Ross, our former director and executive officer, returned 47,000,000 shares to the treasury. Under the Technology Acquisition Agreement, we also agreed to pay CIO, or such other parties designated by CIO, including Canadian Integrated Optics (BC) Ltd. (“CIO-BC”), for ongoing development and research costs under CIO-BC’s existing research agreement (the “CIO-BC Research Agreement) with Simon Fraser University (“SFU”). The initial term of the CIO-BC Research Agreement was until July 30, 2010.

Subsequent to entering into the Technology Acquisition Agreement, CIO-BC entered into an amendment agreement to the CIO-BC Research Agreement, whereby SFU agreed to extend the term until December 31, 2010. On December 23, 2010, CIO-BC entered into another amendment agreement dated January 1, 2011, whereby SFU agreed to further extend the term until July 31, 2011. On July 28, 2011, CIO-BC entered into another amendment agreement dated July 2, 2011, whereby SFU agreed to further extend the term until December 31, 2011. CIO-BC entered into another amendment agreement dated January 2, 2012, whereby SFU agreed to further extend the term until June 29, 2012 and in consideration of which we will pay $594,401 CDN plus expenses, during the term. During our fiscal year ended June 30, 2012, we entered into another amendment to the research agreement (the “Amended Research Agreement”) dated effective April 15, 2012. Under the terms of the Agreement, CIO-BC issued SFU a promissory note (the “Promissory Note”) in the amount of CDN $452,749 in respect of previous research activities conducted on our behalf. The Promissory Note bears interest at a rate of 9% per annum. We, along with our wholly owned subsidiary 0935493 B.C. Ltd, guaranteed the Promissory Note with three of our PVD 75 Deposition Tools.

We have had insufficient funds to make our payments to CIO-BC for ongoing research and development activities conducted at SFU. As a result, CIO-BC has fallen behind with its payments under the Amended Research Agreement and the Amended Research Agreement has been suspended by SFU. We are currently evaluating our research options going forward. We have focused our activities on arranging financing to pay outstanding liabilities and fund continued research and development activities. There is no assurance that we will be able to secure sufficient financing on acceptable terms or at all.

pursuant to the terms of a takeover bid, under Canadian Securities Laws) and Desmond Ross, our former director and executive officer, returned 47,000,000 shares to the treasury. Under the Technology Acquisition Agreement, we also agreed to pay CIO, or such other parties designated by CIO, for ongoing development and research costs under CIO’s existing research agreement (the “CIO Research Agreement) with Simon Fraser University (“SFU”). The initial term of the CIO Research Agreement was until July 30, 2010.

Subsequent to entering into the Technology Acquisition Agreement, CIO entered into an amendment agreement to the CIO Research Agreement, whereby SFU agreed to extend the term until December 31, 2010 and in consideration of which we paid $310,076 CDN. On December 23, 2010, CIO entered into another amendment agreement dated January 1, 2011, whereby SFU agreed to further extend the term until July 31, 2011 and in consideration of which we will pay $476,482 CDN plus expenses, during the term. On July 28, 2011, CIO entered into another amendment agreement dated July 2, 2011, whereby SFU agreed to further extend the term until December 31, 2011 and in consideration of which we will pay $599,593 CDN plus expenses, during the term.

During the fiscal year ended June 30, 2011 we paid $2,312,977 USD under the CIO Research Agreement.

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.

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.

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.

THE INDUSTRY

Energy is the most critical issue of the new century. Energy is a necessary part of the solution to all of the other great problems of our age which include access to clean water, wholesome food, a sustainable environment, an end to poverty, widely available education, democracy and a stable population. The provision of electrical energy was a $1 trillion per year in 2007 and expected to grow to $2 trillion by 2025. There are a variety of ways in which electrical energy can be generated; many involve burning fossil fuels (coal, oil, natural gas, etc.) with the concerns regarding CO2 related climate change this is becoming a less acceptable solution.

Renewable energy is the fastest growth segment of ~~the~~ the electrical generation market. Solar power may ultimately be the answer to the energy needs of the world. In ~~2011~~2012, however, solar power remains ill-equipped for prime time deployment. This is due to the costs of installing such systems and therefore of the cost of the electrical energy they generate being much higher than the alternatives. There are at least two easily addressed causes for the high cost of solar, one is the costs of the panels themselves and the other is their energy conversion efficiency.

We have developed a revolutionary and disruptive new product solution for the conversion of solar energy to electricity.

CUSTOMERS

We will not have direct interaction with end users customers. We plan to license the NGD™ Technology to original equipment manufacturers (“OEM’s) and derive our revenue from licensee fees and royalties from sales by OEM’s. There is no assurance that we will be able to license the technology to OEM’s or if we are able to license the technology, that OEM’s will be able to derive any revenues from which we would receive royalties.

COMPETITION

The renewable energy, solar energy and solar module sectors are highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete within the larger electric power industry. In addition, we expect to compete with future ~~entrants~~ entrants to the photovoltaic industry that offer new technological solutions. We may also face competition from semiconductor manufacturers and semiconductor equipment manufacturers or their customers, several of which have already announced their intention to start production of photovoltaic cells, solar modules or turnkey production lines. Some of these competitors may be part of larger corporations and have greater financial resources and greater brand name recognition than we do and may, as a result, be better positioned to adapt to changes in the industry or the economy as a whole.

new technological solutions. We may also face competition from semiconductor manufacturers and semiconductor equipment manufacturers or their customers, several of which have already announced their intention to start production of photovoltaic cells, solar modules or turnkey production lines. Some of these competitors may be part of larger corporations and have greater financial resources and greater brand name recognition than we do and may, as a result, be better positioned to adapt to changes in the industry or the economy as a whole.

We also face competition from companies that currently offer or are developing other renewable energy technologies (including wind, hydropower, geothermal, biomass and tidal technologies) and other power generation sources that burn conventional fossil fuels.

RESEARCH AND DEVELOPMENT ACTIVITIES

WeOur ~~are~~research and development activities are currently ~~conducting~~suspended ~~research~~as ~~and~~a ~~development~~result onof ~~the~~outstanding ~~NGD™~~indebtedness ~~Technology~~to SFU. We expended $2,~~322~~710,~~046~~407 on research and development during the fiscal year ended June 30, ~~2011~~2012.

PATENTS AND TRADEMARKS

We ~~own~~have ~~two~~made USone international patent cooperation treaty (PCT) application, PCT/CA2011/050471, filed on July 29, 2011, and published on March 2, 2012. The priority date is July 30, 2010. This PCT application pertains to our intellectual property from our previous provisional patent applications ~~listed~~(US 61/424,252 ~~below:~~and 61/434,727).

Patent:			Filing Date	Present Status
Phase I	2393- 104PRA	United States Provisional Patent Application No. 61/424,252	December 17, 2010	Pending
Phase II	2393- 105PRA	United States Provisional Patent Application No. 61/434,727	January 20, 2011	Pending

The PCT application provides us a 30-month window from the priority date to determine which applicable countries we will be pursuing patent protection.

We also intend to file for patents in others countries under the Patent Cooperation Treaty.

EMPLOYEES

We have ~~six~~no ~~full time~~ employees, ~~four~~other ofthan our executive officers, Mr. Ehrmantraut, ~~Mr. Pleging, Ms. Guo~~ and Dr. Pattantyus-Abraham ~~and two other full-time employees~~.

AVAILABLE INFORMATION

We are a reporting issuer and we file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC.

The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. State that the public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and state the address of that site (http://www.sec.gov).

Our internet address is http://www.quantumsp.com. We have made available, free of charge, through our Internet website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

ITEM 1A. RISK FACTORS.

Amended Research Agreement is currently suspended we are not be able to continue our research and development activities on our NGD^TM Technology at SFU.

We have not had enough cash to make our payments to CIO-BC for ongoing research and development costs. As a result, CIO-BC has fallen behind with its payments under the Amended Research Agreement and the CIO-BC Research Agreement has been suspended by SFU. There are no assurances that a new agreement with SFU will be reached, that SFU will allow us to continue to use their facilities to conduct our research and development activities. We will require financing to repay the debt owed on the Promissory Note and conduct further research and development activities. There is no assurance that we will be able to secure financing on acceptable terms or at all.

CIO-BC has defaulted on the Promissory Note that we have guaranteed and we have defaulted on the interest payments on the Loan from Foundation. As a result, we may lose all four of our PVD 75 Deposition tools and our Nova NanoSEM 430 Ultra-high resolution FESEM microscope.

SFU has made a demand on the outstanding balance of the Promissory Note and Foundation has made a demand on the interest payable on the Loan. The Loan is currently in default because of our failure to pay interest that was due on September 30, 2012. We do not have sufficient finances to pay the outstanding interest on the Loan and the outstanding balance due on the Promissory Note. As a result, we may lose all four of our PVD 75 Deposition tools and our Nova NanoSEM 430 Ultra-high resolution FESEM microscope. If we lose all of our equipment, our business may fail. There is no assurance that we will be able to negotiate an alternative arrangement with Foundation or SFU or that we will obtain sufficient financing to settle our outstanding debts.

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:

1. cost-effectiveness of the electricity generated by photovoltaic power systems compared to conventional energy sources and products, including conventional energy sources, such as natural gas, and other non-solar renewable energy sources, such as wind; 2. availability and substance of government subsidies, incentives and renewable portfolio standards to support the development of the solar energy industry; 3. performance and reliability of photovoltaic systems compared to conventional and other non-solar renewable energy sources and products; 4. success of other renewable energy generation technologies, such as hydroelectric, tidal, wind, geothermal, solar thermal, concentrated photovoltaic, and biomass; 5. fluctuations in economic and market conditions that affect the price of, and demand for, conventional and non-solar renewable energy sources, such as increases or decreases in the price of oil, natural gas and other fossil fuels; and 6. fluctuations in capital expenditures by end-users of solar modules, which tend to decrease when the economy slows and interest rates increase.

1.	cost-effectiveness of the electricity generated by photovoltaic power systems compared to conventional energy sources and products, including conventional energy sources, such as natural gas, and other non-solar renewable energy sources, such as wind;
2.	availability and substance of government subsidies, incentives and renewable portfolio standards to support the development of the solar energy industry;

3.	performance and reliability of photovoltaic systems compared to conventional and other non-solar renewable energy sources and products;
4.	success of other renewable energy generation technologies, such as hydroelectric, tidal, wind, geothermal, solar thermal, concentrated photovoltaic, and biomass;
5.	fluctuations in economic and market conditions that affect the price of, and demand for, conventional and non-solar renewable energy sources, such as increases or decreases in the price of oil, natural gas and other fossil fuels; and
6.	fluctuations in capital expenditures by end-users of solar modules, which tend to decrease when the economy slows and interest rates increase.

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.

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.

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.

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 $613,~~376~~755,~~254~~070 for the period from inception to June 30, ~~2011~~2012, 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 $~~343~~29,~~289~~432 as at June 30, ~~2011~~2012.

~~Subsequent~~We todo ~~our~~have ~~year~~sufficient ~~end~~financing weto ~~received~~fund ~~subscriptions~~our ~~for~~anticipated ~~530,000~~expenditures ~~shares~~for ofthe ~~our~~next ~~common~~twelve ~~stock~~months. ~~under~~We ~~our~~currently ~~Foreign~~do ~~Private~~not ~~Placement~~have ~~offering~~sufficient atarrangements afor ~~price~~future offinancing ~~$1.00~~and ~~per~~we ~~share~~may not be able to obtain financing when required.

WeOur ~~believe~~financial statements included with this Quarterly Report have been prepared assuming that we ~~have~~will ~~obtained~~continue ~~sufficient~~as ~~financing~~a togoing ~~fund~~concern. If we are ~~our~~not ~~anticipated~~able ~~expenditures~~to ~~for~~earn ~~the~~revenues, ~~next~~then ~~four~~we ~~months.~~may ~~However,~~not ~~business~~be able to continue as a going ~~activities~~concern ~~beyond~~and ~~the~~our ~~next~~financial ~~four~~condition ~~months~~and business prospects will ~~require~~be ~~additional~~adversely affected. ~~funding~~These infactors ~~the event~~raise substantial doubt that ~~our~~we ~~cash~~will onbe ~~hand~~able isto ~~insufficient~~continue as ~~for~~a ~~any~~going ~~additional~~concern ~~work~~and ~~proposed.~~adversely affect our ability to obtain additional financing.

Our financial statements included with this Annual 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:~~

1. Completed organizational activities; 2. Developed a business plan; 3. Obtained interim funding; 4. Engaged consultants for professional services; and 5. Acquired NGD™ Technology.

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:

1.	Our ability to successfully license our technology to OEM’s and the ability of licensees to attract customers;
2.	Our ability to generate revenue through the licensing of the NGD™ Technology;
3.	The amount and timing of costs relating to expansion of our operations;
4.	The announcement or introduction of competing distributors and products of competitors; and
5.	General economic conditions and economic conditions specific to the solar power generation.

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.

12We have not obtained sufficient financing to fund our anticipated business activities over the next twelve months. Our total expenditures over the next twelve months are anticipated to be approximately $1,700,000 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, ~~2011~~2012 year end audited financial statements, we ~~had~~are ~~cash~~ in the ~~amount~~development stage of ~~$343~~operations,~~289.~~ ~~Our total~~have ~~expenditures~~had ~~over~~losses ~~the~~from ~~next~~operations ~~twelve~~since ~~months~~inception, ~~are~~and ~~anticipated~~have insufficient working capital available to ~~be approximately~~meet ~~$12,600,000,~~ongoing ~~the~~financial ~~majority~~obligations over ofthe ~~which~~next isfiscal ~~due~~year. toAfter the ~~development~~fiscal ~~and~~year end, we will require additional ~~marketing~~financing offor ~~our~~any ~~products~~operational expenses and ~~general,~~to ~~legal,~~pursue ~~accounting~~our ~~and~~plan ~~administrative~~of operation. We ~~expenses~~will ~~associated~~require ~~with~~additional ~~our~~capital ~~reporting~~and ~~obligations~~financing ~~under~~in ~~the~~order ~~Exchange~~to ~~Act.~~continue otherwise our ~~Depending~~business onwill ~~the~~fail. ~~success~~We ofhave ~~our~~no ~~initial~~agreements ~~marketing~~for ~~efforts,~~additional wefinancing ~~estimate~~and ~~that~~there wecan ~~will~~be ~~require~~no ~~further~~assurance that additional funding will be available to ~~implement~~us anon ~~advertising~~acceptable terms ~~campaign~~in order to ~~establish and~~enable ~~enhance~~us ~~awareness~~to ofcomplete our ~~products~~plan of operation.

~~The~~If ~~accompanying financial statements have been prepared assuming that~~ we ~~will~~fail ~~continue~~to asre-negotiate ~~a going concern. As discussed in Note 1 of~~ our ~~June~~ ~~30,~~secured ~~2011~~debt ~~year~~obligations ~~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~~our ~~over~~secured ~~the next fiscal year. After the fiscal year end~~creditors, we ~~will~~could ~~require~~lose ~~additional financing for any operational expenses and to pursue~~ our ~~plan~~assets ~~of operation. We will require additional capital~~ and ~~financing~~be inforced ~~order~~ to ~~continue~~discontinue ~~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 ~~Steven~~Dr. ~~Pleging,~~Andras ~~our~~Pattantyus-Abraham ~~Chairman, Daryl J. Ehrmantraut,~~ our Chief Executive Officer, ~~and~~ President, ~~Dr.~~and ~~Andras Pattantyus-Abraham, our~~ Chief Technology Officer, Graham R. Hughes, our ~~Chief~~ Chief Financial Officer, Secretary and Treasurer, and ~~Stella~~Daryl ~~Guo,~~J. ~~our~~Ehrmantraut ~~Vice President~~our ofChief ~~Corporate~~Operating ~~Development~~Officer. We have an employment agreement with Mr. Ehrmantraut~~, Mr~~. ~~Pleging and Ms. Guo.~~ 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 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.

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:

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:

1.	We would not be able to pay our debts as they become due in the usual course of business; or

2.	Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

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.

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:

1.	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

2.	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.	contains a toll-free telephone number for inquiries on disciplinary actions;

5.	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

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.

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 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES.

Our principal office is located at Suite #35300, located in the Guinness Tower, 3rd Floor at 1055 West Hastings Street, Vancouver, British Columbia, V6E 2E9 Canada. ~~We have a six month lease and pay $2,687.00 CDN per month. The lease is set to expire on February 28, 2012.~~

Our property is adequate, suitable, has enough capacity to operate our business and is in good condition. We own no real estate holdings and we have no policy to acquire assets for possible capital gain or income.

ITEM 3. LEGAL PROCEEDINGS.

None.

ITEM 4. ~~SUBMISSION~~MINE OFSAFETY ~~MATTERS TO A VOTE OF SECURITY HOLDERS~~DISCLOSURES

None.

1514

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Quotations for our common stock are currently on the Over-The-Counter Bulletin Board (the “OTC Bulletin Board”) under the symbol "QSPW." The following is the high and low close information for our common stock during each fiscal quarter of our last two fiscal years.

QUARTER	HIGH ($)	LOW ($)
1st Quarter 2010	0.51	0.51
2nd Quarter 2010	2.20	0.51
3rd Quarter 2010	2.50	2.00
4th Quarter 2010	2.50	2.00
1st Quarter 2011	2.50	1.75
2nd Quarter 2011	2.25	2.24
3rd Quarter 2011	2.80	1.50
4th Quarter 2011	1.51	0.51
1st Quarter 2012	1.10	0.55
2nd Quarter 2012	0.9	0.18
3rd Quarter 2012	0.28	0.07
4th Quarter 2012	0.12	0.04

The high and low close price information provided above was obtained from the Yahoo Finance and the OTC Bulletin Board. The market quotations provided reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.

Holders of Our Common Stock

As of ~~August~~September 2318, ~~2011~~2012, there were ~~146~~154,~~987~~429,~~692~~742 shares of our common stock issued and outstanding that are held of record by ~~216~~260 registered stockholders. We believe that a number of stockholders hold stock on deposit with their brokers or investment bankers registered in the name of stock depositories.

~~Performance~~Dividends ~~Graph~~

~~The~~We ~~performance~~have ~~graph~~not ~~above~~declared ~~shows~~any ~~the~~dividends ~~total~~on ~~stockholder~~our ~~return~~common stock since ofour ~~investment~~inception. ~~made~~There onare ~~June~~no ~~30,~~dividend ~~2011~~restrictions ~~for~~that limit our ability to pay dividends on our common stock, ~~the~~in ~~NASDAQ~~our ~~composite and~~Articles ~~the~~of ~~Russell~~Incorporation ~~3000~~or ~~Technology~~Bylaws. ~~All~~Our governing ~~values~~statute, ~~assume~~Chapter ~~reinvestment~~78 of the ~~full amount~~Nevada ofRevised ~~all~~Statute ~~dividends.~~(“NRS”), Wedoes provide ~~have~~limitations ~~selected~~on ~~the~~our ~~Russell~~ability ~~3000~~to ~~Technology~~declare ~~index~~dividends. ~~for comparison~~Section ~~purposes,~~78.288 asof wethe NRS doprohibits ~~not~~us ~~believe~~from wedeclaring ~~can~~dividends ~~reasonably~~where, ~~identify~~after ~~an appropriate~~giving ~~peer~~effect ~~group~~to ~~index.~~the distribution ~~The~~of ~~comparisons~~the dividend:

16(a) we would not be able to pay our debts as they become due in the usual course of business; or (b) our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders who may have preferential rights and whose preferential rights are superior to those receiving the distribution (except as otherwise specifically allowed by our Articles of Incorporation).

~~show~~Recent inSales ~~the graph below is not indicative~~ of, ~~nor~~Unregistered isSecurities ~~it intended to forecast, the future performance of our common stock.~~

~~Dividends~~On August 3, 2012, we issued 3,900,000 units (each a “Unit”) at an effective price of $0.05 per Unit for total proceeds of $195,000 in satisfaction of subscriptions received during our fiscal quarter ended March 30, 2012. The issuance was completed pursuant to the provisions of Regulation S of the Act. Each Unit consisted of one share of our common stock and one share purchase warrant exercisable at a price of $0.25 per share until November 3, 2012. We issued an additional 290,000 shares to two fundraisers as payment of finder’s fees related to the offering. Each subscriber and fundraiser represented that they were not a “U.S. Person” as that term is defined under Regulation S of the Securities Act and was not acquiring the shares for the account or benefit of any U.S. Person.

We15 have not declared any dividends on our common stock since our inception. There are no dividend restrictions that limit our ability to pay dividends on our common stock in our Articles of Incorporation or Bylaws. Our governing statute, Chapter 78 of the Nevada Revised Statute (“NRS”), does provide limitations on our ability to declare dividends. Section 78.288 of the NRS prohibits us from declaring dividends where, after giving effect to the distribution of the dividend:

~~(a)~~Also weon ~~would~~August ~~not~~3, be2012, ~~able~~we issued 60,000 shares to ~~pay~~a consultant. ~~our~~The ~~debts~~shares aswere ~~they~~issued ~~become~~as ~~due~~compensation inunder the ~~usual~~terms ~~course~~ of ~~business;~~a consulting oragreement. ~~(b)~~The ~~our~~issuance ~~total~~was ~~assets~~completed ~~would~~pursuant beto ~~less than~~ the ~~sum~~provisions of Regulation ~~our~~S ~~total~~of ~~liabilities plus~~ the ~~amount~~Act. ~~that~~The ~~would~~consultant berepresented ~~needed,~~that ifhe wewas ~~were~~not toa be“U.S. Person” ~~dissolved~~as atthat ~~the~~term ~~time~~is ofdefined ~~distribution,~~in toRegulation ~~satisfy~~S ~~the preferential rights upon dissolution~~ of ~~stockholders~~the ~~who~~Act ~~may have preferential rights~~ and ~~whose~~was ~~preferential~~not ~~rights~~acquiring the ~~are~~shares ~~superior~~for ~~to those receiving~~ the ~~distribution~~account ~~(except~~or asbenefit ~~otherwise~~of ~~specifically~~any ~~allowed~~U.S. ~~by our Articles of Incorporation)~~Person.

Recent Sales of Unregistered Securities

On August 10, 2011, we issued 60,000 shares to a consultant. The shares were issued as compensation under the terms of a consulting agreement. The issuance was completed pursuant to the provisions of Regulation S of the Act. The consultant represented that he was not a “U.S. Person” as that term is defined in Regulation S of the Act and was not acquiring the shares for the account or benefit of any U.S. Person.

ITEM 6. SELECTED FINANCIAL DATA.

			June 30,
	2011	2010	2009	2008	2007
Sales	$Nil	$Nil	$Nil	$Nil	$Nil
Gross Profit	$Nil	$Nil	$Nil	$Nil	$Nil
Net Income	$Nil	$Nil	$Nil	$Nil	$Nil
Net Income Per Share, diluted	$Nil	$Nil	$Nil	$Nil	$Nil

Not Applicable.

								June 30,
		2011			2010			2009			2008			2007
Revenues		-			-			-			-			-
Operating Expenses	$	4,728,538		$	1,360,963		$	28,747		$	166,032		$	15,652
Net Loss	$	(4,728,538	)	$	(1,360,963	)	$	(28,747	)	$	(166,032	)	$	(15,652	)
Net Loss Per Share, basic and diluted	$	(0.03	)	$	(0.01	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~For~~PLAN ~~the~~OF ~~period~~OPERATION from inception on April 14, 2004 to June 30, 2011, we have not earned any operating revenue. We had an accumulated net loss of $6,376,254 from the period of inception to June 30, 2011. We incurred total expenses of $6,270,254 from inception to June 30, 2011.

							June 30,
		2011		2010			2009		2008		2007
Working Capital	$	182,548	$	(391,425	)	$	5,747	$	34,494	$	526
Total Assets	$	1,843,081	$	1,662,213		$	13,247	$	41,994	$	8,026
Stockholders’ Equity	$	1,680,664	$	1,184,544		$	5,747	$	34,494	$	526

The following discussion and analysis summarizes our plan of operation for the next twelve months, our results of operations for the year ended June 30, 2012 and changes in our financial condition from June 30, 2011.

AsIf ofwe ~~June~~can ~~30,~~obtain ~~2011,~~sufficient financing we ~~had~~intend ~~cash~~to oncontinue ~~hand~~the final development of ~~$343~~our NGD™ Technology,~~289.~~ ~~Since~~and ~~our~~identify and engage original ~~inception,~~equipment wemanufacturers ~~have~~(“OEM’s”) ~~used~~interested in licensing our ~~common~~technology. ~~stock~~We anticipate that the licensing agreements will be between us and OEM’s with the expertise and facilities required to ~~raise~~mass ~~money~~manufacture ~~for~~solar cells based on our NGD™ ~~operations~~Technology and that the OEM’s will distribute the solar cells worldwide ~~for~~using ~~our~~their ~~acquisition~~existing sales and marketing channels and at their expense. The cost of manufacture will be solely the responsibility of the OEM’s. We ~~have~~expect ~~not~~to receive ~~attained~~revenue ~~profitable~~on ~~operations~~royalties ~~and~~based ~~are~~on the number of cells produced by the OEM’s. ~~dependent~~This ~~upon~~business ~~obtaining~~model ~~financing~~should allow us to ~~pursue~~maximize capital resources available at startup and through our ~~plan~~OEM oflicensees ~~operation~~positively address the demand for high efficiency solar cell devices. ~~For~~This ~~these~~business model should enable us to increase ~~reasons~~revenues and create brand recognition without the time, ~~our~~capital ~~auditors~~and risk associated with manufacturing plant construction.

17Our research activities are currently suspended. We will need to acquire additional financing to pay outstanding liabilities and to fund additional research and development activities. There is no assurance that we will be able to obtain sufficient financing to proceed with our plan of operation.

~~stated~~RESULTS inOF ~~their~~OPERATION ~~report to our audited financial statements for the year ended June 30, 2011, that there is substantial doubt that we will be able to continue as a going concern.~~

WeFor ~~have~~the noperiod ~~revenues to date~~ from ~~our~~ inception. ~~We anticipate continuing to rely~~ on ~~equity~~April ~~sales~~14, of2004 ~~our common stock in order~~ to ~~continue~~June to30, ~~fund~~2012, ~~our~~we ~~business~~have ~~operations.~~not ~~Issuances~~earned ofany ~~additional~~operating ~~shares will result in dilution to our existing stockholders~~revenue. ~~There~~We ishad noan ~~assurance~~accumulated ~~that~~net ~~we will~~loss ~~achieve any~~ of ~~additional~~$13,755,070 ~~sales~~since ofinception. ~~our~~We ~~equity~~incurred ~~securities~~total oroperating ~~arrange~~expenses ~~for debt or~~of ~~other~~$13,649,070 ~~financing~~since ~~for to fund our planned business activities~~inception.

~~ITEM~~We 7have not earned any revenues since inception. ~~MANAGEMENT'S~~We ~~DISCUSSION~~do ~~AND~~not anticipate ~~ANALYSIS~~earning OFrevenues ~~FINANCIAL~~until ~~CONDITION~~such ~~AND~~time ~~RESULTS~~as OFwe ~~OPERATIONS~~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.

~~PLAN~~Administrative OFExpenses ~~OPERATION~~

~~The~~Administrative ~~following~~expenses ~~discussion and analysis summarizes our plan of operation~~ for ~~the~~this ~~next~~period ~~twelve~~included ~~months, our results of operations for~~ the ~~year~~following ~~ended~~expenses: ~~June 30, 2011 and changes in our financial condition from June 30, 2010.~~

If16 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.

Administrative Expenses		Fiscal Year Ended June 30			Percentage
					Increase/
		2012		2011	(Decrease)
Amortization of Equipment	$	1,715	$	1,112	54.2%
Amortization of Patents		1,496,448		76,741	1,850.0%
General And Administrative		650,924		539,105	20.7%
Interest and Accretion of Convertible Loan		339,642		-	100.0%
Professional Fees		818,041		543,419	50.5%
Research and Development		2,710,407		2,322,046	16.7%
Stock Based Compensation		1,361,639		1,246,115	9.3%
Total Administrative Expenses	$	7,378,816	$	4,728,538	56.0%

~~RESULTS~~Our OFadministrative ~~OPERATION~~expenses for the fiscal year ended 2012 have increased primarily as a result of increases in amortization of equipment and patents, general and administrative expenses, interest and accretion of convertible loan, professional fees, research and development and stock based compensation.

~~For~~General ~~the~~and ~~period~~administrative ~~from~~expenses ~~inception~~primarily onrelate ~~April 14, 2004~~ to ~~June 30,~~fees ~~2011,~~paid weto ~~have~~our ~~not earned any operating revenue. We had an accumulated net loss of $6~~officers,~~376,254~~ ~~since inception. We incurred total operating expenses of $6~~directors,~~270,254~~ ~~since~~consultants ~~inception~~and employees.

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

~~Administrative~~Stock ~~Expenses~~based compensation relates to recorded expenses for stock options granted to our directors, officers and consultants.

WeProfessional ~~have~~fees ~~incurred~~related ~~administrative~~to ~~expenses~~meeting inour ~~the~~ongoing ~~amount of~~reporting ~~$6,270,254~~requirements ~~for~~with the ~~period~~SEC ~~from~~and ~~April~~consultant ~~14,~~fees ~~2004~~for ~~(inception)~~investor torelations ~~June 30, 2011~~activities. ~~Administrative expenses for this period included the following expenses:~~

18Subject to obtaining sufficient financing, 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.

Administrative Expenses				June 30				Inception (April 14,
		2011		2010		2009		2004) to
								June 30, 2011
Amortization of Equipment	$	1,112	$	556	$	-	$	1,668
Amortization of Patents		76,741		38,370		-		115,111
General And Administrative		539,105		269,693		28,747		989,551
Professional Fees		543,419		209,397		-		752,816
Research and Development		2,322,046		683,238		-		3,005,284
Stock Based Compensation		1,246,115		159,709		-		1,405,824
Total Administrative Expenses	$	4,728,538	$	1,360,963	$	28,747	$	6,270,254

Net Loss

~~Our~~We ~~administrative~~incurred ~~expenses~~a ~~for~~loss in the ~~fiscal~~amount ~~year~~of ~~ended~~$13,755,070 ~~2011~~for ~~have~~the period ~~increased~~from ~~primarily~~inception asto aJune ~~result~~30, of2012. ~~increased~~Our ~~operations~~loss inwas attributable to the ~~development~~costs of ~~our~~operating ~~NGDTM~~expenses ~~Technology.~~which ~~This~~primarily ~~has~~consisted ~~resulted~~of ~~in increased~~ research and development ~~activities and~~ costs, general and administrative expenses., ~~All~~amortization ~~expenses~~of equipment and patents, ~~increased~~stock ~~from~~based ~~fiscal~~compensation, ~~2010~~expenses related to ~~2011~~loans received and preparing and filing our Current, Quarterly and Annual Reports.

~~Professional~~LIQUIDITY ~~fees~~AND ~~related~~CAPITAL toRESOURCES ~~the acquisition of the NGDTM Technology and meeting our ongoing reporting requirements with the Securities and Exchange Commission.~~

WeWorking ~~anticipate~~Capital 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

							Percentage
		At June 30, 2012			At June 30, 2011		Increase /(Decrease)
Current Assets	$	36,934		$	344,965		(89.3)%
Current Liabilities		(1,567,857	)		(162,417	)	865.3%
Working Capital Surplus (Deficit)	$	(1,530,923	)	$	182,548		(938.6)%

WeCash ~~incurred~~Flows a loss in the amount of $6,376,254 for the period from inception to June 30, 2011. 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.

LIQUIDITY AND CAPITAL RESOURCES

		Year Ended			Year Ended
		June 30, 2012			June 30, 2011
Cash Flows used in Operating Activities	$	(2,969,910	)	$	(3,440,271	)
Cash Flows used in Investing Activities		(3,620	)		-
Cash Flows provided by Financing Activities		2,659,673			3,713,330
Net Increase (Decrease) in Cash During Period	$	(313,857	)	$	273,059

Working Capital
							Percentage
		At June 30, 2011			At June 30, 2010		Increase /(Decrease)
Current Assets	$	344,965		$	86,244		300.0%
Current Liabilities		(162,417	)		(477,669	)	(66.0)%
Working Capital Surplus (Deficit)	$	182,548		$	(391,425	)	(146.6)%

		At June 30, 2010			At June 30, 2009		Percentage
							Increase / Decrease
Current Assets	$	86,244		$	13,247		551.0%
Current Liabilities		(477,669	)		(7,500	)	6,268.9%
Working Capital Surplus	$	(391,425	)	$	5,747		(6,910.9)%

As at June 30, 2012, we had cash of $29,432 and a working capital deficit of $1,530,923.

Cash Flows
		Year Ended			Year Ended			Year Ended
		June 30, 2011			June 30, 2010			June 30, 2009
Cash Flows used in Operating Activities	$	(3,440,271	)	$	(590,754	)	$	(28,747	)
Cash Flows used in Investing Activities		-			(3,336	)		-
Cash Flows provided by Financing Activities		3,713,330			651,073			-
Net Increase (decrease) in Cash During Period	$	273,059		$	56,983		$	(28,747	)

The change in our working capital at June 30, 2012 from our year ended June 30, 2011 are primarily a result of increases in accounts payable and accrued liabilities, the recording of loans payable and decreases in cash. The decrease in our cash flows during the year ended on June 30, 2012 is primarily due to purchases of equipment used in our research and development activities and decreases in proceeds from the issuance of our common stock. The decrease in our cash used during the period ended on June 30, 2012, from the comparable periods of the preceding fiscal years are due decreased research and development activities related to our NGD^TM Technology. This was partially offset by our professional fees related to the preparation of our current, quarterly and annual reports filed on Forms 8-K, 10-Q and 10-K respectively, with the SEC and from the fact that we had no revenue on June 30, 2012.

19Future Financings

As atof June 30, ~~2011~~2012, we had cash on hand of $~~343~~29,~~289~~432. Since our inception, we have used proceeds from the sales of our common stock and aloans ~~working~~to ~~capital~~fund ~~surplus~~our operations and for our technology acquisition. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of ~~$182~~operation. For these reasons,~~548~~ our auditors stated in their report to our audited financial statements for the year ended June 30, 2012, that there is substantial doubt that we will be able to continue as a going concern.

~~The~~On ~~change~~August in17, ~~our working capital at June 30~~2012, ~~2011 from~~ our ~~year~~ ~~ended~~Board ~~June 30, 2010 are primarily a result~~ of ~~the~~Directors ~~decreases~~approved inan ~~accounts~~offering ~~payable~~(the ~~and~~“Foreign ~~accrued~~Units ~~liabilities,~~Offering”) ~~subscription received in advance and our revolving line~~ of ~~credit~~up ~~with~~to ~~CIO. The increase in our cash used during the period ended on June 30~~10, ~~2011~~000,000 ~~from~~shares (the ~~comparable~~“Shares”) ~~periods~~at ~~of the preceding~~a ~~fiscal~~price ~~years are due to the cost~~ of ~~our~~$0.02 ~~research~~US ~~and~~per ~~development~~Share ~~activities related~~pursuant to ~~our~~Regulation ~~NGDTM~~S ~~Technology~~of ~~and our professional fees related to~~ the ~~preparation~~Securities ofAct. ~~our current, quarterly and annual reports filed on Forms 8-K,~~To ~~10-Q~~date ~~and~~we ~~10-K~~have ~~respectively,~~not ~~with~~received ~~the~~any ~~SEC~~subscriptions ~~and~~under ~~from~~this ~~the fact that we had no revenue on June 30, 2011~~offering.

~~The~~We ~~decreases~~have inno ~~our~~revenues ~~working~~to ~~capital~~date ~~at June 30, 2010~~ from our ~~year~~ ~~ended~~inception. ~~June~~We ~~30,~~anticipate continuing ~~2009~~to ~~are~~rely ~~primarily~~on aloans ~~result~~or aequity ~~result~~sales of ~~the~~our ~~increases~~common ~~in accounts~~stock ~~payable and accrued liabilities, subscriptions received~~ in ~~advance~~order ~~and~~to ~~our~~continue ~~revolving~~to ~~line~~fund ofour ~~credit~~business ~~with CIO~~operations. ~~The~~Issuances ~~increase~~of inadditional ~~our~~shares ~~cash used during the~~will ~~period~~result ~~ended~~in ondilution ~~June~~to ~~30,~~our ~~2010,~~existing ~~from~~stockholders. ~~the~~We ~~comparable~~do ~~periods~~not ofbelieve ~~the~~that ~~preceding~~we have ~~fiscal~~obtained ~~years~~sufficient ~~are~~financing ~~due~~ to ~~the~~cover ~~cost of~~ our ~~acquisition~~anticipated ofexpenses over the ~~NGDTM~~next ~~Technology~~four ~~and~~months. ~~our~~There ~~professional~~is ~~fees~~no ~~related~~assurance tothat ~~the~~we ~~acquisition~~will ~~thereto~~achieve ~~and~~any ~~the preparation~~additional ofsales of our ~~current,~~equity ~~quarterly~~securities ~~and~~or ~~annual~~arrange ~~reports~~for ~~filed~~debt onor ~~Forms~~other ~~8-K, 10-Q~~financing ~~and~~for ~~10-K~~to ~~respectively,~~fund ~~with the SEC and from the fact that we had no~~our ~~revenue~~planned onbusiness ~~June 30, 2010~~activities.

~~Future~~Off-Balance ~~Financings~~Sheet Arrangements

AsOn ofMay ~~June 30~~23, ~~2011~~2012, weCanadian ~~had~~Integrated ~~cash~~Optics on(BC) ~~hand of $343,289~~Ltd. ~~Since our~~ ~~inception~~(“CIO-BC”), wea ~~have~~company ~~used~~that ~~our~~conducts ~~common~~research ~~stock~~and todevelopment ~~raise~~activities ~~money~~on ~~for~~the NGDTM ~~our~~Technology ~~operations~~on ~~and for~~ our ~~acquisition.~~behalf, Weentered ~~have~~into ~~not~~its ~~attained~~sixth ~~profitable~~amendment agreement ~~operations~~(the ~~and~~“Amended ~~are dependent~~Research ~~upon~~Agreement”) ~~obtaining~~to ~~financing~~the toresearch ~~pursue~~agreement ~~our~~(the “CIO-BC ~~plan~~Research ofAgreement”) ~~operation~~with SFU. ~~For~~The ~~these~~Amended Research Agreement was dated ~~reasons~~effective April 15, ~~our~~2012. ~~auditors~~Under ~~stated~~the interms ~~their~~of ~~report~~the toAgreement, ~~our~~CIO-BC ~~audited~~issued ~~financial~~SFU ~~statements~~a ~~for~~promissory note (the ~~year~~“Promissory ~~ended~~Note”) ~~June~~in ~~30,~~the ~~2011~~amount of CDN $452,749 ~~that~~in ~~there~~respect of isprevious ~~substantial~~research ~~doubt~~activities ~~that~~conducted weon ~~will be~~our ~~able~~behalf. toThe ~~continue~~Promissory asNote bears interest at a ~~going~~rate ~~concern~~of 9% per annum.

WeTo ~~have~~secure nopayment ~~revenues~~under tothe ~~date~~Amended ~~from~~Research ~~our~~Agreement, ~~inception.~~ We ~~anticipate~~, ~~continuing~~along towith ~~rely~~SubCo, onhave ~~equity~~agreed ~~sales~~to ofprovide ~~our~~a ~~common~~secured ~~stock~~guarantee ~~in order~~ to ~~continue~~SFU ~~to fund our business operations. Issuances~~ of ~~additional~~the Promissory ~~shares~~Note, ~~will~~charging, ~~result~~ in ~~dilution~~ tofavor ~~our existing stockholders. There is no assurance that we will achieve any~~ of ~~additional~~SFU, ~~sales~~three of our ~~equity~~PVD ~~securities~~75 ~~or arrange for debt or~~Deposition ~~other financing for to fund our planned business activities~~tools.

~~Foreign~~We ~~Private~~entered ~~Placement~~into this arrangement with SFU in order to ensure that research and development activities could continue. In the event that CIO defaults on the Promissory Note, SFU will be able to collect from us. Our research activities with SFU have been suspended due to non-payment. SFU has made a demand for payment of the Promissory Note and we are in default. We may lose three of our PVD 75 Deposition tools if we cannot settle the outstanding indebtedness.

~~Our~~CRITICAL ~~Board~~ACCOUNTING ofPOLICIES Directors approved a private placement offering of up to 3,000,000 shares of our common stock at a price of $1.00 per share (the “Foreign Private Placement”). This offering will be made to persons who are not “U.S. Persons” as defined under Regulation S of the Securities Act. We have not issued any securities under this offering as at June 30, 2011.

WeOur ~~intend~~critical toaccounting ~~use~~policies ~~the~~are ~~net~~included ~~proceeds~~in ~~from~~the ~~these~~Notes ~~financings~~ to ~~further~~our ~~develop~~Financial ~~its~~Statements ~~NGDTM~~contained ~~Technology~~in ~~and~~this ~~for~~Annual ~~working~~Report ~~capital purposes. There is no assurance that the Foreign Private Placement will be completed~~ on ~~the~~Form ~~above terms or at all~~10-K.

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, and to obtain necessary or desired certifications for our photovoltaic modules, 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.

The effect that currency fluctuations may have on our capital equipment purchases, manufacturing costs and the price of our planned photovoltaic modules;

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

Contractual Obligations	Payments Due By Period
	Total	Less than 1 Year	1-3 Years	3-5 Years	More Than 5 Years
Research Agreement	$599,593	$599,593	-	-	-
			-	-	-

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

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are included in the Notes to our Financial Statements contained in this Annual Report on Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Foreign~~Not ~~Currency~~Applicable. ~~Exchange Risk~~

~~The~~18 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.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements

1.	~~Reports~~Report of Independent Registered Public Accounting Firms:
2.	Audited Consolidated Financial Statements for the year ended June 30, ~~2011~~2012, including:

a. Consolidated Balance Sheets as at June 30, ~~2011~~2012 and ~~2010~~2011; b. Consolidated Statements of Operations for the years ended June 30, ~~2011,~~2012 ~~2010~~ and ~~2009~~2011 and accumulated from inception to June 30, ~~2011~~2012; c. Consolidated Statements of Cash Flows for the years ended June 30, ~~2011,~~2012 ~~2010~~ and ~~2009~~2011 and accumulated from inception to June 30, ~~2011~~2012; d. Consolidated Statement of Stockholders’ Equity (Deficiency) for the period from inception to June 30, ~~2011~~2012; and e. Notes to the Consolidated Financial Statements.

2319

DAVIDSON & COMPANY LLP
DAVIDSON & COMPANY LLP		Chartered Accountants	A Partnership of Incorporated Professionals

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of
Quantum Solar Power Corp.
(A Development Stage Company)

We have audited the accompanying consolidated balance ~~sheet~~sheets of Quantum Solar Power Corp. ~~(the “Company”)~~ as of June 30, ~~2011~~2012 and 2011 ~~2010,~~ and the related consolidated statements of operations, stockholders' equity, (deficiency) and cash flows for the years ended June 30, ~~2011~~2012 and ~~2010~~2011 and for the period from April 14, 2004 (~~Inception~~inception) to June 30, ~~2011~~2012. Quantum Solar Power Corp.'’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ~~the~~Quantum ~~Company~~ Solar Power Corp. as of June 30, ~~2011~~2012 and ~~2010~~2011, and the results of its operations and its cash flows for the years ended June 30, ~~2011~~ 2012 and ~~2010~~2011, and for the period from April 14, 2004 (~~Inception~~inception) to June 30, ~~2011~~ 2012, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been ~~prepared~~ prepared assuming that ~~the~~Quantum ~~Company~~Solar Power Corp. will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company ~~generated~~has ~~negative~~suffered ~~cash~~recurring ~~flows~~losses from ~~operating~~ ~~activities~~operations, ~~during~~defaulted ~~the~~on ~~past~~loan ~~year. The Company has an accumulated~~and ~~deficit~~operating ofagreements ~~approximately~~and ~~$6,748,254~~has ~~for~~no ~~the~~current ~~year~~source ~~ended~~of ~~June~~revenue ~~30,~~that ~~2011.~~raise ~~This~~substantial ~~raises substantial~~ doubt about ~~the~~its ~~Company's~~ ability to continue as a going concern. Management’s plans in ~~concern~~regard to these matters are also described in Note 1. The ~~financial~~consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We“DAVIDSON ~~also~~& ~~have audited, in accordance with the standards of the~~COMPANY Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of June 30, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated September 12, 2011 expressed an adverse opinion on the Company’s internal control over financial reporting because of material weaknesses.LLP”

	"Davidson & Company LLP"
Vancouver, Canada	Chartered Accountants
September 12, 2011

Vancouver, Canada

Chartered Accountants

October 12, 2012

QUANTUM SOLAR POWER CORP.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in United States Dollars)

		June 30,			June 30,
		2012			2011
ASSETS

Current
Cash	$	29,432		$	343,289
Receivables		6,852			-
Prepaid expenses		650			1,676
Total Current Assets		36,934			344,965

Equipment (Note 3)		3,573			1,668
Patents (Note 4)		-			1,496,448

Total Assets	$	40,507		$	1,843,081


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current
Accounts payable and accrued liabilities	$	1,218,361		$	162,417
Loans payable (Note 5)		12,910			-
Convertible loan (Note 6)		336,586			-
Total Liabilities		1,567,857			162,417

Stockholders' equity (deficiency)
Preferred stock, $0.001 par value 10,000,000 shares authorized - no shares issued and outstanding Common stock, $0.001 par value 400,000,000 shares authorized and 150,179,742 shares outstanding as of June 30, 2012 (2011 – 146,927,692) (Note 7)		150,179			146,927
Subscriptions received in advance (Note 7)		195,000			-
Commitment to issue shares (Note 7)		18,700			60,000
Additional paid in capital (Note 7)		12,235,841			8,221,991
Accumulated deficit during development stage		(14,127,070	)		(6,748,254	)
Total Stockholders' Equity (Deficiency)		(1,527,350	)		1,680,664
Total Liabilities and Stockholders' Equity (Deficiency)	$	40,507		$	1,843,081

Nature and continuance of operations (Note 1)
Subsequent event (Note 11)

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

F-1

~~REPORT~~QUANTUM SOLAR POWER CORP. (A Development Stage Company) CONSOLIDATED STATEMENTS OF ~~INDEPENDENT~~OPERATIONS ~~REGISTERED~~(Expressed ~~PUBLIC~~in ~~ACCOUNTING~~United ~~FIRM~~States Dollars)

To the Stockholders and Board of Directors of Quantum Solar Power Corp. (A Development Stage Company)

								For the
								period from
		For the			For the			April 14, 2004
		year ended			year ended			(Inception) to
		June 30,			June 30,			June 30,
		2012			2011			2012

OPERATING EXPENSES
Amortization of equipment	$	1,715		$	1,112		$	3,383
Amortization of patents		1,496,448			76,741			1,611,559
General and administrative (Note 9)		650,924			539,105			1,640,475
Interest and accretion of convertible loan		339,642			-			339,642
Professional fees		818,041			543,419			1,570,857
Research and development		2,710,407			2,322,046			5,715,691
Stock-based compensation (Note 7)		1,361,639			1,246,115			2,767,463
		(7,378,816	)		(4,728,538	)		(13,649,070	)
OTHER ITEM
Impairment of intangible assets		-			-			(106,000	)
Loss and comprehensive loss for the year	$	(7,378,816	)	$	(4,728,538	)	$	(13,755,070	)

Basic and diluted loss per common share	$	(0.05	)	$	(0.03	)
Weighted average number of common shares outstanding		148,930,408			145,252,662

We have audited the internal control over financial reporting of Quantum Solar Power Corp. (the “Company”) as of June 30, 2011 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The ~~Company’s~~ ~~management~~accompanying isnotes ~~responsible~~are ~~for~~an ~~maintaining~~integral ~~effective~~part ~~internal control over financial reporting and for its assessment~~ of ~~the effectiveness of internal~~these ~~control~~consolidated ~~over~~ financial ~~reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting~~statements. ~~Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.~~

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment: Management concluded that the Company’s entity-level controls related to the control environment, control activities, and monitoring functions have not been designed adequately. With respect to the control environment, control activities, and monitoring functions, management determined that these material weaknesses were primarily attributable to a lack of formalized policies and procedures, lack of independent directors and audit committee, lack of segregation of duties in the expenditure cycle, lack of controls to monitor financial reporting, lack of formalized accounting approval and review procedures, and a lack of compliance and internal control function. These material weaknesses contributed to the other material weaknesses described below as well as to an environment where there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management also concluded that inadequate segregation of duties and independent review have resulted in ineffective controls in the expenditures, financial closing and reporting and treasury processes. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audits of the financial statements as of and for the year ended June 30, 2011 of the Company, and this report does not affect our report on those financial statements.

F-2

InQUANTUM ~~our~~SOLAR ~~opinion,~~POWER ~~because~~CORP. of(A ~~the~~Development ~~effect~~Stage ~~of the material weaknesses identified above on the achievement of the objectives of the control criteria, the~~ Company) ~~has~~CONSOLIDATED ~~not~~STATEMENTS ~~maintained~~OF ~~effective~~STOCKHOLDERS’ ~~internal~~EQUITY ~~control~~(DEFICIENCY) ~~over financial~~(Expressed ~~reporting as of June 30, 2011, based on the criteria established~~ in ~~Internal~~United ~~Control—Integrated~~States ~~Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO~~Dollars).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets of the Company as of June 30, 2011 and the related statements of operations, stockholders’ equity and cash flows for the years then ended and our report dated September 12, 2011 expressed an unqualified opinion.

																	Total
							Additional			Commitment		Subscriptions		Accumulated			Stockholders'
							Paid in			to Issue		Received in		Deficit During			Equity
	Shares			Amount			Capital			Shares		Advance		the Dev. Stage			(Deficiency)
Balance, April 14, 2004 (Inception)	-		$	-		$	-		$	-	$	-	$	-		$	-
Common shares issued at par	117,200,000			15			92,485			-		-		-			92,500
Loss	-			-			-			-		-		(9,557	)		(9,557	)
Balance, June 30, 2004	117,200,000			15			92,485			-		-		(9,557	)		82,943
Loss	-			-			-			-		-		(40,111	)		(40,111	)
Balance, June 30, 2005	117,200,000			15			92,485			-		-		(49,668	)		42,832
Loss	-			-			-			-		-		(26,654	)		(26,654	)
Balance, June 30, 2006	117,200,000			15			92,485			-		-		(76,322	)		16,178
Loss	-			-			-			-		-		(15,652	)		(15,652	)
Balance, June 30, 2007	117,200,000			15			92,485			-		-		(91,974	)		526
Common shares issued at $2.00 per share	100,000			100			199,900			-		-		-			200,000
Loss	-			-			-			-		-		(166,032	)		(166,032	)
Balance, June 30, 2008	117,300,000			115			292,385			-		-		(258,006	)		34,494
Loss	-			-			-			-		-		(28,747	)		(28,747	)
Balance, June 30, 2009	117,300,000			115			292,385			-		-		(286,753	)		5,747
Private placement	280,000			280			559,720			-		-		-			560,000
Share issuance costs	-			-			(4,140	)		-		-		-			(4,140	)
Stock-based compensation	-			-			159,709			-		-		-			159,709
Commitment to issue shares	-			-			-			112,632		-		-			112,632
Acquisition of patents	71,500,000			71,500			1,540,059			-		-		-			1,611,559
Shares issued for services	50,000			50			99,950			-		-		-			100,000
Par value reclassification	-			117,185			(117,185	)		-		-		-			-
Return to treasury	(47,000,000	)		(47,000	)		47,000			-		-		-			-
Loss	-			-			-			-		-		(1,360,963	)		(1,360,963	)
Balance, June 30, 2010	142,130,000		$	142,130		$	2,577,498		$	112,632	$	-	$	(1,647,716	)	$	1,184,544

	"Davidson & Company LLP"
Vancouver, Canada	Chartered Accountants
September 12, 2011

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

F-3

~~Report~~QUANTUM ~~of Independent~~SOLAR ~~Registered~~POWER ~~Public~~CORP. ~~Accounting~~(A ~~Firm~~Development Stage Company) CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY) (Expressed in United States Dollars)

To The Stockholders and Board of Directors of Quantum Solar Power Corp. We have audited the accompanying consolidated balance sheet of Quantum Solar Power Corp. (A Development Stage Company) as of June 30, 2009 and the related consolidated statements of operations, changes in consolidated stockholders’ equity and cash flows for the year ended June 30, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

															Accumulated			Total
							Additional			Commitment			Subscriptions		Deficit During			Stockholders'
							Paid in			to Issue			Received in		the			Equity
	Shares			Amount			Capital			Shares			Advance		Dev. Stage			(Deficiency)
Balance, June 30, 2010	142,130,000		$	142,130		$	2,577,498		$	112,632		$	-	$	(1,647,716	)	$	1,184,544
Dividend-warrants	-			-			372,000			-			-		(372,000	)		-
Private placement	4,049,560			4,049			4,045,511			-			-		-			4,049,560
Return to nonqualified investors	(8,000	)		(8	)		(15,992	)		-			-		-			(16,000	)
Exercise of warrants	372,000			372			3,348			-			-		-			3,720
Shares issued as finder’s fees	161,500			161			161,339			-			-		-			161,500
Share issuance costs	-			-			(390,237	)		-			-		-			(390,237	)
Stock-based compensation	-			-			1,246,115			-			-		-			1,246,115
Shares issued for services	222,632			223			222,409			(112,632	)		-		-			110,000
Commitment to issue shares	-			-			-			60,000			-		-			60,000
Loss	-			-			-			-			-		(4,728,538	)		(4,728,538	)
Balance, June 30, 2011	146,927,692			146,927			8,221,991			60,000			-		(6,748,254	)		1,680,664
Private placements	2,662,050			2,662			2,128,948			-			-		-			2,131,610
Shares issued for services	590,000			590			203,110			(60,000	)		-		-			143,700
Share issuance costs	-			-			(21,805	)		-			-		-			(21,805	)
Stock-based compensation	-			-			1,361,639			-			-		-			1,361,639
Subscriptions received in advance	-			-			-			-			195,000		-			195,000
Commitment to issue shares	-			-			-			18,700			-		-			18,700
Beneficial conversion feature attributed to convertible loan	-			-			341,958			-			-		-			341,958
Loss	-			-			-			-			-		(7,378,816	)		(7,378,816	)

Balance, June 30, 2012	150,179,742		$	150,179		$	12,235,841		$	18,700		$	195,000	$	(14,127,070	)	$	(1,527,350	)

WeThe ~~conducted~~accompanying ~~our~~notes ~~audit~~are inan ~~accordance~~integral ~~with the~~part ~~standards~~ of ~~the~~these consolidated ~~Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the~~ financial statements ~~are free of material misstatement~~. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Quantum Solar Power Corp. as of June 30, 2009, and the results of its operations and its cash flows for the year ended June 30, 2009 in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company’s need to seek new sources or methods of financing or revenue to pursue its business strategy, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Jewett, Schwartz, Wolfe & Associates

Jewett, Schwartz, Wolfe & Associates

Hollywood, Florida October 20, 2009

F-4

QUANTUM SOLAR POWER CORP. (A Development Stage Company) ~~BALANCE~~CONSOLIDATED ~~SHEETS~~STATEMENTS OF CASH FLOWS (Expressed in United States Dollars)

		June 30,			June 30,
								For the Period
		2011			2010
		For the			For the			April 14, 2004
ASSETS
		year ended			year ended			(Inception) to
Current
		June 30,			June 30,			June 30,
Cash	$	343,289		$	70,230
		2012			2011			2012
Receivables		-			4,638
CASH FLOWS FROM OPERATING ACTIVITIES
Security deposits		1,676			11,376
Loss for the year	$	(7,378,816	)	$	(4,728,538	)	$	(13,755,070	)
Total Current Assets		344,965			86,244
Items not affecting cash:
Equipment (Note 3)		1,668			2,780
Amortization of equipment		1,715			1,112			3,383
Patents (Note 4)		1,496,448			1,573,189
Amortization of patents		1,496,448			76,741			1,611,559
Total Assets	$	1,843,081		$	1,662,213
Impairment of intangible assets		-			-			106,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Stock-based compensation		1,361,639			1,246,115			2,767,463
Current
Shares for management services		-			-			100,000
Accounts payable and accrued liabilities	$	162,417		$	382,456
Shares for consulting and management bonuses		162,400			170,000			445,032
Subscriptions received in advance		-			76,500
Interest and accretion on convertible loan		339,642			-			339,642
Line of credit (Note 5)		-			18,713
Unrealized foreign exchange loss on loans payable		306			-			306
Total Liabilities		162,417			477,669
Changes in non-cash working capital items:
Stockholders' equity
(Increase) decrease in receivables		(6,852	)		4,638			(6,852	)
Preferred stock, $0.001 par value 10,000,000 shares authorized - no shares issued and outstanding Common stock, $0.001 par value 400,000,000 shares authorized and 146,927,692 (2010 – 142,130,000) shares outstanding as of June 30, 2011 (Note 6)		146,927			142,130
Decrease (increase) in prepaid expenses		1,026			9,700			(650	)
Commitment to issue shares (Note 6)		60,000			112,632
Increase (decrease) in accounts payable and accrued liabilities		1,052,582			(220,039	)		1,223,999
Additional paid in capital (Note 6)		8,221,991			2,577,498
Net cash used in operating activities		(2,969,910	)		(3,440,271	)		(7,165,188	)
Accumulated deficit during development stage		(6,748,254	)		(1,647,716	)
CASH FLOWS FROM INVESTING ACTIVITIES
Total Stockholders' Equity		1,680,664			1,184,544
Equipment		(3,620	)		-			(6,956	)
Total Liabilities and Stockholders' Equity	$	1,843,081		$	1,662,213
Purchase of technology rights		-			-			(15,000	)
Purchase of intangible assets		-			-			(100,000	)
Net cash used in investing activities		(3,620	)		-			(121,956	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit and loans payable		354,868			-			398,581
Proceeds from issuance of common stock		2,131,610			3,973,060			7,033,670
Proceeds from exercise of warrants		-			3,720			3,720
Share issuance costs		(21,805	)		(228,737	)		(254,682	)
Refunds to nonqualified investors		-			(16,000	)		(16,000	)
Subscriptions received in advance		195,000			-			195,000
Cash used to pay line of credit and loans payable		-			(18,713	)		(43,713	)
Net cash provided by financing activities		2,659,673			3,713,330			7,316,576
Change in cash during the year		(313,857	)		273,059			29,432
Cash, beginning of year		343,289			70,230			-
Cash, end of year	$	29,432		$	343,289		$	29,432
Supplemental disclosures with respect to cash flows (Note 8)

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

F-5

QUANTUM SOLAR POWER CORP. (A Development Stage Company) ~~STATEMENTS~~NOTES OFTO ~~OPERATIONS~~THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2012

											For the
1.	NATURE AND CONTINUANCE OF OPERATIONS
											Period From April
	Quantum Solar Power Corp. (the “Company”) was incorporated in Nevada on April 14, 2004. The Company is a development stage company engaged in the business of developing and commercializing next generation solar power technology under the name Next Generation Device™ abbreviated NGD™. Quantum’s NGD™ is a patent pending, functioning, laboratory model that demonstrates its utility in solar power conversion.
		For the Year			For the Year			For the Year			14, 2004 (Inception)
	The Company operates in one reportable segment being the research and development of solar power technology in Canada and the United States of America. Revenues will be substantially derived from royalty based licensing arrangements in this reporting segment.
		Ended June 30,			Ended June 30,			Ended June 30,			to June 30,
	Going concern
		2011			2010			2009			2011
	These consolidated financial statements have been prepared consistent with accounting policies generally accepted in the United States (“U.S. GAAP”) assuming the Company will continue as a going concern. Currently, the Company has no sales and has incurred a loss of $7,378,816 for the year ended June 30, 2012 and an accumulated loss of $13,755,070 for the period from April 14, 2004 (inception) to June 30, 2012. The Company has also experienced the following:
OPERATING EXPENSES
	Suspension of research agreement
Amortization of equipment	$	1,112		$	556		$	-		$	1,668
	On May 23, 2012, Canadian Integrated Optics (BC) Ltd. (“CIO-BC”), a company that conducts research and development activities on behalf of the Company, entered into an amendment agreement (the “Amended Research Agreement”) to the research agreement (the “CIO-BC Research Agreement”) with Simon Fraser University (“SFU”). The Amended Research Agreement was dated effective April 15, 2012. Under the terms of the Agreement, CIO-BC issued SFU a promissory note (the “Promissory Note”) in the amount of CAD$452,749 in respect of previous research activities conducted on the Company’s behalf. To secure payment under the Amended Research Agreement, the Company has agreed to provide a secured guarantee to SFU of the Promissory Note, charging, in favor of SFU, certain research equipment (Note 3).
Amortization of patents		76,741			38,370			-			115,111
	The Company has not had enough cash to make payments to CIO-BC for ongoing research and development costs. As a result, CIO-BC has fallen behind with its payments under the Amended Research Agreement and the CIO-BC Research Agreement has been suspended by SFU. SFU has made a demand for payment on the outstanding balances. There are no assurances that a new agreement with SFU will be reached, that SFU will allow the Company to continue to use their facilities to conduct the Company’s research and development activities. The Company will require financing to repay the debt owed on the Promissory Note and conduct further research and development activities. There is no assurance that the Company will be able to secure financing on acceptable terms or at all.
General and administrative		539,105			269,693			28,747			989,551
	Default on convertible loan agreement
Professional fees		543,419			209,397			-			752,816
	On April 23, 2012, the Company secured an aggregate of CAD$475,000 in debt financing from Foundation Freehold Ltd. (“Foundation”) (Note 6) of which CAD$343,000 was advanced before the Company’s fiscal year ended June 31, 2012 and the remaining CAD$132,000 was advanced subsequent to the Company’s fiscal year end. The Loan became in default due to failure to pay interest that was due on September 30, 2012. Subsequent to June 30, 2012 the Company received a notice of default and is in discussions with Foundation to settle the indebtedness of which there is no assurance.
Research and development		2,322,046			683,238			-			3,005,284
	These conditions indicate the existence of a material uncertainty that cast a substantial doubt about the Company’s ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing, resume research activities and protect its proprietary process upon future profitable operations from development and commercialization of an NGD™.
Stock-based compensation (Note 6)		1,246,115			159,709			-			1,405,824
		(4,728,538	)		(1,360,963	)		(28,747	)		(6,270,254	)
OTHER ITEM
Impairment of intangible assets		-			-			-			(106,000	)
Loss and comprehensive loss for the year	$	(4,728,538	)	$	(1,360,963	)	$	(28,747	)	$	(6,376,254	)
Basic and diluted loss per common share	$	(0.03	)	$	(0.01	)	$	(0.00	)
Weighted average number of common shares outstanding		145,252,662			103,385,258			117,300,000

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

F-6

QUANTUM SOLAR POWER CORP. (A Development Stage Company) ~~STATEMENTS~~NOTES OFTO ~~STOCKHOLDERS’~~THE ~~EQUITY~~CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2012

		Common Stock
1.	NATURE AND CONTINUANCE OF OPERATIONS (cont’d)
								Additional			Commitment			Accumulated			Total
	Going concern (cont’d)
								Paid in			to Issue			Deficit During			Stockholders'
	Management is in the process of obtaining additional financing, which may involve debt or equity offerings, and negotiating an agreement to continue conducting research. If the Company is unable to complete its financing requirements or achieve revenue as projected, it will then modify its expenditures and plan of operations to coincide with the actual financing completed. There are no assurances, however, with respect to the future success of these plans.
		Shares			Amount			Capital			Shares			the Dev. Stage			Equity
	The accompanying consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the coming year.
Balance, April 14, 2004 (Inception)		-		$	-		$			$	-		$	-		$	-
2.	SIGNIFICANT ACCOUNTING POLICIES
Common shares issued at par		117,200,000			15			92,485			-			-			92,500
	Basis of presentation and consolidation
Net loss		-			-			-			-			(9,557	)		(9,557	)
	The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and are expressed in U.S. dollars. The consolidated financial statements have been prepared under the guidelines of Accounting and Reporting by Development Stage Enterprises. A development stage enterprise is one in which planned principal operations have not commenced, or if its operations have commenced, there have been no significant revenues therefrom. As of June 30, 2012, the Company had not commenced its planned principal operations.
Balance, June 30, 2004		117,200,000			15			92,485			-			(9,557	)		82,943
	These consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary, 0935493 BC Ltd. (incorporated in British Columbia, Canada on April 10, 2012). All significant inter-company balances and transactions have been eliminated upon consolidation.
Net loss		-			-			-			-			(40,111	)		(40,111	)
	Use of estimates
Balance, June 30, 2005		117,200,000			15			92,485			-			(49,668	)		42,832
	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounts that require estimates relate to the valuation of deferred tax assets, stock-based compensation, the estimated useful life of equipment, and the valuation of shares issued for technology, bonuses and services.
Net loss		-			-			-			-			(26,654	)		(26,654	)
	Start-up expenses
Balance, June 30, 2006		117,200,000			15			92,485			-			(76,322	)		16,178
	The Company has adopted Standard of Position (“SOP”) No.98-5 “Reporting the Costs of Start-up Activities,” which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s general and administrative expenses for the period from inception on April 14, 2004 to June 30, 2012.
Net loss		-			-			-			-			(15,652	)		(15,652	)
Balance, June 30, 2007		117,200,000			15			92,485			-			(91,974	)		526
Common shares issued at $2.00 per share		100,000			100			199,900			-			-			200,000
Net loss		-			-			-			-			(166,032	)		(166,032	)
Balance, June 30, 2008		117,300,000			115			292,385			-			(258,006	)		34,494
Net loss		-			-			-			-			(28,747	)		(28,747	)
Balance, June 30, 2009		117,300,000			115			292,385			-			(286,753	)		5,747
Private placement		280,000			280			559,720			-			-			560,000
Share issuance costs		-			-			(4,140	)		-			-			(4,140	)
Stock-based compensation		-			-			159,709			-			-			159,709
Commitment to issue shares		-			-			-			112,632			-			112,632
Acquisition of patents		71,500,000			71,500			1,540,059			-			-			1,611,559
Shares issued for services		50,000			50			99,950			-			-			100,000
Par value reclassification		-			117,185			(117,185	)		-			-			-
Return to treasury		(47,000,000	)		(47,000	)		47,000			-			-			-
Net loss		-						-			-			(1,360,963	)		(1,360,963	)
Balance, June 30, 2010		142,130,000			142,130			2,577,498			112,632			(1,647,716	)		1,184,544
Dividend-warrants		-			-			372,000			-			(372,000	)		-
Private placement		4,049,560			4,049			4,045,511			-			-			4,049,560
Return to nonqualified investors		(8,000	)		(8	)		(15,992	)		-			-			(16,000	)
Exercise of warrants		372,000			372			3,348			-			-			3,720
Share issued as finder’s fees		161,500			161			161,339			-			-			161,500
Share issuance costs		-			-			(390,237	)		-			-			(390,237	)
Stock-based compensation		-			-			1,246,115			-			-			1,246,115
Shares issued for services		222,632			223			222,409			(112,632	)		-			110,000
Commitment to issue shares		-			-			-			60,000			-			60,000
Net loss		-			-			-			-			(4,728,538	)		(4,728,538	)
Balance, June 30, 2011		146,927,692		$	146,927		$	8,221,991		$	60,000		$	(6,748,254	)	$	1,680,664

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

F-7

QUANTUM SOLAR POWER CORP. (A Development Stage Company) ~~STATEMENTS~~NOTES OFTO ~~CASH~~THE ~~FLOWS~~CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2012

											For the Period
2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
		For the			For the			For the			April 14, 2004
	Foreign currency translations
		Year Ended			Year Ended			Year Ended			(Inception) to
	The Company and its wholly own subsidiary’s functional currency is the United States dollar. There are significant transactions in Canadian dollars; these are recorded in US dollars using the exchange rates in effect on the date the transaction is recorded. The Company used the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission. Assets and liabilities that are denominated in a foreign currency are translated at the exchange rate in effect at the year end and capital accounts are translated at historical rates. Statement of operation accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments from the use of different exchange rates from period to period are included in the comprehensive income statement account in stockholder’s equity, if applicable. There were no translation adjustments as of June 30, 2012.
		June 30, 2011			June 30, 2010			June 30, 2009			June 30, 2011
	Loss per share and potentially dilutive securities
CASH FLOWS FROM OPERATING ACTIVITIES
	Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. The effect of 7,200,000 outstanding options and 688,050 outstanding warrants were not included in the computation of diluted earnings per share because it was anti-dilutive due to the Company’s losses.
Loss for the year	$	(4,728,538	)	$	(1,360,963	)	$	(28,747	)	$	(6,376,254	)
	Fair value of financial instruments
Items not affecting cash:
	Financial assets
Amortization of equipment		1,112			556			-			1,668
	All financial assets are initially recorded at fair value and designated upon inception into one of the following four categories: held to maturity, available for sale, loans and receivables or at fair value through profit or loss (“FVTPL”).
Amortization of intangible assets		76,741			38,370			-			115,111
	Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through profit and loss. The Company’s cash is classified as FVTPL. Financial assets classified as loans and receivables and held to maturity assets are measured at amortized cost. The Company’s receivables are classified as loans and receivables. Financial assets classified as available for sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income and loss except for losses in value that are considered other than temporary which are recognized in earnings. At June 30, 2012, the Company has not classified any financial assets as available for sale.
Impairment of intangible assets		-			-			-			106,000
	Transaction costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.
Stock-based compensation		1,246,115			159,709			-			1,405,824
	Financial liabilities
Shares for management services		-			100,000			-			100,000
	All financial liabilities are initially recorded at fair value and designated upon inception as FVTPL or other financial liabilities. Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives are also classified as held for trading and recognized at fair value with changes in fair value recognized in earnings unless they are designated as effective hedging instruments. Fair value changes on financial liabilities classified as FVTPL are recognized in earnings. The Company has classified the embedded derivative component of the loan payable as FVTPL.
Shares for consulting and management bonuses		170,000			112,632			-			282,632
Changes in non-cash working capital items:
Decrease (increase) in receivables		4,638			(4,638	)		-			-
Decrease (increase) in prepaid expenses		9,700			(11,376	)		-			(1,676	)
(Decrease) increase in accounts payable and accrued liabilities		(220,039	)		374,956			-			171,417
Net cash used in operating activities		(3,440,271	)		(590,754	)		(28,747	)		(4,195,278	)
CASH FLOWS FROM INVESTING ACTIVITIES
Equipment		-			(3,336	)		-			(3,336	)
Purchase of technology rights		-			-			-			(15,000	)
Purchase of intangible assets		-			-			-			(100,000	)
Net cash used in investing activities		-			(3,336	)		-			(118,336	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit and loans payable		-			43,713			-			43,713
Proceeds from issuance of common stock		3,973,060			560,000			-			4,825,560
Proceeds from exercise of warrants		3,720			-			-			3,720
Share issuance costs		(228,737	)		(4,140	)		-			(232,877	)
Refunds to nonqualified investors		(16,000	)		-			-			(16,000	)
Subscriptions received in advance		-			76,500			-			76,500
Cash used to pay line of credit and loans payable		(18,713	)		(25,000	)		-			(43,713	)
Net cash provided by financing activities		3,713,330			651,073			-			4,656,903
Change in cash during the year		273,059			56,983			(28,747	)		343,289
Cash, beginning of year		70,230			13,247			41,994			-
Cash, end of year	$	343,289		$	70,230		$	13,247		$	343,289
Supplemental disclosures with respect to cash flows (Note 7)		-			-			-			-

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

F-8

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

1.	NATURE AND CONTINUANCE OF OPERATIONS
2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
	Quantum Solar Power Corp. (the “Company”) was incorporated in Nevada on April 14, 2004. The Company is a development stage company engaged in the business of developing and commercializing next generation solar power technology under the name Next Generation Device™ abbreviated NGD™. Quantum’s NGD™ is a patent pending, functioning, laboratory model that demonstrates its utility in solar power conversion.
	Fair value of financial instruments (cont’d)
	The Company operates in one reportable segment being the research and development of solar power technology in Canada and the United States of America. Revenues will be substantially derived from royalty based licensing arrangements in this reporting segment.
	Financial liabilities (cont’d)
	Going Concern
	Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. The Company’s accounts payable and accrued liabilities and loans payable are classified as other financial liabilities.
	These financial statements have been prepared consistent with accounting policies generally accepted in the United States (“U.S. GAAP”) assuming the Company will continue as a going concern. Currently, the Company has no sales and has incurred a net loss of $4,728,538 for the year ended June 30, 2011 and an accumulated loss of $6,376,254 for the period from April 14, 2004 (inception) to June 30, 2011. The Company also relies on patents and contractual restrictions to protect intellectual property. The existing provisional and future patents could be challenged. The future of the Company is dependent upon its ability to obtain financing and protect its proprietary process upon future profitable operations from development and commercialization of an NGD™. Management has plans to seek additional capital through private placements and public offerings of its common stock. These factors raise substantial doubt that the Company will be able to continue as a going concern.
	The Company measures the fair value of financial assets and liabilities based on the guidance of Fair Value Measurements which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Effective July 1, 2008, the Company adopted the policy for financial assets and liabilities, as well as for any other assets and liabilities that are carried at fair value on a recurring basis. The adoption of the provisions of this accounting policy did not materially impact the Company’s financial position and results of operations.
	Management's plans for the continuation of the Company as a going concern include financing the Company's operations through issuance of its common stock. If the Company is unable to complete its financing requirements or achieve revenue as projected, it will then modify its expenditures and plan of operations to coincide with the actual financing completed and actual operating revenues. There are no assurances, however, with respect to the future success of these plans.
	The policy defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The policy also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value:
	The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the coming year.
2.	SIGNIFICANT ACCOUNTING POLICIES
	Basis of Presentation
	The accompanying financial statements have been prepared in accordance with U.S. GAAP and are expressed in U.S. dollars. The financial statements have been prepared under the guidelines of Accounting and Reporting by Development Stage Enterprises. A development stage enterprise is one in which planned principal operations have not commenced, or if its operations have commenced, there have been no significant revenues therefrom. As of June 30, 2011, the Company had not commenced its planned principal operations.
	Use of estimates
	The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounts that require estimates relate to the valuation of deferred tax assets, stock- based compensation, the estimated useful life of equipment, and the valuation of shares issued for technology, bonuses and services.

F-9

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2011

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
	Start-up expenses
	The Company has adopted Standard of Position (“SOP”) No.98-5 “Reporting the Costs of Start-up Activities,” which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company's formation have been included in the Company's general and administrative expenses for the period from inception on April 14, 2004 to June 30, 2011.
	Foreign currency translation
	The Company’s functional currency is the United States dollar. There are significant transactions in Canadian dollars; these are recorded in US dollars using the exchange rates in effect on the date the transaction is recorded. The Company used the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission. Assets and liabilities that are denominated in a foreign currency are translated at the exchange rate in effect at the year end and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments from the use of different exchange rates from period to period are included in the comprehensive income statement account in stockholder’s equity, if applicable. There were no translation adjustments as of June 30, 2011.
	Loss per Share and Potentially Dilutive Securities
	Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. The effect of 1,800,000 outstanding options and 50,000 outstanding warrants were not included in the computation of diluted earnings per share because it was anti-dilutive due to the Company’s losses.
	Fair value of financial instruments
	The Company measures the fair value of financial assets and liabilities based on the guidance of Fair Value Measurements which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Effective July 1, 2008, the Company adopted the policy for financial assets and liabilities, as well as for any other assets and liabilities that are carried at fair value on a recurring basis. The adoption of the provisions of this accounting policy did not materially impact the Company’s financial position and results of operations.
	The policy defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The policy also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets and liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Fair values

The fair value of receivables, accounts payable and accrued liabilities and loans payable approximate their financial statement carrying amounts due to the short-term maturities of these instruments.

The Company’s cash was measured using Level 1 inputs.

Foreign currency risk

The Company operates in Canada, which gives rise to the risk that cash flows may be adversely impacted by exchange rate fluctuations. The Company has not entered into any forward exchange contracts or other derivative instrument to hedge against foreign exchange risk.

Credit risk

Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. Management believes that the credit risk concentration with respect to financial instruments included in cash is remote. Receivables comprise mainly harmonized sales tax from the Canadian government.

F-9

QUANTUM SOLAR POWER CORP.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States Dollars)

JUNE 30, 2012

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)

	Comprehensive loss

	As of June 30, 2012 the Company has no items that represent comprehensive loss and therefore, has not included a schedule of comprehensive loss in the consolidated financial statements.

	Income taxes

	The Company accounts for income taxes under an asset and liability approach, whereby deferred income tax liabilities or assets at the end of each year are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.

	Impairment of assets

	The Company periodically reviews its long-lived assets when applicable to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the asset will be written down to fair value.

	Equipment

	Equipment is recorded at cost less accumulated amortization. Amortization is provided annually on assets placed in use on a straight-line basis over 3 years for computer equipment. Additions in the year are subject to the half year rule.

	Research and development

	All research costs are charged to operations in the year of expenditure. Development costs are capitalized if they meet the criteria for capitalization and amortized over the period of the expected life. Development costs are written off when there is no longer an expectation of future benefits.

	Stock-based compensation

	The Company uses the fair value based method of accounting for stock options granted to employees and directors and compensatory warrants issued on private placements in accordance with the recommendations of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 718, “Compensation – Stock Compensation”. Under this method, the fair value of the stock options at the date of the grant, as determined using the Black-Scholes option pricing model, is recognized to expense over the vesting period, and the fair value of compensatory warrants at the date of issuance, as determined using the Black-Scholes model, is recognized as share issuance costs, with the offsetting credit to additional paid in capital.

F-10

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d).
	Fair value of financial instruments (cont’d)
	Recent accounting pronouncements and changes in accounting policies
	Fair values
	Recent accounting pronouncements that the Company has adopted or will be required to adopt in the future are summarized below.
	The fair value of receivables, line of credit and accounts payable and accrued liabilities approximate their financial statement carrying amounts due to the short-term maturities of these instruments.
	In September 2011, the FASB issued ASU No. 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment” (“ASU 2011-08”). ASU 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Although early adoption is permitted, the Company adopted ASU 2011-08 as of January 1, 2012. Based on the Company’s evaluation of this ASU, the adoption of ASU 2011-08 did not have a material impact on the Company’s consolidated financial statements.
	In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset. The Company’s cash was measured using Level 1 inputs.
	In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210)—Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). The update requires entities to disclose information about offsetting and related arrangements of financial instruments and derivative instruments. ASU 2011-11 is effective for the Company in the first quarter of its fiscal year ending June 30, 2014 (“fiscal 2014”). The Company currently believes there will be no significant impact on its consolidated financial statements.
	Foreign currency risk
	In December 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220) – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU 2011-12 defers only those changes in Update No. 2011-05 that relate to the presentation of the reclassification adjustments. Under the amendments in Update No. 2011-05, entities are required to present reclassification adjustments and the effect of those reclassification adjustments on the face of the financial statements where net income is presented, by component of net income, and on the face of the financial statements where other comprehensive income is presented, by component of other comprehensive income. In addition, the amendments in Update No. 2011-05 require that reclassification adjustments be presented in interim financial periods. This standard is effective for annual reporting periods beginning after December 15, 2011.
	The Company operates in Canada, which gives rise to the risk that cash flows may be adversely impacted by exchange rate fluctuations. The Company has not entered into any forward exchange contracts or other derivative instrument to hedge against foreign exchange risk.
	In July 2012, the FASB issued ASU 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite- Lived Intangible Assets for Impairment” (“ASU 2012-02”). The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. Examples of intangible assets subject to the guidance include indefinite-lived trademarks, licenses, and distribution rights. The standard applies to all public, private, and not-for-profit organizations. The amendments allow an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is “more likely than not” that the asset is impaired. Under former guidance (FASB Accounting Standards Codification®, Subtopic 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill), an organization was required to test an indefinite-lived intangible asset for impairment on at least an annual basis by comparing the fair value of the asset with its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeded its fair value, an impairment loss was recognized in an amount equal to the difference. The amendments in this Update are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted.
	Credit risk
	Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. Management believes that the credit risk concentration with respect to financial instruments included in cash is remote. Receivables are due primarily from consultants and are non-interest bearing.
	Comprehensive loss
	As of June 30, 2011 the Company has no items that represent comprehensive loss and therefore, has not included a schedule of comprehensive loss in the financial statements.
	Income taxes
	The Company accounts for income taxes under an asset and liability approach, whereby deferred income tax liabilities or assets at the end of each year are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.
	Impairment of assets
	The Company periodically reviews its long-lived assets when applicable to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the asset will be written down to fair value. During the years ended June 30, 2011, 2010 and 2009, the Company determined that there was no impairment.
	Equipment
	Computer equipment is recorded at cost less accumulated amortization. Amortization is provided annually on assets placed in use on a straight-line basis over 3 years.

F-11

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
	Research and development
	All research costs are charged to operations in the year of expenditure. Development costs are capitalized if they meet the criteria for capitalization and amortized over the period of the expected life. Development costs are written off when there is no longer an expectation of future benefits.
	Stock-based compensation
	The Company uses the fair value based method of accounting for stock options granted to employees and directors and compensatory warrants issued on private placements in accordance with the recommendations of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 718, “Compensation – Stock Compensation”. Under this method, the fair value of the stock options at the date of the grant, as determined using the Black-Scholes option pricing model, is recognized to expense over the vesting period, and the fair value of compensatory warrants at the date of issuance, as determined using the Black-Scholes model, is recognized as share issuance costs, with the offsetting credit to contributed surplus.
	Recent accounting pronouncements
	Recent accounting pronouncements that the Company has adopted or will be required to adopt in the future are summarized below.
	In September 2009, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance regarding multiple-deliverable revenue arrangements. This guidance addresses how to separate deliverables and how to measure and allocate consideration to one or more units of accounting. Specifically, the guidance requires that consideration be allocated among multiple deliverables based on relative selling prices. The guidance establishes a selling price hierarchy of (1) vendor-specific objective evidence, (2) third-party evidence and (3) estimated selling price. This guidance is effective for annual periods beginning after June 15, 2010 but may be early adopted as of the beginning of an annual period. The Company adopted the standard and it has no impact on the financial statements.
	In January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about Fair Value Measurements,” which amends ASC 820, “Fair Value Measures and Disclosures.” ASU 2010-06 requires disclosure of transfers into and out of Level 1 and Level 2 fair value measurements, and also requires more detailed disclosure about the activity within Level 3 fair value measurements. The changes to the ASC as a result of this update are effective for annual and interim reporting periods beginning after December 15, 2009 (adopted July 1, 2010), except for requirements related to Level 3 disclosures, which are effective for annual and interim reporting periods beginning after December 15, 2010 (July 1, 2011 for the Company). This guidance requires new disclosures only, and had no impact on the financial statements.
	In February 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855).” This update provides amendments to Subtopic 855-10-50-4 and related guidance within U.S. GAAP to clarify that an SEC registrant is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC’s requirements. The Company has adopted this standard and it will have no impact on the financial statements.

3.	EQUIPMENT

		Year ended						Year ended
		June 30, 2012						June 30, 2011

				Accumulated		Net				Accumulated		Net
		Cost		Amortization		Book Value		Cost		Amortization		Book Value

Computer equipment	$	6,956	$	3,383	$	3,573	$	3,336	$	1,668	$	1,668

	During the year ended June 30, 2012, the Company purchased $955,383 of scientific equipment which the Company expensed to research and development due to its specialized nature. Certain items of equipment are pledged as collateral on the convertible loan payable and the research agreement with SFU (Note 1).

4.	TECHNOLOGY PURCHASE AGREEMENT

	On April 15, 2008, the Company entered into a License agreement (“The Agreement”) with CIOI, to manufacture and market CIOI’s patent pending solar technology based on a new approach for the generation of solar power. On May 7, 2008 the Agreement was subsequently amended and executed by CIOI and on May 16, 2008 the agreement was executed by the Company and is subject to certain terms and conditions. The purchase price paid in cash for the License was $100,000. These costs were later written-off and charged to operations in fiscal 2008.

	In December 2009, the Company executed an agreement with CIOI to purchase technology and associated provisional patents related to the development of certain solar technology in exchange for 71,500,000 common stock of the Company valued at $1,611,559. The intellectual property is covered by two provisional U.S. patents and one Patent Cooperation Treaty Application. Due to the suspension of the research agreement and other issues raised in Note 1, the Company has recorded an impairment and charged the balance of $1,496,448 to operations during the year ended June 30, 2012.

5.	LOAN PAYABLE

	In January 2012, the Company entered into a loan agreement in the amount of EUR 9,980 (US$12,910). The loan is non-interest bearing, unsecured and has no specific terms of repayment.

F-12

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
	Recent accounting pronouncements (cont’d)
	In July 2010, the FASB issued an Accounting Standards Update No. 2010-20, Receivables, Disclosure about the Credit Quality of Financing Receivables and Allowances for Credit Losses. The standard requires additional disclosure related to the credit quality of financing receivables, troubled debt restructurings and significant purchases or sales of financing receivables during the period. The standard requires that these disclosures and existing disclosures be presented on a disaggregated basis, similar to the manner that the entity uses to evaluate its credit losses. Disclosures of information as of the end of a reporting period are effective for interim and annual periods ending after December 15, 2010 and disclosures of activity that occurred during a reporting period are effective for interim and annual periods beginning after December 15, 2010. The Company has adopted this standard on July 1, 2010, and it will have no impact on the financial statements for the year ended June 30, 2011, due to the receivables being short-term in nature and are therefore not financing receivables.
	In April 2010, the FASB issued ASU 2010-13, Compensation - Stock Compensation (Topic 718), amending ASC 718. ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which the entity’s equity securities trade should not be classified as a liability if it otherwise qualifies as equity. ASU 2010-13 also improves GAAP by improving consistency in financial reporting by eliminating diversity in practice. ASU 2010-13 is effective for interim and annual reporting periods beginning after December 15, 2010 (July 1, 2011 for the Company). The Company is currently evaluating the impact of ASU 2010-09, but does not expect its adoption to have a material impact on the Company’s financial reporting and disclosures.
	In December 2010, the FASB issued ASU No. 2010-28—When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. This update provides amendments to Accounting Standards Codification (“ASC”) Topic 350—Intangibles, Goodwill and Other that requires an entity to perform Step 2 impairment test even if a reporting unit has zero or negative carrying amount. The first step is to identify potential impairments by comparing the estimated fair value of a reporting unit to its carrying value, including goodwill. If the carrying value of a reporting unit exceeds the estimated fair value, a second step is performed to measure the amount of impairment, if any. The second step is to determine the implied fair value of the reporting unit’s goodwill, measured in the same manner as goodwill is recognized in a business combination, and compare that amount with the carrying amount of the goodwill. If the carrying value of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. ASU No. 2010-28 is effective beginning January 1, 2011. As a result of this standard, goodwill impairments may be reported sooner than under current practice. The Company does not expect ASU No. 2010-28 to have a material impact on the financial statements.
	In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The impact of this update on the Company’s financial statements will depend on the size and nature of future business combinations.
	In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is intended to improve comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. generally accepted accounting principles and International Financial Reporting

6.	CONVERTIBLE LOAN

	In May 2012, the Company entered into a loan agreement for the principal amount of CAD$475,000 (the “Loan”). The Loan is to be advanced to the Company, subject to certain conditions, according to the following schedule:

	(i)	CAD$175,000 on April 25, 2012 (advanced);
	(ii)	CAD$18,000 on May 23, 2012 (advanced);
	(iii)	CAD$150,000 on June 25, 2012 (advanced);
	(iv)	CAD$132,000 to be advanced on July 23, 2012 (subsequently advanced).

	The loan accrues interest at 9% per annum from the date of the first advance and matures on April 23, 2015. The loan is secured by certain assets.

	At any time lender may elect to receive shares in exchange for any portion of the principal or interest outstanding on the Loan on the basis of one share for each USD $0.02 of indebtedness converted. In the event of a default, the lender may elect to receive shares on the basis of one share for each USD $0.01 of indebtedness converted (Note 1).

	On comparison of the conversion price to the fair value of the Company’s common stock at issuance, the Company recorded a beneficial conversion feature of $341,958 (CAD$343,000), representing the entire proceeds received. This amount was recorded as a discount to the convertible notes with an offset to additional paid-in capital. The discount will be amortized over the term of the convertible notes and recorded as interest expense. The convertible debt will be accreted over its term to its principal amount at maturity. During the year ended June 30, 2012, the Company recorded interest expense of $339,642 as a result of amortizing the discount due to the event of default noted below.

	As at June 30, 2012, a principal balance of $336,586 (CAD$343,000) is outstanding. Included in accounts payable and accrued liabilities is accrued interest of $3,362. Subsequent to June 30, 2012 the Company defaulted on the interest payment which was due on September 30, 2012. The Company received a notice of default and has recorded the full principal balance as a current liability as at June 30, 2012.

7.	STOCKHOLDERS’ EQUITY (DEFICIENCY)

	On May 7, 2004, the Company issued 69,200,000 of its common shares for cash of $86,500.

	On June 30, 2004, the Company issued 48,000,000 of its common shares for cash of $6,000.

	The Company completed a private placement on April 15, 2008 to issue 100,000 common shares at a price of $2.00 per share. The net proceeds received were $200,000. No commissions were paid and no registration rights have been granted.

	On December 16, 2009, the Company entered into an agreement with CIOI as amended, wherein the Company agreed to purchase all of their solar cell technology in consideration of 71,500,000 restricted shares of common stock. As part of the transaction, the Company’s President returned and cancelled 47,000,000 shares of the Company’s common stock.

	In April 2010, 50,000 shares valued at $100,000 were issued as compensation for a performance bonus to a director of the Company.

	In April 2010, the Company completed a private placement to issue 280,000 shares at a price of $2.00 per share. The net proceeds received were $560,000.

	During the year ended June 30, 2011, 10,000 shares were issued through a private placement at $1 per share for proceeds of $10,000. A total of 161,500 shares valued at $161,500 were issued as finders’ fees.

F-13

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d)
7.	STOCKHOLDERS’ EQUITY (DEFICIENCY) (cont’d)
	Recent accounting pronouncements (cont’d)
	During the year ended June 30, 2011, 274,060 shares were issued through a private placement at a stock price of $1.00 per share; net proceeds were $274,060 of which $76,500 was received during the year ended June 30, 2010. The Board granted 372,000 warrants to those shareholders who had purchased shares at $2.00 per share to allow them to purchase a matching number of shares at $0.01 in order to make them whole as a result of the change in the share sale price.
	Standards. This standard clarifies the application of existing fair value measurement requirements including (1) the application of the highest and best use valuation premise, (2) the methodology to measure the fair value of an instrument classified in a reporting entity’s shareholders’ equity, (3) disclosure requirements for quantitative information on Level 3 fair value measurements and (4) guidance on measuring the fair value of financial instruments managed within a portfolio. In addition, the standard requires additional disclosures of the sensitivity of fair value to changes in unobservable inputs for Level 3 securities. This standard is effective for interim and annual reporting periods ending on or after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements.
	During the year ended June 30, 2011, 62,632 shares were issued for consulting services and 50,000 for a management performance bonus relating to services performed.
	In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income”, which requires that comprehensive income be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard also requires entities to disclose on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net earnings. This standard no longer allows companies to present components of other comprehensive income only in the statement of equity. This standard is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a significant impact on the Company’s financial statements other than the prescribed change in presentation.
	During the year ended June 30, 2011, a further 3,765,500 shares were issued through two private placements and a total of $228,737 in share issue costs were paid. In addition, 372,000 shares were issued when the warrants described above were exercised. Net proceeds were $3,769,220, all of which were received during the year. A refund of $16,000 was paid to several investors who previously paid for 8,000 shares and were found not to be qualified.
3.	EQUIPMENT
	During the year ended June 30, 2011, 60,000 shares valued at $60,000 for consulting services and 50,000 shares valued at $50,000 for a management performance bonus relating to services provided were issued.
	During the year ended June 30, 2012, 1,974,000 shares were issued through a private placement at a stock price of $1.00 per share for net proceeds of $1,974,000. A further 400,000 units were issued through a private placement at a stock price of $0.25 per share for net proceeds of $90,000. Each unit consists of one common share and one share purchase warrant with an exercise price of $0.30 expiring February 2, 2013. The Company paid finders’ fees of $10,000 in cash.
	During the year ended June 30, 2012, 90,000 shares valued at $88,700 were issued in accordance to the terms of a consulting contract entered into during fiscal 2010, of which $60,000 was previously recorded as commitment to issue shares at June 30, 2011.
	During the year ended June 30, 2012, 250,000 shares valued at $87,500 and 250,000 shares valued at $27,500 were issued for consulting services based on a consulting agreement entered on December 1, 2011.
	During the year ended June 30, 2012, 288,050 units were issued through a private placement at a stock price of $0.20 per unit for net proceeds of $57,610. Each unit consists of one share and one share purchase warrant. Each warrant entitles the subscribers to purchase an additional common share at an exercise price of $0.25 per share, expiring on March 25, 2013.
	During the year ended June 30, 2012, the Company paid $6,723 in share issue costs in connection with the private placements.
	Commitment to issue shares
	According to the terms of a contract entered into during the year ended June 30, 2010, the Company agreed to issue 10,000 shares per month to a consultant. As at June 30, 2012, the Company has a commitment to issue 60,000 common shares at a value of $18,700 (subsequently issued).
	Subscriptions received in advance
	During the year ended June 30, 2012, the Board of Directors of the Company approved an offering of up to 5,000,000 units at a price of $0.20 per unit of which $195,000 was received. Each unit will consist of one share and one share purchase warrant, with each warrant entitling the subscriber to purchase an additional share for a three month period following the date of issuance at an exercise price of $0.25. Subsequently, the offering was amended and the Company issued 3,900,000 units at a stock price of $0.05 per unit for net proceeds of $195,000. A total of 290,000 shares were issued as finder’s fees subsequent to June 30, 2012.

		2011						2010
				Accumulated		Net				Accumulated		Net
		Cost		Amortization		Book Value		Cost		Amortization		Book Value
Computer equipment	$	3,336	$	1,668	$	1,668	$	3,336	$	556	$	2,780

4.	TECHNOLOGY PURCHASE AGREEMENT
	On April 15, 2008, the Company entered into a License agreement (“The Agreement”) with Canadian Integrated Optics International Ltd. of Douglas, Isle of Man (“CIOI”), to manufacture and market CIOI’s patent pending solar technology based on a new approach for the generation of solar power. On May 7, 2008 the Agreement was subsequently amended and executed by CIOI and on May 16, 2008 the agreement was executed by the Company and is subject to certain terms and conditions. The purchase price paid in cash for the License was $100,000. These costs were later written-off and charged to operations in fiscal 2008.
	In December 2009, the Company executed an agreement with CIOI to purchase technology and associated provisional patents related to the development of certain solar technology in exchange for 71,500,000 common stock of the Company valued at $1,611,559. The two provisional patents and the pending patent application have an estimated useful life of 21 years. The Company has recorded $115,111 in accumulated amortization as at June 30, 2011.
5.	LINE OF CREDIT
	On February 20, 2010, the Company entered into an unsecured, non-interest bearing revolving line of credit with CIOI of up to $250,000 in available financing. The Company had withdrawn $43,713 from this line of credit which was repaid in full by June 30, 2011. The line of credit has $Nil balance as at June 30, 2011.

F-14

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

6.	STOCKHOLDERS’ EQUITY
7.	STOCKHOLDERS’ EQUITY (DEFICIENCY) (cont’d)
	On May 7, 2004, the Company issued 69,200,000 of its common shares for cash of $86,500.
	Stock options and warrants
	On June 30, 2004, the Company issued 48,000,000 of its common shares for cash of $6,000.
	On February 28, 2011, the Company implemented a formal stock option plan under which it is authorized to grant options to directors, officers, employees and eligible consultants of the Company enabling them to acquire up to 14,650,000 shares of the Company. Under the plan, the exercise price of each option equals the market price of the Company’s stock, less applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years. Vesting provisions are set at the discretion of the Company. The Plan has not been approved by the Company’s stockholders.
	The Company has completed a private placement on April 15, 2008 to issue 100,000 common shares at a price of $2.00 per share. The net proceeds received were $200,000. No commissions were paid and no registration rights have been granted.
	Stock options and warrants are summarized as follows:
	On December 16, 2009, the Company entered into an agreement with CIOI as amended, wherein the Company agreed to purchase all of their solar cell technology in consideration of 71,500,000 restricted shares of common stock. As part the transaction, the Company’s President returned and cancelled 47,000,000 shares of the Company’s common stock.
	In April 2010, 50,000 shares valued at $100,000 were issued as compensation for a performance bonus to a director of the Company.
	In April 2010, the Company completed a private placement to issue 280,000 shares at a price of $2.00 per share. The net proceeds received were $560,000.
	During the year ended June 30, 2011, 274,060 shares were issued through a private placement at a stock price of $1.00 per share; net proceeds were $274,060 of which $76,500 was received during the year ended June 30, 2010. The Board granted 372,000 warrants to those shareholders who had purchased shares at $2.00 per share to allow them to purchase a matching number of shares at $0.01 in order to make them whole as a result of the change in the share sale price.
	During the year ended June 30, 2011, 62,632 shares were issued for consulting services and 50,000 for a management performance bonus relating to services performed.
	During the year ended June 30, 2011, a further 3,765,500 shares were issued through two private placements and a total of $228,737 in share issue costs were paid. In addition, 372,000 shares were issued when the warrants described above were exercised. Net proceeds were $3,769,220, all of which were received during the year. A refund of $16,000 was paid to several investors who previously paid for 8,000 shares and were found not to be qualified.
	During the year ended June 30, 2011, 60,000 shares valued at $60,000 for consulting services and 50,000 shares valued at $50,000 for a management performance bonus relating to services provided were issued during the year.
	In February, 2011, 10,000 shares were issued through a private placement at $1 per share for proceeds of $10,000. A total of 161,500 shares valued at $161,500 were issued as finders’ fees.
	Commitment to issue shares
	According to the terms of a contract entered into during the year ended June 30, 2010, the Company agreed to issue 10,000 shares per month to a consultant. As at June 30, 2011, the Company has a commitment to issue 60,000 common shares at a value of $60,000.

	Warrants					Stock Options

				Weighted					Weighted
				Average		Number of			Average
	Number of			Exercise		Stock			Exercise
	Warrants			Price		Options			Price

Balance outstanding at June 30, 2010	-			-		500,000			0.50

Granted	372,000			0.01		-			-
Granted	50,000			1.90		-			-
Exercised	(372,000	)		(0.01	)	-			-
Granted	-			-		1,300,000			1.50

Balance outstanding at June 30, 2011	50,000			1.90		1,800,000			1.22

Expired/cancelled	(50,000	)		(1.90	)	(2,466,668	)		(1.14	)
Granted	688,050			0.28		7,866,668			0.37

Balance outstanding at June 30, 2012	688,050		$	0.28		7,200,000		$	0.22

Exercisable at June 30, 2012	688,050		$	0.28		5,404,198		$	0.22

The following table summarizes information about stock options and warrants outstanding at June 30, 2012:

	Number outstanding		Exercise Price	Expiry Date
Options	500,000	$	0.50	January 1, 2013
	250,000	$	0.165	March 1, 2014
	5,950,000	$	0.20	April 12, 2015
	500,000	$	0.20	March 6, 2016

Warrants	400,000	$	0.30	February 2, 2013
	288,050	$	0.25	March 25, 2013

Stock-based compensation

During the year ended June 30, 2012, the Company granted 7,866,668 options (2011 – 1,300,000) to employees and consultants of the Company, with a weighted average fair value of $0.23 (2011 - $0.73) per option, which are being recognized over the vesting periods of the options. The Company cancelled 1,666,668 of these options during the year ended June 30, 2012.

Total stock-based compensation for the year ended June 30, 2012 was $1,361,639 (2011 - $1,246,115).

F-15

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, ~~2011~~2012

6.	STOCKHOLDERS’ EQUITY (cont’d)
	Stock options and warrants
	On February 28, 2011, the Company implemented a formal stock option plan under which it is authorized to grant options to directors, officers, employees and eligible consultants of the Company enabling them to acquire up to 14,650,000 shares of the Company. Under the plan, the exercise price of each option equals the market price of the Company’s stock, less applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years. Vesting provisions are set at the discretion of the Company. The Plan has not been approved by the Company’s stockholders.
	Stock options and warrants are summarized as follows:

STOCKHOLDERS’ DEFICIENCY (cont’d)

Stock options and warrants (cont’d)

The Company used the Black-Scholes option pricing model to determine the fair value of options granted. The fair value of stock options has been estimated with the following assumptions:

	Warrants					Stock Options
	Year ended			Year ended
				Weighted				Weighted
	June 30,			June 30,
				Average		Number of		Average
	2012			2011
	Number of			Exercise		Stock		Exercise
Dividend yield	0.00%			0.00%
	Warrants			Price		Options		Price
Expected volatility	152.02 %			143.30%
Balance outstanding at April 14, 2004 (inception) to June 30, 2009	-		$	-		-	$	-
Risk free interest rate	1.35%			2.62%
Granted	-			-		500,000		0.50
Expected life of options	2.97 years			3.85 years
Balance outstanding at June 30, 2010	-			-		500,000		0.50
Granted	372,000			0.01		-		-
Granted	50,000			1.90		-		-
Exercised	(372,000	)		(0.01	)	-		-
Granted	-			-		1,300,000		1.50
Balance outstanding at June 30, 2011	50,000		$	1.90		1,800,000	$	1.22
Exercisable at June 30, 2011	50,000		$	1.90		1,345,832	$	1.31

~~The~~8. ~~following~~SUPPLEMENTAL ~~table~~DISCLOSURE ~~summarizes information~~WITH ~~about~~RESPECT ~~stock~~TO ~~options~~CASH ~~outstanding at June 30, 2011:~~ FLOWS

		Number of Shares		Exercise Price		Expiry Date
						For the period
Options		500,000	$	0.50		January 1, 2013
		For the		For the		from April 14,
		50,000	$	0.50		July 9, 2011*
		year ended		year ended		2004(inception)
		50,000	$	0.50		July 15, 2011*
		June 30, 2012		June 30, 2011		to June 30, 2012
		250,000	$	1.60		February 28, 2012
Cash paid for interest	$	-	$	-	$	-
		900,000	$	1.60		March 6, 2016
Cash paid for income taxes	$	-	$	-	$	-
		50,000	$	1.10		June 19, 2014
Warrants		50,000	$	1.90		January 14, 2012

*ExpiredSignificant ~~subsequent~~non-cash totransaction for the year ended June 30, ~~2011~~2012 included issuing 60,000 common shares at a value of $60,000 from commitment to issue shares to common stock and additional paid in capital.

F-16

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2011

6.	STOCKHOLDERS’ EQUITY (cont’d)
	Stock-based compensation
	The Company used the Black-Scholes option pricing model to determine the fair value of options granted.
	During fiscal 2011, the Company granted 1,300,000 options (2010 – 500,000) to directors, former directors, employees and consultants of the Company, with a weighted average fair value of $0.73 (2010 - $1.91) per option, which are being recognized over the vesting periods of the options.
	Total stock-based compensation for the year ended June 30, 2011 was $1,246,115 (2010 – $159,709).
	The fair value of stock options has been estimated with the following assumptions:

	2011	2010	2009
Dividend yield	0.00%	0.00%	-
Expected volatility	143.30%	239%	-
Risk free interest rate	2.62%	2.03%	-
Expected life of options	3.85 years	2 years	-

7. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

For the period

from April 14,

Year ended

2004 (inception)

June 30, 2011

June 30, 2010

June 30, 2009

to June 30, 2011

Cash paid for interest

Cash paid for income taxes

Significant non-cash transactions for the year ended June 30, 2011 included:

a) issuing 112,632 common shares at a value of $112,632 from commitment to issue shares to ~~share~~common ~~capital~~stock and additional paid in capital; b) granting 372,000 warrants for a ~~fair~~ value of $372,000 to various shareholders as a dividend; c) issuing 161,500 common shares at a value of $161,500 as ~~finders~~finder’s fees; ~~and~~ d) granting 170,000 common shares at a value of $170,000 for consulting services and management bonuses, of which 110,000 were issued and 60,000 are a commitment to issue shares.

~~Significant non~~F-~~cash~~16 ~~transactions for the year ended June 30, 2010 included:~~

a)QUANTUM ~~issuing~~SOLAR ~~71,500,000~~POWER ~~common~~CORP. ~~shares~~(A inDevelopment ~~the~~Stage ~~acquisition of patents at a total value of $1,611,559; b~~Company) ~~returning~~NOTES toTO ~~treasury~~THE ~~and~~CONSOLIDATED ~~cancelling~~FINANCIAL ~~47,000,000~~STATEMENTS ~~common~~(Expressed ~~shares~~in atUnited ~~par~~States ~~value of $47,000; and c~~Dollars) ~~reclassifying~~JUNE ~~additional paid in capital of $117~~30,~~185~~ ~~to capital stock to reflect par value of $0.001.~~2012

9.	RELATED PARTY TRANSACTIONS

	During the year ended June 30, 2012, the Company:

	a)	paid or accrued $126,141 (2011 - $nil) for management fees to a former director and officer of the Company, of which $41,208 (2011 - $nil) is included in accounts payable and accrued liabilities as at June 30, 2012;

	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.

10.	INCOME TAXES

	A reconciliation of current income taxes at statutory rates with the reported taxes is as follows:

		2012			2011

Loss before income taxes	$	(7,378,816	)	$	(4,728,538	)

Expected tax recovery	$	(2,582,586	)	$	(1,654,988	)
Other		964,859			427,592
Unrecognized benefits of non-capital losses		1,617,727			1,227,396

Total income taxes	$	-		$	-

Details of deferred income tax assets are as follows:

		2012			2011

Deferred tax assets
Non-capital loss carryforwards	$	3,367,832		$	1,750,105
Capital assets		471,222			-

Deferred tax liabilities
Capital assets		-			(15,532	)

		3,839,054			1,734,573
Valuation allowance		(3,839,054	)		(1,734,573	)

Net deferred tax assets	$	-		$	-

	The Company has non-capital losses of approximately $9,600,000 which may be carried forward and applied against taxable income in future years. These losses, if unutilized, will expire through to 2023. The future income tax benefits of these losses and other tax assets have not have been reflected in these consolidated financial statements and have been offset by a valuation allowance.

11.	SUSBSEQUENT EVENT

	Subsequent to June 30, 2012, the Company entered into an amendment to the convertible loan agreement, pursuant to which the lender advanced an additional CAD$25,000 in consideration for which the conversion price of the loan was reduced to one common share of the Company for each USD$0.008 of indebtedness converted.

F-17

~~QUANTUM~~ITEM ~~SOLAR~~9. ~~POWER~~CHANGES ~~CORP.~~IN (AAND ~~Development~~DISAGREEMENTS ~~Stage~~WITH ~~Company)~~ACCOUNTANTS ~~NOTES~~ON TOACCOUNTING ~~THE~~AND FINANCIAL ~~STATEMENTS (Expressed in United States Dollars) JUNE 30, 2011~~DISCLOSURE.

8.	RELATED PARTY TRANSACTIONS
	During fiscal 2011, the Company paid or accrued $2,312,977 (2010: $683,238) in research and development costs with CIOI, a former significant shareholder, of which $85,504 (2010: $325,518) is included in accrued liabilities as at June 30, 2011.
	During fiscal 2010, the Company also entered into an unsecured, non-interest bearing revolving line of credit with CIOI of which $Nil was outstanding as at June 30, 2011 (2010: $18,713).
	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.
9.	INCOME TAXES
	A reconciliation of current income taxes at statutory rates with the reported taxes is as follows:

None.

		2011			2010
Loss before income taxes	$	(4,728,538	)	$	(1,360,963	)
Expected tax recovery	$	(1,654,988	)	$	(476,337	)
Other		427,592			50,721
Unrecognized benefits of non-capital losses		1,227,396			425,616
Total income taxes	$	-		$	-

Details of future income tax assets are as follows:

		2011			2010
Future tax assets
Non-capital loss carryforwards	$	1,750,105		$	522,736
Future Tax Liabilities
Capital assets		(15,532	)		(5,177	)
		1,734,573			517,559
Valuation allowance		(1,734,573	)		(517,559	)
Net future tax assets	$	-		$	-

The Company has non-capital losses of approximately $5,000,000 which may be carried forward and applied against taxable income in future years. These losses, if unutilized, will expire through to 2021. The future income tax benefits of these losses and other tax assets have not been reflected in these financial statements and have been offset by a valuation allowance.

F-18

QUANTUM SOLAR POWER CORP. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS (Expressed in United States Dollars) JUNE 30, 2011

10.	SUBSEQUENT EVENTS
	On July 18, 2011, the Company entered into a consulting agreement with Advantag Aktiengesellschaft (“Advantag”), whereby Advantag has agreed to assist the Company with listing on the Frankfurt Stock Exchange. The Advantag Agreement will be in effect for the duration of the listing process. In consideration of Advantag’s services, the Company will pay a total of 18,000 EUR to Advantag as follows: 6,000 EUR at the time of execution, 6,000 EUR at the time the prospectus is drafted prior to its filing and 6,000 EUR following successful approval by the Federal Financial Supervisory Authority. The Company will also pay hourly rates for any consulting services not directly related to the prospectus.
	On August 5, 2011, the Company entered into a consulting agreement with Quorum Capital Corporation (“Quorum”). Under the terms of the Quorum Agreement, Quorum has agreed to provide consulting services to assist the Company in Germany. The Quorum Agreement is effective July 8, 2011 and is for a term of 6 months renewing for an additional 6 months automatically at the end of each term. In consideration of Quorum’s consulting services, the Company will pay $5,000 CDN on exercise of the agreement and $2,000 CDN per month commencing September 8, 2011. The Company will also grant 2,000,000 options to Quorum, to purchase shares at an exercise price of $1.00 USD until July 7, 2014. 333,335 of the Options are to be issued on execution and the remainder of the Options will be issued in monthly increments of 333,333 commencing August 8, 2011. The Company has agreed to pay a rate of $125 CDN per hour for any additional hours of work performed and to reimburse Quorum for approved expenses. The Company may cancel the Agreement at any time by providing 30 days’ notice.
	On August 9, 2011, the Company approved a private placement offering of up to 3,000,000 shares at a price of $1.00 per share of which $450,000 was received subsequent to June 30, 2011.
	On August 23, 2011 the Company entered into an employment agreement whereby Ms. Stella Guo will act as Vice President of Corporate Development of the Company effective September 1, 2011. Under the terms of the Agreement, Ms. Guo will receive a salary of $100,000 US per year and options to purchase 1,000,000 shares at a price of $1.00 per share until August 31, 2014, in accordance with the Company’s 2011 Stock Incentive Plan. The Employment Agreement is for a term of one year, renewable automatically for an additional year at the end of the first and, if renewed, a second year if no notice of termination has been provided.
	On August 31, 2011, the Company entered into an executive services agreement dated for reference August 8, 2011, among Team Solar BV, Steven Pleging and the Company. Under the Executive Services Agreement, Team Solar will provide the services of Mr. Pleging who will act as Chairman and Team Solar will receive 12,000 EUR each month, during the first three months and 15,000 EUR each month for each subsequent month the Executive Services Agreement is in effect. Additionally, subject to meeting certain targets, Team Solar or at its option Mr. Pleging, shall receive a bonus of 250,000 shares. The term is for a period of one year, renewing automatically. The Company may terminate the agreement if Mr. Pleging fails to achieve certain targets.

F-19

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On August 9, 2010, we dismissed Jewett, Schwartz, Wolfe & Associates (“Wolf & Associates”), as our independent public accountants. Our Board of Directors approved the dismissal of Wolf & Associates.

Wolf & Associates’ reports on our financial statements for the years ended June 30, 2009 and 2008 did not contain an adverse opinion or disclaimer of opinion, nor were they modified or qualified as to uncertainty, audit scope or accounting principles with the exception of a statement regarding the uncertainty of our ability to continue as a going concern.

There have been no disagreements during the fiscal years ended June 30, 2009 and 2008 and the subsequent interim period up to and including the date of dismissal between the Company and Wolf & Associates on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of Wolf & Associates, would have caused them to make reference to the subject matter of the disagreement in connection with Wolf & Associates’ report for the financial statements for the past year and any subsequent interim period up to and including to the date of Wolf & Associates’ dismissal.

We requested in writing that Wolf & Associates provide a letter addressed to the Securities and Exchange Commission stating whether or not they agree with the above disclosures. We received a copy of Wolf & Associates’ letter and it was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 20, 2010.

On August 9, 2010, we appointed Davidson & Company LLP, Chartered Accountants, ("Davidson") as our new independent registered public accounting firm. Our Board of Directors approved the engagement of Davidson. We elected to change accounting firms because of Davidson’s Canadian and U.S. expertise. In addition, we wanted our accounting firm to be closer to our operations in British Columbia, Canada.

We did not consult with Davidson during the fiscal years ended June 30, 2009 and 2008 and any subsequent interim period prior to their engagement regarding: (i) the application of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on our financial statements, and either a written report was provided to us or advice was provided that the newly appointed accountant concluded was an important factor in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event in response to paragraph (a)(1)(iv) of Item 304 of Regulation S-K, promulgated under the Securities Exchange Act of 1934, as amended.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, ~~2011~~2012 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended June 30, ~~2011~~2012 fairly present our financial condition, results of operations and cash flows in all material respects.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting.

Inadequate Financial Statement Closing Process: We have an inadequate financial statement closing process.

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel, (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.

Management has discussed the material weaknesses noted above with our independent registered public accounting firm. Due to the nature of these material weaknesses, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

~~Davidson~~This &Annual ~~Company~~Report ~~LLP,~~does not include an attestation report of our registered ~~independent~~ public accounting firm, ~~audited~~regarding ~~the effectiveness of our~~ internal control over financial reporting. ~~and~~Management’s ~~issued~~report awas ~~report~~not onsubject to attestation by our ~~internal~~registered public ~~control~~accounting ~~over~~firm ~~financial~~pursuant ~~reporting~~to ~~which~~the isrules ~~included~~of ~~under~~the ~~Item~~Securities 8and -Exchange Commission ~~Financial~~that ~~Statements~~permit ~~and~~us ~~Supplementary~~to ~~Data~~provide only management’s report in this ~~Annual Report~~annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, ~~2011~~2012 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

ITEM 9B. OTHER INFORMATION.

~~None~~On April 23, 2012, we secured an aggregate of $475,000 CDN in debt financing (the “Loan”) from Foundation Freehold Ltd. (“Foundation”). At any time, Foundation may elect to receive shares of our common stock in exchange for any portion of the principal or interest outstanding on the Loan on the basis of one share for each CDN $0.02 of indebtedness converted. In the event of a default, Foundation may elect to receive shares on the basis of one share for each CDN $0.01 of indebtedness converted (the “Reduced Conversion Rate”).

26On October 12, 2012, we entered into an amendment agreement (the “Amended Loan Agreement”) with Foundation. Under the terms of the Amended Loan Agreement, Foundation advanced us an additional $25,000 CDN and we reduced the Reduced Conversion Rate by 20% from $0.01 CDN to $0.008 CDN.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following tables set forth information regarding our executive officers and directors as of September 1018, ~~2011~~2012:

Name	Age	Positions
Steven Pleging	49	Chairman and Director
Andras Pattantyus-Abraham	38	Chief Executive Officer, President, Chief Technology Officer and Director
Daryl J. Ehrmantraut	59	Chief Executive Officer, President and Director
Graham R. Hughes	62	Chief Financial Officer, Secretary, Treasurer and Director
Andras Pattantyus-Abraham	37	Chief Technology Officer and Director
Daryl J. Ehrmantraut	60	Chief Operating Officer and Director
Graham R. Hughes	61	Chief Financial Officer, Secretary, Treasurer and Director
Stella Guo	39	Vice President of Corporate Development and Director

Set forth below is a brief description of the background and business experience of each of our executive officers and directors for at least the past five years.

~~Steven~~Andras ~~Pleging~~Pattantyus-Abraham ~~has~~joined ~~served~~Quantum asSolar ~~Chairman~~in December ~~and~~2009. asOn aMarch ~~Director since~~3, ~~July 22~~2010, ~~2011.~~he ~~Prior~~was toappointed ~~founding~~Chief ~~TeamSolar~~Technology BVOfficer. On July 22, Mr2011, Dr. ~~Pleging~~Pattantyus-Abraham ~~served~~was appointed as ~~CEO of~~a ~~Ecostream~~Director. ~~International~~On BVFebruary 9, ~~www.ecostream.com~~2012, ~~one~~Dr. ofPattantyus-Abraham ~~the~~was ~~leading~~appointed ~~suppliers of~~as ~~solar~~our ~~power~~President ~~systems~~and inChief Executive ~~Europe~~Officer. Prior to joining ~~Ecostream~~the company, MrDr. ~~Pleging~~Pattantyus-Abraham ~~served for~~was ~~over~~ a Principal ~~decade~~Scientist asfor ~~Business~~Sargent ~~line~~Research ~~Manager~~Group, ~~for~~Electrical ~~the~~and ~~Solar~~Computer Engineering, ~~division~~University of ~~Philips Lighting~~Toronto. ~~where~~From 2007 to 2009, he ~~managed~~was ~~the~~Postdoctoral Fellow ~~entry~~at ofSargent ~~Philips~~Research ~~into~~Group. ~~the~~In ~~solar~~2007 ~~marketplace~~and ~~with an~~2008, ~~innovative~~Dr. ~~concept~~Pattantyus-Abraham served ofas ~~solar~~a ~~inverters~~Research Consultant for ~~the~~an ~~European~~Optoelectronics ~~market~~startup and ~~extensive~~for Applied ~~partner~~Biophysics ~~collaboration~~Research Group, University of British Colombia. ~~Pledging~~From ~~received~~2004 to 2006, Dr. Pattantyus-Abraham was a ~~Bachelor~~Postdoctoral inFellow ~~Economics~~of ~~from~~Photonic ~~HES~~Nanostructures ~~Amsterdam~~Research Group, University of British Columbia.

~~Daryl~~Graham JR. ~~Ehrmantraut~~Hughes ~~was~~has ~~appointed~~served as our ~~President,~~ Chief ~~Executive~~ Financial Officer, Secretary, Treasurer and as a Director onsince ~~January~~November 427, ~~2010~~2007. Mr. ~~Ehrmantraut previously~~ ~~served~~Hughes ~~for~~is ~~5 years until January 1, 2010 as CEO of Elemetric Instruments,~~ a ~~scientific~~ ~~instrumentation~~Certified ~~company~~General ~~which~~Accountant ~~commercialized~~in ~~Los~~private ~~Alamos~~practice ~~National~~for ~~Lab patented~~over ~~element~~25 ~~detection technology,~~ years. Mr. ~~Ehrmantraut~~Hughes ~~previously~~is ~~served~~an ~~as President~~Instructor of ~~Triton~~Accountancy ~~Technology~~at athe ~~privately~~British ~~held~~Columbia ~~company~~Institute ~~in the information~~of ~~technology~~Technology ~~and~~in ~~services~~Vancouver, ~~industry from 2002 to 2003~~Canada. Mr. ~~Ehrmantraut~~Hughes served as ~~Vice~~ President ~~of Sales~~ and ~~Marketing,~~Director ~~Bfound~~of Western ~~Business~~Hemisphere ~~Unit~~Mining ~~for Signalsoft~~ Corp., ~~a company in the electrical/electronic manufacturing industry~~ from ~~1999~~ 2005 to ~~2001~~2007. He also served as ~~President~~Secretary and ofDirector ~~Osiris~~for ~~Systems Corporation,~~ a ~~privately~~number ~~held company~~of incompanies ~~the computer software industry. He also held various management positions~~ from ~~1972~~1986 to ~~1999 in the computer and electronics industry~~1991.

~~Andras~~Daryl ~~Pattantyus-Abraham~~J. ~~joined~~Ehrmantraut ~~Quantum~~was ~~Solar~~appointed ~~in December~~our ~~2009.~~President, OnChief Executive ~~March~~Officer 3,and ~~2010,~~as hea ~~was~~Director ~~appointed~~on ~~Chief~~January ~~Technology~~4, ~~Officer~~2010. On ~~July~~ 22September 21, 2011, Dr Mr. ~~Pattantyus-Abraham~~Ehrmantraut resigned from his position as President and Chief Executive Officer and was appointed as aour ~~Director~~Chief Operating Officer. ~~Prior~~Mr. toEhrmantraut ~~joining~~previously ~~the~~served ~~company~~for 5 years until January 1, ~~Dr.~~2010 ~~Pattantyus-Abraham~~as ~~was~~CEO of Elemetric Instruments, a ~~Principal~~scientific ~~Scientist~~instrumentation ~~for~~company which commercialized Los ~~Sargent~~Alamos ~~Research~~National ~~Group,~~Lab ~~Electrical~~patented ~~and~~element ~~Computer~~detection ~~Engineering~~technology, ~~University~~Mr. ofEhrmantraut ~~Toronto.~~previously ~~From~~served ~~2007~~as toPresident ~~2009,~~of heTriton ~~was~~Technology ~~Postdoctoral~~a ~~Fellow~~privately atheld ~~Sargent~~company ~~Research~~in ~~Group.~~the Ininformation ~~2007~~technology and ~~2008,~~services Drindustry from 2002 to 2003. ~~Pattantyus-Abraham~~Mr. Ehrmantraut served as aVice ~~Research~~President ~~Consultant for~~of anSales ~~Optoelectronics~~and ~~startup~~Marketing, ~~and~~Bfound Business Unit for ~~Applied~~Signalsoft ~~Biophysics~~Corp., ~~Research~~a ~~Group,~~company in the electrical/electronic manufacturing ~~University~~industry offrom ~~British~~1999 ~~Colombia~~to 2001. ~~From~~He ~~2004~~served toas ~~2006,~~President ~~Dr.~~of ~~Pattantyus-Abraham~~Osiris ~~was~~Systems Corporation, a privately held company in the computer software industry. He also ~~Postdoctoral~~held ~~Fellow~~various ofmanagement ~~Photonic~~positions ~~Nanostructures~~from ~~Research~~1972 ~~Group,~~to ~~University~~1999 ofin the computer and ~~British~~electronics ~~Columbia~~industry.

~~Graham~~On R.February ~~Hughes~~9, ~~has~~2012, ~~served~~Stephen Pleging resigned as the our President, Chief ~~Financial~~ Executive Officer, ~~Secretary,~~Chairman ~~Treasurer~~ and ~~Director~~as ~~since~~a ~~November~~Director ~~27,~~and ~~2007.~~Stella ~~Mr. Hughes~~Guo isresigned aas ~~Certified~~our ~~General~~Vice ~~Accountant~~President inof ~~private~~Corporate ~~practice~~Development ~~for~~and ~~over~~as 25a ~~years~~Director. Both Mr. ~~Hughes~~ isPleging anand ~~Instructor~~Ms. ofGuo ~~Accountancy~~resigned atin ~~the~~order ~~British~~to ~~Columbia~~assist ~~Institute~~us ~~of Technology~~ in ~~Vancouver,~~our ~~Canada.~~efforts ~~Mr.~~to ~~Hughes served as President and Director of~~reduce ~~Western~~administrative ~~Hemisphere~~costs ~~Mining Corp. from 2005~~ to ~~2007.~~increase Heour ~~also~~research ~~served as Secretary~~ and ~~Director~~development ~~for a number of companies from 1986 to 1991~~activities.

Stella Guo worked as Regional Director of BP Solar in China from March 2008 to February 2011. From March 2005 to March 2006, she was the Commercial Director of the BP Solar Xi’an Joint Venture. From March 2004 to March 2005 she was a Legal Manager for BP Legal in Southern China. Ms. Guo served as a Legal Advisor for BP in Hong Kong and Australia from 1999 to 2004. Ms. Guo obtained a Bachelor in Commercial Law at SunYat-Sen University in China and a Master in Commercial Law at the University of Melbourne in Australia. She is fluent in English, Cantonese and Mandarin.

Term of Office

Members of our board of directors are appointed to hold office until the next annual meeting of our stockholders or until his or her successor is elected and qualified, or until he or she resigns or is removed in accordance with the provisions of the Nevada Revised Statutes (the “NRS”). Our officers are appointed by our board of directors and hold office until removed by the board.

Significant Employees

We have no other significant employees.

COMMITTEES OF THE BOARD OF DIRECTORS

Audit Committee

Our audit committee currently consists of our Board of Directors. Mr. ~~Ehrmantraut~~Pattantyus-Abraham, Mr. Hughes and Mr. ~~Hughes~~Ehrmantraut are ~~both~~ also Executive Officers and therefore not independent directors.

The audit committee is responsible for:

(1)	selection and oversight of our independent accountant;
(2)	establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters;
(3)	establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters;
(4)	engaging outside advisors; and
(5)	funding for the outside auditory and any outside advisors engagement by the audit committee.

Our board of directors has adopted an Audit Committee Charter which provides appropriate guidance to Audit Committee members as to their duties.

Audit Committee Financial Expert

Graham R. Hughes, our Chief Financial Officer, Secretary and Treasurer and Director, qualifies as an audit committee financial expert.

Code of Ethics

We adopted a Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer, Corporate Controller and certain other finance executives, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, filed with the SEC on May 17, 2010. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our securities (“Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Based solely on our review of such reports received by the Company, other than as described below, we believe that, during the year ended June 30, ~~2011~~2012, all Reporting Persons complied with all Section 16(a) filing requirements applicable to them.

2823

The following persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act:

Name and Principal Position	Number of Late Insider Reports	Transactions Not Timely Reported	Known Failures to File a Required Form
Daryl J. Ehrmantraut President, Chief Executive Officer and Director	None	None	None
Andras Pattantyus-Abraham Chief Executive Officer, President Chief Technology Officer and Director	None	None	None
Graham R. Hughes Chief Financial Officer, Secretary Treasurer and Director	One	One	None
Graham R. Hughes Chief Financial Officer, Secretary, Treasurer and Director	One	One	None
Andras Pattantyus-Abraham Chief Technology Officer and Director	None	None	None
Daryl J. Ehrmantraut Chief Operating Officer and Director	None	None	None
Huitt Tracey Former Director	None	None	None
J. Eric Trygg 10% Holder	None	None	None
Robert Kramer Former Director	None	None	None
Steven Pleging Former Executive Officer and Director	One	None	None
Canadian Integrated Optics (IOM) Limited 10% Holder	None	None	One
Stella Guo Former Executive Officer and Director	None	None	None
Moatcroft Limited 10% Holder	None	None	One
Moatcroft Limited Former 10% Holder	One	One	None
Total	Three	Two	None

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by our named executive officers, as that term is defined in Item 402(cm)~~(2)~~ of Regulation S-K as of our fiscal years ended June 30, ~~2011~~2012 and ~~2010~~2011:

Name & Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non- Equity Incentive Plan Compen- sation ($)	Non- qualified Deferred Compen- sation Earnings ($)	All Other Compen- sation ($)	Total ($)
Daryl J. Ehrmantraut President, Chief Executive Officer and Director (1)	2011 2010 2009	120,000 60,000 - -	- - -	50,000 100,000 - -	319,417 159,709 - -	- - -	- - -	- - -	489,417 319,709 - -
Andras Pattantyus- Abraham Chief Executive Officer, Chief Technology Officer and Director (1)	2012 2011	- -	- -	- -	81,133 -	- -	- -	- -	81,133 -
Graham R. Hughes Chief Financial Officer, Secretary Treasurer and Director (2)	2011 2010 2009	- - -	- - -	- - -	- - -	- - -	- - -	- - -	- - -
Graham R. Hughes Chief Financial Officer, Secretary Treasurer and Director (1)	2012 2011	- - -	- - -	- - -	16,227 - -	- - -	- - -	- - -	16,227 - -
Andras Pattantyus- Abraham Chief Technology Officer and Director (2)	2011 2010 2009	- - -	- - -	- - -	- - -	- - -	- - -	- - -	- - -
Daryl J. Ehrmantraut Chief Operating Officer and Director (2)	2012 2011	120,000 120,000	- -	- 50,000	81,133 319,417	- -	- -	- -	201,133 489,417
Robert Kramer Former Director(4)	2011 2010 2009	- - -	- - -	- - -	- - -	- - -	- - -	- - -	- - -

2924

Huitt Tracey Former Director(5)	2011 2010 2009	- - -	---	- - -	- - -	- - -	---	- - -	- - -
Steven Pleging Former Executive Officer and Director(3)	2012 2011	126,141 -	- -	- -	- -	- -	--	- -	126,141 -
Desmond Ross Former President, Former Chief Executive Officer and Former Director (3)	2011 2010 2009	- - -	---	- - -	- - -	- - -	---	- - -	- - -
Stella Guo Former Executive Officer and Director(4)	2012 2011	41,616 -	- -	- -	- -	- -	--	- -	41,616 -

Notes:

(1)	~~Daryl~~We J.do ~~Ehrmantraut~~not ~~was~~currently ~~appointed~~have asa ~~our~~compensation ~~CEO~~arrangement ~~and~~with ~~President~~Dr. ~~and~~Pattantyus-Abraham aor ~~Director~~Graham ~~on January 4, 2010~~R. MrHughes. ~~Ehrmantraut~~We ~~will~~issued ~~receive~~stock ~~compensation~~options ~~of $10,000 per month in addition~~ to ~~bonus~~Dr. Pattantyus-Abraham and ~~equity~~Mr. ~~compensation~~Hughes asduring ~~deemed~~the ~~proper~~fiscal byyear ~~the~~ended ~~Board~~June of30, ~~Directors~~2012.
(2)	WeMr. doEhrmantraut ~~not~~will ~~currently~~receive ~~have a~~ compensation ~~arrangement~~of ~~with~~$10,000 ~~Dr.~~per ~~Pattantyus-Abraham~~month orin ~~Graham~~addition R.to ~~Hughes.~~bonus Weand ~~have~~equity ~~not paid any~~ compensation toas ~~these~~deemed ~~officers~~proper ~~during~~by the ~~fiscal~~Board ~~years~~of ~~ended June 30, 2011 and 2010~~Directors.
(3)	~~Desmond~~Mr. ~~Ross~~Pleging resigned as aan ~~director~~Executive Officer and ~~executive~~Director ~~officer~~ on ~~January~~February 49, ~~2010.~~2012
(4)	MrMs. ~~Kramer~~Guo resigned as aan Executive Officer and Director on ~~July~~February 159, ~~2011~~2012
(5)	Mr. Tracey resigned as a Director on July 16, 2011

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information concerning unexercised options for each of our named executive officers, as that term is defined in ~~Item~~ Item 402(fm)(2) of Regulation S-K, as of our fiscal year ended June 30, ~~2011~~2012:

OPTION AWARDS						STOCK AWARDS
Name and Principal Position	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date
Name and Principal Position	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock that have not Vested	Market Value of Shares or Units of Stock that have not Vested	Equity Incentive Plan Awards: Number of Unearned Shares, or Units or Other Rights that have not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, or Units or Other Rights that have not Vested (#)
Andras Pattantyus- Abraham, President CEO, CTO & Director	750,002	499,998	--	$0.20	04/12/2015
Daryl J. Ehrmantraut, President, CEO & Director	250,000	250,000	--	$0.50	01/13/2013	-	-	-	-
Graham R. Hughes, CFO, Secretary Treasurer & Director	250,000	--	--	$0.20	04/12/2015
Graham R. Hughes, CFO, Secretary Treasurer & Director	--	--	-	-	--	-	-	-	-
Daryl J. Ehrmantraut, COO & Director (1)	416,667 937,502	83,333 312,498	--	$0.50 $0.20	01/13/2013 04/12/2015
Andras Pattantyus- Abraham, CTO & Director	--	--	-	-	--	-	-	-	-

Note:

(1)	Pursuant to the terms of Mr. Ehrmantraut’s employment agreement, he is to receive 500,000 stock options vesting over twelve fiscal quarters commencing January 1, 2010.

Compensation Discussion and Analysis

We seek to provide a level of compensation for our executive officers that is competitive with publicly-traded companies similar in both size and industry. We hope to attract, retain, and reward executive officers who contribute to our success, to align executive officer compensation with our performance, and to motivate executive officers to achieve our business objectives. We compensate our senior management through a mix of base salary, bonus and equity compensation.

Our Board of Directors determines the compensation of our executive officers. The Board also administers any stock option issuances. The Board reviews base salary levels for our executive officers at the end of each fiscal year and recommends raises and bonuses based upon our achievements, individual performance, and competitive and market conditions. The Board may delegate certain of its responsibilities, as it deems appropriate, to committees or to our officers, but it has not elected to do so. The Board has engaged management consultants to provide a market analysis of cash, equity and short term incentives for comparisons to our current compensation package and based on that analysis provide recommendations of compensation adjustments and overall compensation philosophy to the Board of Directors.

Compensation Committee

We do not have a standing compensation committee. Our entire Board of Directors participates in the consideration of executive officer and director compensation. Because of the small size of the Company, we feel it is prohibitive to develop a formal compensation committee at this time. We have relied on the fiduciary duties of our Directors in determining what levels of compensation are in the best interests of the Company.

Employment Agreements

On January 1, 2010, we entered into aan ~~CEO~~ employment agreement with Daryl J. Ehrmantraut (the “~~CEO~~ Employment Agreement”). Under the terms of ~~the~~ the agreement, Mr. Ehrmantraut is paid an annual salary of $120,000. In addition to to Mr. Ehrmantraut’s base salary, he is eligible to receive a bonus for each calendar quarter in an amount, if any, as determined by our Board of Directors at its discretion. Mr. Ehrmantraut received 500,000 options to purchase shares of our common stock vested quarterly over a three -year period commencing on the execution date of the ~~CEO~~ Employment Agreement. The ~~Option~~option exercise price is $0.50 and they expire January 13, 2013. Under the terms of the ~~CEO~~ Employment Agreement, Mr. Ehrmantraut is required to devote the substantial portion of his entire business time, attention and energy exclusively to the business and affairs of the Company.

On25 August 23, 2011, we entered into an employment agreement with Stella Guo (the “Employment Agreement”) dated effective September 1, 2011. Under the terms of the agreement, Ms. Guo is paid an annual salary of $100,000. Ms. Guo received 1,000,000 options to purchase shares of our common stock vested quarterly over a three year period commencing on the effective date of the Employment Agreement. The Option exercise price is $1.00 and they expire August 31, 2014. Under the terms of the Employment Agreement, Ms. Guo is required to devote the substantial portion of her entire business time, attention and energy to the business and affairs of the Company.

On August 3123, 2011, we entered into an ~~Executive~~employment ~~Services~~agreement ~~Agreement~~ with ~~Team~~Stella ~~Solar~~Guo BV (~~“TSBV”) and Steven Pleging (~~the “~~Executive Services~~Employment Agreement”) dated ~~for~~effective ~~reference~~September ~~August 8~~1, 2011. ~~Under the terms of the~~ ~~agreement,~~The ~~TSBV~~Employment ~~shall receive 36,000 EUR during the first three months and 135,000 EUR during the remaining nine months. Subject to certain conditions of the Executive Services~~ Agreement, ~~TSBV~~was atterminated ~~its~~following ~~option Mr~~Ms. ~~Pleging~~Guo’s ~~could receive up to 500,000 shares of our common stock and Mr~~resignation. Pleging could receive options to purchase 1,500,000 shares of our common stock at a price determined by our Board of Directors. Mr. Pleging is required to devote a substantial portion of his entire business time, attention and energy to the business and affairs of the Company.

On August 31, 2011, we entered into an Executive Services Agreement with Team Solar BV (“TSBV”) and Steven Pleging (the “Executive Services Agreement”) dated for reference August 8, 2011. The Executive Services agreement was terminated following Mr. Pleging’s resignation.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of August 31, ~~2011~~2012 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers, and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Common Stock⁽¹⁾
DIRECTORS AND OFFICERS
Common Stock	Andras Pattantyus-Abraham President, Chief Executive Officer, Chief Technology Officer and Director	1,083,334⁽²⁾ (Direct)	*
Common Stock	Graham R. Hughes Chief Financial Officer, Secretary, Treasurer, Director	1,250,000⁽³⁾ (Direct)	*
Common Stock	Daryl J. Ehrmantraut Chief Operating Officer, Director	1,754,168⁽⁴⁾ (Direct)	1.1%
Common Stock	All Officers and Directors as a Group (3 persons)	4,087,502^(2)(3)(4) (Direct)	2.6%
5% STOCKHOLDERS
Common Stock	J. Eric Trygg PO Box 200 Milner, BC V0X 1T0	26,250,000⁽⁵⁾ (Direct and Indirect)	14.5%
Common Stock	Moatcroft Limited 8 St George's Street Douglas, Isle of Man IM1 1AH	11,006,320 (Direct)	7.1%
Common Stock	Mellinda-Mae Harlingten 1275 Hamilton Street Vancouver, BC V6B 1E2	10,000,000 (Direct)	6.5%

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Common Stock(1)
DIRECTORS AND OFFICERS
Common Stock	Daryl J. Ehrmantraut President, Chief Executive Officer, Director	400,000(2) (Direct)	*
Common Stock	Graham R. Hughes Chief Financial Officer, Secretary, Treasurer, Director	1,000,000 (Direct)	*
Common Stock	Andras Pattantyus-Abraham Chief Technology Officer and Director	Nil	Nil
Common Stock	Steven Pleging Chairman and Director	Nil	Nil
Common Stock	Stella Guo Vice President of Corporate Development and Director	83,333(3)	*
Common Stock	All Officers and Directors as a Group (5 persons)	1,483,333(2) (Direct)	1.0%
5% STOCKHOLDERS
Common Stock	Moatcroft Limited 8 St George's Street Douglas, Isle of Man IM1 1AH	31,000,000 (Direct)	21.1%
Common Stock	Scarlet Harlingten L402, 1550 Coal Harbour Quay Vancouver, BC V6G 3G1	10,141,800 (Direct)	6.9%
Common Stock	Mellinda-Mae Harlingten 1275 Hamilton Street Vancouver, BC V6B 1E2	10,000,000 (Direct)	6.8%

Note:
* Less than 1%

(1)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of our Common Stock actually outstanding on the date of this Annual Report. As at August 23, 2011, we had 146,987,692, shares of our Common Stock issued and outstanding.

(2)

Mr. Ehrmantraut holds 150,000 shares of our Common Stock and has a vested option to acquire 250,000 shares of our Common Stock at a price of $0.50 per share until January 13, 2013.

(1)	Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of our common stock actually outstanding on the date of this Annual Report. As at September 18, 2012, we had 154,429,742, shares of our common stock issued and outstanding.

(2)	The number of shares beneficially held by Mr. Pattantyus-Abraham consists of an option to purchase 1,250,000 shares of our common stock at a price of $0.20 per share until April 12, 2015 of which 1,083,334 have vested or vest within 60 days of September 18, 2012.

(3)	The number of shares beneficially held by Mr. Hughes consists of: (i) 1,000,000 shares of our common stock; and (ii) a vested option to acquire 250,000 shares of our common stock at a price of $0.20 per share until April 12, 2015

(4)	The number of shares beneficially held by Mr. Ehrmantraut consists of: (i) 150,000 shares of our common stock; (ii)a option to purchase 500,000 shares of our common stock at a price of $0.50 per share until January 13, 2013 of which 458,334 have vested or vest within 60 days of September 18, 2012; and (iii) an option to purchase 1,250,000 shares at a price of $0.20 per share until April 12, 2015 of which 1,145,834 have vested or vest within 60 days of September 18, 2012.

(5)	The number of shares beneficially held by Mr. Trygg consists of (i) 2,000,000 shares of our Common Stock held directly; and (ii) an option to convert $475,000 CDN in indebtedness into shares of our Common Stock at a rate of $0.02 CDN per share held by Foundation Freehold Ltd. a company controlled by Mr. Trygg.

(3) Ms. Guo has a vested option to acquire 83,333 shares of our Common Stock at a price of $1.00 per share until August 31, 2014.

CHANGE IN CONTROL

We are not aware of any arrangement that might result in a change of control.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as at June 30, ~~2011~~2012.

EQUITY COMPENSATION PLAN INFORMATION AS AT JUNE 30, 2011
EQUITY COMPENSATION PLAN INFORMATION AS AT JUNE 30, 2012
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity Compensation Plans approved by security holders	Nil	N/A	Nil
Equity Compensation Plans not approved by security holders	~~950~~6,700,000	$10.5720	137,~~700~~950,000
Total	~~950~~6,700,000	$10.5720	137,~~700~~950,000

Mr. Ehrmantraut was granted 500,000 stock options under his employment agreement dated January 1, 2010. These options were granted ~~prior to~~before the adoption of our 2011 Stock Option Plan.

~~Subsequent~~27 ~~to the year end Stella Guo was granted 1,000,000 stock options with an exercise price of $1.00 per share.~~

2011 Stock Option Plan

On February 28, 2011, our Board of Directors adopted the 2011 Stock Incentive Plan (the "2011 Plan"). The purpose of the 2011 Plan is to enhance the long-term stockholder value of the Company by offering opportunities to our directors, officers, employees and eligible consultants ~~of the Company~~ (“Participants”) to acquire and maintain stock ownership in ~~the Company in~~ order to give these persons the opportunity to participate in ~~the~~our ~~Company's~~ growth and success, and to encourage them to remain in the service of the Company.

The 2011 Plan allows ~~the~~us ~~Company~~ to grant options to ~~its~~ our officers, directors and employees. In addition, ~~the~~we ~~Company~~ may grant options to individuals who act as ~~consultants~~our ~~to the Company~~consultants, so long as those consultants do not provide services connected to the offer or sale ofour ~~the Company’s~~ securities in capital raising transactions and do not directly or indirectly promote or maintain a market for ~~the Company’s~~ our securities.

A total of 14,650,000 shares of ~~the~~our ~~Company’s~~ common stock are ~~available~~ available for issuance under the Plan.

The Plan provides for the grant of incentive stock options and non-qualified stock options. Incentive stock options granted under the Plan are those intended to qualify as “incentive stock options” as defined under Section 422 of the Internal Revenue Code. However, in order to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code, the Plan must be approved by our stockholders of within 12 months of its adoption. The Plan has not been approved by our stockholders. Non-qualified stock options granted under the Plan are option grants that do not qualify as incentive stock options under Section 422 of the Internal Revenue Code.

~~Section~~None ~~422~~ of the ~~Internal~~following ~~Revenue~~parties ~~Code. However~~has, induring ~~order to qualify as “incentive stock options” under Section 422 of~~ the ~~Internal~~past ~~Revenue~~two fiscal ~~Code~~years, ~~the~~had ~~Plan~~any ~~must~~material beinterest, ~~approved~~direct byor ~~the~~indirect, ~~stockholders~~in ofany ~~the~~transaction ~~Company~~with ~~within 12~~us ~~months~~or ofin ~~its~~any ~~adoption.~~presently ~~The~~proposed ~~Plan~~transaction that has ~~not~~or ~~been~~will ~~approved~~materially byaffect ~~the Company’s~~us, ~~stockholders.~~other ~~Non-qualified~~than ~~stock options granted under the Plan are option grants that do not qualify~~ as ~~incentive~~noted ~~stock~~in ~~options~~this ~~under Section 422 of the Internal Revenue Code.~~ section:

~~ITEM~~(i) ~~13.~~Any ~~CERTAIN~~of ~~RELATIONSHIPS~~our ~~AND~~directors ~~RELATED~~or ~~TRANSACTIONS~~executive officers; (ii) Any person proposed as a nominee for election as a director; (iii) Any person who beneficially owns, ~~AND~~directly ~~DIRECTOR~~or ~~INDEPENDENCE~~indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; (iv) Any of our promoters; and (v) Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

~~None~~During of the ~~following~~year ~~parties~~ended ~~has~~June 30, ~~during~~2011, pursuant to the ~~past~~terms ~~two~~of ~~fiscal~~a ~~years~~takeover bid, ~~had~~under ~~any~~Canadian ~~material~~Securities ~~interest~~Laws, ~~direct~~Canadian orIntegrated ~~indirect~~Optics (IOM) Ltd. (“CIO”), inour ~~any~~largest ~~transaction~~shareholder, ~~with~~has ustransferred over 99% of its or71,500,000 inshares ~~any~~of ~~presently~~our ~~proposed~~common ~~transaction~~stock ~~that~~to ~~has~~47 ordifferent ~~will~~shareholders. ~~materially~~As ~~affect~~a usresult of the transaction, CIO no longer holds a significant amount of our common ~~other~~shares. ~~than~~During asthe ~~noted~~year ended June 30, 2012, we paid or accrued $2,514,738 in research ~~this~~and ~~section:~~development costs to CIO.

~~(i)~~Director ~~Any~~Independence of our directors or executive officers; (ii) Any person proposed as a nominee for election as a director; (iii) Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; (iv) Any of our promoters; and (v) Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons.

~~Pursuant~~Our tocommon ~~the~~stock ~~terms~~is ofquoted aon ~~takeover~~the ~~bid,~~OTC ~~under~~Bulletin ~~Canadian~~Board ~~Securities~~inter-dealer ~~Laws~~quotation system, ~~Canadian~~which ~~Integrated~~does ~~Optics~~not ~~(IOM)~~have ~~Ltd~~director independence requirements. Under NASDAQ Rule 5605(~~“CIO”~~a)(2), ~~our~~a ~~largest shareholder,~~director ~~has~~is ~~transferred~~not ~~over~~considered ~~99%~~to ofbe independent ~~its~~if ~~71,500,000~~he ~~shares~~or ofshe ~~our~~is ~~common stock~~also toan 47executive ~~different~~officer ~~shareholders.~~or Asemployee aof ~~result~~the corporation. All of ~~the~~our ~~transaction,~~directors ~~CIO~~are noconsidered executive officers under Rule ~~longer~~3b-7 ~~holds~~of athe ~~significant~~Exchange ~~amount~~Act. Therefore, none of our ~~common~~directors ~~shares~~are independent.

WeAs ~~still~~a ~~contract~~result ~~with~~of ~~CIO~~our tolimited ~~perform~~operating history and minimal resources, our ~~Research~~management ~~and~~believes that it will have difficulty in attracting ~~Development~~independent ~~activities~~directors. atIn ~~Simon~~addition, ~~Fraser~~we ~~University~~would likely be required to obtain directors and officers insurance coverage in ~~British~~order ~~Columbia~~to attract and retain independent directors. Our management believes that the costs associated with maintaining such insurance is prohibitive at this time.

~~Director~~28 ~~Independence~~

Our common stock is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. Under NASDAQ Rule 5605(a)(2), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. All of our directors are considered executive officers under Rule 3b-7 of the Exchange Act. Therefore, none of our directors are independent.

As a result of our limited operating history and minimal resources, our management believes that it will have difficulty in attracting independent directors. In addition, we would likely be required to obtain directors and officers insurance coverage in order to attract and retain independent directors. Our management believes that the costs associated with maintaining such insurance is prohibitive at this time.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees

The aggregate fees billed for the two most recently completed fiscal years ended June 30, ~~2011~~2012 and June 30, ~~2010~~2011 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included our Quarterly Reports on Form 10-Q or Form 10-QSB and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended June 30, 2011	Year Ended June 30, 2010
	Year Ended June 30, 2012	Year Ended June 30, 2011
Audit Fees	$9068,~~000~~500	$6090,000
Audit Related Fees	-	~~$12,500~~-
Tax Fees	-	-
All Other Fees	-	-
Total	$68,500	$90,000

3429

Tax Fees	-	-
All Other Fees	-	-
Total	$90,000	$72,500

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit and permissible non-audit services to be performed by our independent auditors during the fiscal year. Non-audit services that are prohibited to be provided by our independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, our Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.

No services related to Audit-Related Fees, Tax Fees or All Other Fees described above were approved by the Audit Committee pursuant to the waiver of pre-approval provisions set forth in the applicable rules of the SEC.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are either provided with this Annual Report on Form 10-K or are incorporated herein by reference.

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

Exhibit
Number	Description of Exhibits
3.1	Articles of Incorporation.⁽¹⁾
3.2	Certificate of Change Pursuant to NRS 78.209 increasing the issued and authorized capital of common stock to 350,000,000 shares, par value $0.001 per share.⁽³⁾
3.3	Certificate of Change Pursuant to NRS 78.209 increasing the issued and authorized capital of common stock to 400,000,000 shares, par value $0.001 per share.⁽³⁾
3.4	Certificate of Amendment to Articles of Incorporation.⁽³⁾
3.5	Certificate of Amendment to Articles of Incorporation.⁽³⁾
3.6	Bylaws, as amended.⁽¹⁾
10.1	Technology Acquisition Agreement between Quantum and Canadian Integrated Optics (IOM) Ltd. dated December 16, 2009.⁽³⁾
10.2	CEO Employment Agreement between Quantum and Daryl J. Ehrmantraut dated January 1, 2010.⁽⁴⁾
10.3	Investor relations Consulting Services Contract between Quantum and Green Street Capital Partners, LLC dated January 6, 2010. ⁽²⁾
10.4	Office Space Lease Agreement between Quantum and Santa Fe Business Incubator, Inc. dated January 19, 2010. ⁽²⁾
10.5	Revolving Line of Credit Agreement between Quantum and Canadian Integrated Optics (IOM) Ltd. dated February 20, 2010.⁽³⁾
10.6	Consulting Agreement between Quantum and Caisey Harlingten dated April 19, 2010. ⁽⁴⁾
10.7	Office Space Lease Agreement between Quantum and Santa Fe Business Incubator, Inc. dated July 27, 2010. ⁽⁴⁾
10.8	Office Space Lease Agreement between Quantum and Guinness Business Center Ltd. dated June 21, 2010 and Addendum dated August 17, 2010. ⁽⁴⁾
10.9	Finder’s Fee Agreement between Quantum and 1536476 Alberta Ltd. dated for reference August 30, 2010. ⁽⁴⁾
10.10	Investor Relations Consulting Agreement between Quantum and Teatyn Enterprises Inc. dated for reference January 15, 2011.⁽⁵⁾
10.11	2011 Stock Incentive Plan.⁽⁶⁾
10.12	Task Order Agreement between Quantum and SgurrEnergy Ltd. dated April 28, 2011.⁽⁷⁾
10.13	Investor Relations Consulting Agreement between Quantum and John Thornton dated for reference March 1, 2011⁽⁸⁾
10.14	Public Relations Agreement dated June 21, 2011 between the Company and Vorticom Inc.⁽⁹⁾
10.15	Consulting Agreement dated July 18, 2011 between the Company and Advantag Aktiengesellschaft.⁽¹⁰⁾
10.16	English translation of the Consulting Agreement dated July 18, 2011 between the Company and Advantag Aktiengesellschaft.⁽¹⁰⁾
10.17	Consulting Agreement dated for reference July 8, 2011 between the Company and Quorum Capital Corporation.⁽¹¹⁾
10.18	Executive Services Agreement dated for reference August 8, 2011 between the Company, Team Solar BV and Steven Pleging.⁽¹²⁾
10.19	Employment Agreement dated effective September 1, 2011 between the Company and Stella Guo.⁽³⁾
10.20	Release Agreement dated October 5, 2011 between the Company and Quorum Capital Corporation.⁽¹⁴⁾
10.21	Investor Relations Consulting Agreement dated December 1, 2011 between the Company and Pristine Capital Corp.⁽¹⁵⁾
10.22	Consulting Agreement dated December 1, 2011 between the Company and Mirador Consulting LLC.⁽¹⁵⁾
10.23	Loan Agreement dated April 23, 2012 between the Corporation and Foundation Freehold Ltd.⁽¹⁶⁾
10.24	Amendment No. 1 to Loan Agreement dated May 22, 2012 between the Corporation and Foundation Freehold Ltd.⁽¹⁶⁾

Exhibit
Number	Description of Exhibits
3.1	Articles of Incorporation.(1)
3.2	Certificate of Change Pursuant to NRS 78.209 increasing the issued and authorized capital of common stock to 350,000,000 shares, par value $0.001 per share.(3)
3.3	Certificate of Change Pursuant to NRS 78.209 increasing the issued and authorized capital of common stock to 400,000,000 shares, par value $0.001 per share.(3)
3.4	Certificate of Amendment to Articles of Incorporation.(3)
3.5	Certificate of Amendment to Articles of Incorporation.(3)
3.6	Bylaws, as amended.(1)
10.1	Technology Acquisition Agreement between Quantum and Canadian Integrated Optics (IOM) Ltd. dated December 16, 2009.(3)
10.2	CEO Employment Agreement between Quantum and Daryl J. Ehrmantraut dated January 1, 2010.(4)
10.3	Investor relations Consulting Services Contract between Quantum and Green Street Capital Partners, LLC dated January 6, 2010. (2)
10.4	Office Space Lease Agreement between Quantum and Santa Fe Business Incubator, Inc. dated January 19, 2010. (2)
10.5	Revolving Line of Credit Agreement between Quantum and Canadian Integrated Optics (IOM) Ltd. dated February 20, 2010.(3)
10.6	Consulting Agreement between Quantum and Caisey Harlingten dated April 19, 2010. (4)
10.7	Office Space Lease Agreement between Quantum and Santa Fe Business Incubator, Inc. dated July 27, 2010. (4)
10.8	Office Space Lease Agreement between Quantum and Guinness Business Center Ltd. dated June 21, 2010 and Addendum dated August 17, 2010. (4)
10.9	Finder’s Fee Agreement between Quantum and 1536476 Alberta Ltd. dated for reference August 30, 2010. (4)
10.10	Investor Relations Consulting Agreement between Quantum and Teatyn Enterprises Inc. dated for reference January 15, 2011.(5)
10.11	2011 Stock Incentive Plan.(6)

Exhibit
Number	Description of Exhibits
10.25	Guarantee dated April 23, 2012 between 0935493 B.C. Ltd. and Foundation Freehold Ltd.⁽¹⁶⁾
10.26	Security Agreement dated April 23, 2012 between 0935493 B.C. Ltd and Foundation Freehold Ltd.⁽¹⁶⁾
10.27	Guarantee dated May 8, 2012 between the Corporation and Simon Fraser University.⁽¹⁶⁾
10.28	Guarantee dated May 8, 2012 between the 0935493 B.C. Ltd and Simon Fraser University.⁽¹⁶⁾
10.29	Security Agreement dated May 8, 2012 between 0935493 B.C. Ltd and Simon Fraser University.⁽¹⁶⁾
10.30	Consulting Agreement dated for reference March 9, 2012 between the Corporation and Edward H. Sargent.⁽¹⁶⁾
10.31	Amendment No. 2 to Loan Agreement dated October 12, 2012 between the Corporation and Foundation Freehold Ltd.
14.1	Code of Ethics.⁽³⁾
21.1	List of Subsidiaries.
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Audit Committee Charter.⁽³⁾
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

Exhibit
(1)	Previously filed as an exhibit to our Registration Statement on Form S-1 originally filed with the SEC on September 21, 2004.
Number	Description of Exhibits
(2)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended December 31, 2009 filed with the SEC on February 17, 2010.
10.12	Task Order Agreement between Quantum and SgurrEnergy Ltd. dated April 28, 2011.(7)
(3)	Previously filed as an exhibit to our Quarterly Report of Form 10-Q for the period ended March 31, 2010 filed with the SEC on May 17, 2010.
10.13	Investor Relations Consulting Agreement between Quantum and John Thornton dated for reference March 1, 2011(8)
(4)	Previously filed as an exhibit to our Annual Report on Form 10-K for the year ended June 30, 2010 filed with the SEC on September 13, 2010.
10.14	Public Relations Agreement dated June 21, 2011 between the Company and Vorticom Inc.(9)
(5)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 3, 2011.
10.15	Consulting Agreement dated July 18, 2011 between the Company and Advantag Aktiengesellschaft.(10)
(6)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 4, 2011.
10.16	English translation of the Consulting Agreement dated July 18, 2011 between the Company and Advantag Aktiengesellschaft.(10)
(7)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 3, 2011.
10.17	Consulting Agreement dated for reference July 8, 2011 between the Company and Quorum Capital Corporation.(11)
(8)	Previously filed as an exhibit to our Quarterly Report of Form 10-Q for the period ended March 31, 2011 filed with the SEC on May 10, 2010.
10.18	Executive Services Agreement dated for reference August 8, 2011 between the Company, Team Solar BV and Steven Pleging(12)
(9)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 27, 2011.
10.19	Employment Agreement dated effective September 1, 2011 between the Company and Stella Guo.
(10)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 20, 2011.
14.1	Code of Ethics.(3)
(11)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 11, 2011.
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(12)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 1, 2011.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(13)	Previously filed as an exhibit to our Annual Report on Form 10-K filed with the SEC on September 13, 2011.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(14)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on November 8, 2011.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(15)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 7, 2011.
99.1	Audit Committee Charter.(3)
(16)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 30, 2012

(1)	Previously filed as an exhibit to our Registration Statement on Form S-1 originally filed with the SEC on September 21, 2004.
(2)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended December 31, 2009 filed with the SEC on February 17, 2010.
(3)	Previously filed as an exhibit to our Quarterly Report of Form 10-Q for the period ended March 31, 2010 filed with the SEC on May 17, 2010.
(4)	Previously filed as an exhibit to our Annual Report on Form 10-K for the year ended June 30, 2010 filed with the SEC on September 13, 2010.
(5)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 3, 2011.
(6)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on March 4, 2011.
(7)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on May 3, 2011.
(8)	Previously filed as an exhibit to our Quarterly Report of Form 10-Q for the period ended March 31, 2011 filed with the SEC on May 10, 2010.
(9)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 27, 2011.
(10)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 20, 2011.
(11)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on August 11, 2011.
(12)	Previously filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 1, 2011.

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.

			QUANTUM SOLAR POWER CORP.
Dated:	~~September~~October 1215, ~~2011~~2012	~~By:~~	/s/ ~~Daryl~~Andras ~~J. Ehrmantraut~~Pattantyus-Abraham
			DARYL J. EHRMANTRAUT
			ANDRAS PATTANTYUS-ABRAHAM
			Chief Executive Officer and President
			Chief Executive Officer, Chief Technology Officer and
			President
			(Principal Executive Officer)
Dated:	~~September~~October 1215, ~~2011~~2012	By:	/s/ Graham R. Hughes
			GRAHAM R. HUGHES
			Chief Financial Officer, Secretary and Treasurer
			(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated:	~~September~~October 1215, ~~2011~~2012	By:	/s/ ~~Daryl~~Andras ~~J. Ehrmantraut~~Pattantyus-Abraham
			DARYL J. EHRMANTRAUT
			ANDRAS PATTANTYUS-ABRAHAM
			Director
Dated:	~~September~~October 1215, ~~2011~~2012	By:	/s/ Graham R. Hughes
			GRAHAM R. HUGHES
			Director
Dated:	~~September~~October 1215, ~~2011~~2012	By:	/s/ ~~Steven~~Daryl ~~Pleging~~J. Ehrmantraut
			STEVEN PLEGING
			DARYL J. EHRMANTRAUT
			Director
Dated:	September 12, 2011	By:	/s/ Andras Pattantyus-Abraham
			ANDRAS PATTANTYUS-ABRAHAM
			Director
Dated:	September 12, 2011	By:	/s/ Stella Guo
			STELLA GUO
			Director

Filing Compare · QUANTUM SOLAR POWER CORP.