~~U.S.~~UNITED ~~SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q~~STATES

Mark One
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended May 30, 2011
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______ to _______

SECURITIES AND EXCHANGE COMMISSION

~~Commission~~Washington, ~~file~~D.C. ~~number: 000-52721~~20549

FOX PETROLEUM INC. (Name of small business issuer in its charter)
Nevada (State or other jurisdiction of incorporation or organization)	n/a (I.R.S. Employer Identification No.)
545 EIGHTH AVENUE SUITE 401 NEW YORK, NY 10018 (Address of principal executive offices)
212-560-5195 (Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:	Name of each exchange on which registered:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of Class)

FORM 10-Q

~~Indicate~~x QUARTERLY byREPORT ~~checkmark~~PURSUANT ~~whether~~TO ~~the~~SECTION ~~issuer: (1) has filed all reports required to be filed by Section~~ 13 orOR 15(d) ofOF ~~the~~THE ~~Exchange~~SECURITIES ~~Act~~EXCHANGE ~~during~~ACT ~~the~~OF past 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 o 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 (Section 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 o No o Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.1934

~~Large~~For ~~accelerated~~the ~~filer~~quarterly ¨period ~~Accelerated~~ended ~~filer~~August ¨31, ~~Non-accelerated filer ¨ Smaller reporting company x~~2011

~~Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x~~OR

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date: Class	Outstanding as of July 12, 2011
Common Stock, $0.001 par value	128,174,997
Transitional Small Business Disclosure Format (Check one): Yes o No x

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

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Operations (Unaudited)	4
	Consolidated Statements of Cash Flows (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis (MD&A)	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	22
Item 4	Submission of Matters to a Vote of Security Holders	22
Item 5.	Other Information	22
Item 6.	Exhibits	24

For the transition period from ______ to ______.

~~PART~~Commission I.File ~~FINANCIAL~~Number: ~~INFORMATION ITEM 1. FINANCIAL STATEMENTS~~000-52721

~~Interim~~Fox ~~Consolidated~~Petroleum ~~Balance Sheets (unaudited)~~Inc.

ASSETS
	May 31,			May 31,
	2011			2011
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	-		$	4,870
VAT refund and other receivables		-			139,894
		-			-
Total Current Assets		-			144,764
Oil and Gas Interests – Note 4					588,270
		-			-
TOTAL ASSETS	$	-		$	733,034
CURRENT LIABILITIES
Accounts payable and accrued liabilities – Notes 4 and 5 and 8(c)	$	18,360,246		$	17,272,502
Due to related parties – Note 6		-			17,500
Notes payable – Note 5		5,312,333			4,885,333
		23,672,579			22,175,335
Fees payable in stock and warrants – Notes 5(e), 8(b), (d) and (e)		44,461			75,672
TOTAL LIABILITIES		23,717,040			22,251,007
STOCKHOLDERS' EQUITY
Capital stock – Notes 4, 5, 6, 7, and 8 Authorized:
500,000,000 common shares, par value $0.001 per share		-			-
128,174,997 common shares (May 31, 2011: 69,818,245)		84,818			84,818
Additional paid-in capital		44,937,395			44,937,395
Subscriptions receivable		(26,000,000	)		(26,000,000	)
Deficit accumulated during the development stage		( 42,739,253	)		(40,540,186	)
					-
Total Dolat Ventures, Inc. Stockholders' Equity		--		$	733,034

(Exact name of registrant as specified in its charter)

Ability to Continue as a Going Concern – Note 2 Commitments – Notes 4, 5, 6, 7, and 8 The accompanying notes are a integral part of these consolidated financial statements.

Nevada			27-1885936
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

545 Eighth Avenue, Suite 401 New York, NY			10018
(Address of principal executive offices)			(Zip Code)

~~Fox Petroleum, Inc.~~ (~~A Development Stage Company~~212) ~~INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS for the three months ended May 31, 2011 and 2010 and for the period May 4, 2004 (Date of Inception) to May 31, 2011 (Stated in US Dollars ) (unaudited)~~560-5195

							Period from
							04-Nov-04
	Three Months Ended						(inception)
	August 31,						to August 31,
	2011			2010			2011
REVENUES
Sales revenues	$	-		$	-		$	-
Cost of revenues		-			-			-
Gross Profit		-			-			-
OPERATING EXPENSES
Accounting and Audit Fees		16,000			29,967			338,381
Accretion of convertible note		-			-			2,575,492
Advertising and public relations		-			-			2,001,045
Bank charges		-			4,306			29,868
Consulting fees – Note 6		-			86,657			755,239
Filing and transfer agent		-						49,690
Finance fees – Notes 5 and 8(c)		-			4,870,617			9,712,804
Foreign exchange		-			243,989			415,308
Insurance		-			-			72,590
Impairment of oil & gas assets		-			-			10,046,683
Legal fees		-			10,300			567,848
Loss on failure to perform obligations under oil and gas commitments – Note 8(c)		-			-			12,910,000
License fees		-			25,126			67,328
Management fees – Note 6		-			188,956			1,380,186
Mineral property acquisition and exploration costs		-			-			17,000
Office and miscellaneous – Note 6		-			16,133			426,556
Travel and Entertainment		-			-			260,758
Loss for the period before other items		-			(5,582,760	)		(42,952,833	)
Other items:
Gain on recovery of VAT receivable								78,451
Interest and other income		-			-			9,986
Gain on recovery of payables		-			-			125,143
Net loss for the period	$	(16000	)	$	(5,582,760	)		(42,739,253	)
Basic and diluted loss per share		-			(0.20	)
Weighted average number of shares outstanding		24,063,670			27,763,897
The accompanying notes are a integral part of these consolidated financial statements.

(Registrant’s telephone number, including area code)

~~Fox~~Indicate ~~Petroleum,~~by ~~Inc.~~check (Amark ~~Development~~whether ~~Stage~~the ~~Company~~registrant (1) ~~Consolidated~~has ~~Statements~~filed ofall ~~Cash~~reports ~~Flows~~required ~~for~~to ~~the~~be ~~three~~filed ~~months~~by ~~ended~~Section ~~May~~13 ~~31,~~or ~~2011~~15(d) ~~and~~of ~~2010~~the ~~and~~Exchange ~~for~~Act during the ~~period~~preceding ~~May~~12 4,months ~~2004~~ (~~Date~~or offor ~~Inception)~~such toshorter ~~May~~period ~~31,~~that ~~2011~~the (issuer ~~Stated~~was inrequired USto ~~Dollars~~file such reports), and (~~unaudited~~2)has been subject to such filing requirements for the past 90 days. Yes x No o

						Period from
	Three Months Ended					May 4, 2006 (inception)
	May 30,					to August 31,
	2011		2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	-	$	(5,582,760	)	$	(42,739,253	)
Donated services and rent		-					21,000
Amortization of deferred financing costs		-
Accretion of convertible debt discount		-		-			2,575,492
Fees payable in stock and warrants		-		2,090			37,087
Finance fee paid in stock and warrants		-		4,870,671			8,270,294
Gain on settlement of amounts payable		-					(125,143	)
Impairment of oil and gas assets		-					10,046,683
Gain of VAT receivable written off		-					(78,451	)
Change in non-cash working capital balances related to operations:
VAT refund and other receivables		-		17,824			78,451
Prepaid expenses		-
Accounts payable and accrued liabilities		-		687,394			19,019,627
Net cash used in operating activities		-		(4,835	)		(2,894,213	)
Investing Activities
Proceeds (investment) in oil and gas interests		-		20,000			(7,702,687	)
Decrease (increase) in restricted cash		-		5,468
Net Cash Used in Investing Activities		-		25,468			(7,702,687	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		-		-			6,196,900
Proceeds from related party advances		-		(16,500	)		-
Proceeds from notes payable							4,400,000
Net Cash Provided (Used) in Financing Activities		-		(16,500	)		10,598,900
				-
NET INCREASE IN CASH		-		4133			-
CASH AT BEGINNING OF PERIOD		-		737			-
CASH AT END OF PERIOD	$	-	$	4870		$
Non-cash transactions – Note 9
The accompanying notes are a integral part of these consolidated financial statements.

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

~~PART~~Indicate Iby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. ~~FINANCIAL~~ See ~~INFORMATION~~definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act:

~~ITEM~~Large ~~2. MANAGEMENT’S~~Accelerated ~~DISCUSSION~~Filer ~~AND~~o ~~ANALYSIS~~Accelerated ~~(MD&A)~~Filer o Non-Accelerated Filer o Smaller Reporting Company x

~~Forward~~Indicate ~~looking~~by ~~statements~~check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x

~~Statements~~As ~~made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions~~ of ~~Section~~as ~~27A~~ of ~~the~~October ~~Securities~~17, ~~Act~~2011 ~~of 1933 (~~the ~~"Act")~~registrant ~~and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may~~had 1,~~" "will~~626,~~" "expect~~860,"653 ~~"believe,"~~shares ~~"anticipate,"~~of ~~"estimate,"~~its ~~"approximate,"~~Common ~~or "continue~~Stock," ~~or the negative thereof~~$0.001 Wepar ~~intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements~~value, ~~which speak only as of the date made~~outstanding. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

~~All~~FOX ~~references~~PETROLEUM ~~in this Annual Report on Form 10-K to the terms “we,” “our,” “us,” “FXPT~~INC.OB,” and the “Company” refer to Fox Petroleum Inc. and/or its wholly owned subsidiaries, Fox Petroleum (Alaska) Inc., Fox Petroleum, Inc. (a Kansas corporation) and Fox Energy Exploration Limited, as the case may be.

~~AVAILABLE~~FORM ~~INFORMATION~~10-Q

~~Fox~~AUGUST ~~Petroleum Inc. files annual~~31, quarterly, current reports, proxy statements, and other information with the Securities and Exchange Commission (the "Commission"). You may read and copy documents referred to in this Annual Report on Form 10-K that have been filed with the Commission at the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission filings by going to the Commission's website at http://www.sec.gov.2011

~~GENERAL~~INDEX

Fox Petroleum Inc. was incorporated under the laws of the State of Nevada on May 4, 2004 under the name of “Nova Resources Inc.” Subsequently, our Board of Directors decided to change our name to “Fox Petroleum Inc” to better reflect the new direction of our business of exploration and development activities to the oil and gas sectors. Therefore, on February 5, 2007, we changed our name to “Fox Petroleum Inc.”. The name change was accomplished through a merger with our wholly owned subsidiary, Fox Petroleum Inc., which was incorporated for the sole purpose of changing our name with our company carrying on as the surviving corporation under the new name of “Fox Petroleum Inc.” As of the date of this Annual Report, we are a development stage company engaged in the identification, acquisition, exploration and, if warranted, development of prospective oil and gas properties. We have oil and gas interests in a United Kingdom onshore license and joint venture interests in Texas.

PART I – FINANCIAL INFORMATION		Page

Item 1.	Financial Statements
	Consolidated Balance Sheets as of August 31, 2011 (unaudited) and February 28, 2011	3
	Consolidated Statements of Operations for the Three and Six Months Ended August 31, 2011 and 2010 and for the Period November 4, 2004 (Inception) to August 31, 2011 (unaudited)	4
	Consolidated Statements of Cash Flows for the Six Months Ended August 31, 2011 and 2010 and for the Period November 4, 2004 (Inception) to August 31, 2011 (unaudited)	5
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	37
Item 1.A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	(Removed & Reserved)	38
Item 5.	Other Information	38
Item 6.	Exhibits	38

SIGNATURE		39

~~Subsidiaries~~PART I – FINANCIAL INFORMATION

~~Fox Petroleum (Alaska) Inc~~Item 1. Financial Statements

Fox Petroleum Inc. and Subsidiaries
(An Development Stage Company)
Consolidated Balance Sheets

	August 31,			February 28,
	2011			2011
	(Unaudited)			Restated
ASSETS

Current assets
Cash	$	-		$	-
Due from affiliate		22,500			22,500
Total current assets		22,500			22,500

Property and equipment, net		25,173			35,991

Total assets	$	47,673		$	58,491


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued expenses	$	2,500		$	14,432,928
Accrued interest		1,477,952			1,234,651
Accrued interest, related parties		1,502			143,228
Due to officer		42,611			3,789
Notes payable		5,320,333			5,343,932
Notes payable, related parties		5,019			196,468
Total current liabilities		6,849,917			21,354,996

Fees payable in stock and warrants		-			4,364

Stockholders' deficit
Preferred stock, $0.001 par value, 100,000,000 and 50,000,000 shares
authorized, 50,000,000 and no shares shares issued and
outstanding at August 31 and February 28, 2011, respectively		50,000			-
Common stock, $.001 par value, 2,900,000,000 and 90,000,000 shares
authorized, 1,617,397,966 and 111,924,997 shares issued and
outstanding at August 31 and February 28, 2011, respectively		1,617,398			111,925
Additional paid-in capital		39,568,165			22,738,715
Accumulated other comprehensive income (loss)		(758	)		(17,883	)
Deficit accumulated during the development stage		(48,037,049	)		(44,133,626	)
Total stockholders' deficit		(6,802,244	)		(21,300,869	)

Total liabilities and stockholders' deficit	$	47,673		$	58,491

See accompanying notes to unaudited consolidated financial statements.

Fox Petroleum Inc. and Subsidiaries
(An Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

													For the Period
													November 4, 2004
	For the Three Months Ended						For the Six Months Ended						(Inception) to
	August 31,			August 31,			August 31,			August 31,			August 31,
	2011			2010			2011			2010			2011
				Restated						Restated			Restated

Sales revenue	$	-		$	-		$	-		$	-		$	-

Operating expenses:
General and administrative expenses		18,446			1,345,800			29,618			1,345,800			4,316,924
Consulting fees		13,948,500			-			13,994,136			-			18,170,390
Finance Fees		-			-			-			(514,500	)		9,218,304
Impairment of oil and gas assets		-			-			-			-			10,046,683
Loss on failure to perform obligations under
oil and gas commitments		-			-			-			-			12,910,000
Management fees		-			-			-			-			1,380,186
Total operating expenses		13,966,946			1,345,800			14,023,754			831,300			56,042,487

Loss from operations		(13,966,946	)		(1,345,800	)		(14,023,754	)		(831,300	)		(56,042,487	)

Other income (expense):
Gain on recovery of VAT receivable		-			-			-			-			78,451
Gain on recovery of payables		14,417,928			-			14,417,928			-			17,727,691
Interest and other income		-			-			-			-			9,986
Interest expense		(124,794	)		(120,129	)		(251,023	)		(237,686	)		(2,056,135	)
Impairment of Goodwill		-			(397,575	)		-			(397,575	)		(397,575	)
Accretion of convertible note discounts		(2,513	)		-			(13,401	)		-			(2,608,157	)
Loss on conversion of debt		(3,999,923	)		-			(4,033,173	)		-			(4,748,823	)
Total other income (expense)		10,290,698			(517,704	)		10,120,331			(635,261	)		8,005,438

Loss before income taxes		(3,676,248	)		(1,863,504	)		(3,903,423	)		(1,466,561	)		(48,037,049	)

Provision for income taxes		-			-			-			-			-

Net loss	$	(3,676,248	)	$	(1,863,504	)	$	(3,903,423	)	$	(1,466,561	)	$	(48,037,049	)


Net loss per share - basic and diluted	$	(0.00	)	$	(0.05	)	$	(0.00	)	$	(0.04	)

Weighted average number of shares
outstanding - Basic and Diluted		1,586,972,018			35,980,487			851,646,877			34,607,790


Net loss	$	(3,676,248	)	$	(1,863,504	)	$	(3,903,423	)	$	(1,466,561	)	$	(48,037,049	)

Foreign currency translation gain (loss)		17,172			15,721			17,125			15,721			9,003

Total comprehensive loss	$	(3,659,076	)	$	(1,847,783	)	$	(3,886,298	)	$	(1,450,840	)	$	(48,028,046	)


See accompanying notes to unaudited consolidated financial statements.

Fox Petroleum Inc. and Subsidiaries
(An Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

							For the Period
							November 4, 2004
							(Inception) to
	For the Six Months Ended August 31,						August 31,
	2011			2010			2011
				Restated
Cash flows from operating activities:
Net income (loss)	$	(3,903,423	)	$	(1,466,561	)	$	(48,037,049	)
Adjustments to reconcile net loss to net cash from (used in) operations:
Donated services and rent		-			-			21,000
Depreciation		10,796			1,686			22,857
Accretion of convertible debt discount		13,401			-			2,608,157
Loss on debt conversion		4,033,173						4,748,823
Fees payable in stock and warrants		(4,364	)		-			(7,374	)
Finance fees paid in stock and warrants		-			(514,500	)		7,755,794
Gain on settlement of accounts payable		(14,417,928	)		-			(17,727,691	)
Impairment of oil and gas assets		-			-			10,046,683
Impairment of goodwill		-			397,575			397,575
Gain of VAT receivable written off		-			-			(78,451	)
Stock issued for services		13,991,000			1,344,112			17,450,612
Changes in operating assets and liabilities:
VAT Refund and other receivables		-			-			78,451
Accounts payable and accrued expenses		(12,500	)		-			18,294,488
Accrued interest		243,301			235,956			1,447,893
Accrued interest, related parties		7,722			-			18,899
Net cash from (used in) operating activities		(38,822	)		(1,732	)		(2,959,333	)

Cash flows from investing activities:
Cash acquired from acquisitions		-			9			9
Advances to related entities		-			-			(22,500	)
Proceeds (investment) in oil and gas interests		-			-			(7,702,687	)
Net cash from (used in) investing activities		-			9			(7,725,178	)

Cash flows from financing activities:
Proceeds from issuance of common stock		-			-			6,196,900
Proceeds from issuance of notes payable		-			-			4,445,000
Advances from officer		38,822			-			42,611
Advances from related parties		-			-			34,000
Repayments of advances from related parties		-			-			(34,000	)
Net cash from (used in) financing activities		38,822			-			10,684,511

Effect of exchange rate changes on cash		-			1,729			-

Net increase in cash		-			6			-

Cash at beginning of period		-			-			-

Cash at end of period	$	-		$	6		$	-

See accompanying notes to unaudited consolidated financial statements

continued on next page

Fox Petroleum Inc. and Subsidiaries
(An Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)


					For the Period
					November 4, 2004
					(Inception) to
	For the Six Months Ended August 31,				August 31,
	2011		2010		2011
			Restated		Restated
Supplemental disclosure of cash flow information:

Cash paid for interest	$	-	$	-	$	16,667

Cash paid for taxes	$	-	$	-	$	-

Non-cash investing and financing activities:

Common stock issued in conversion of notes payable
and accrued interest, related parties	$	4,324,000	$	-	$	5,078,400

Common stock issued in conversion of notes payable	$	69,923	$	-	$	69,923

Cancellation of subscriptions for 52,000,000 shares of common stock	$	-	$	26,000,000	$	26,000,000

Issuance of 1,750,000 shares of common stock for acquisition
of 1536692 Ontario, Inc.	$	-	$	96,250	$	96,250

Benefical conversion feature on convertible debt	$	-	$	-	$	2,608,157

Issuance of 52,000,000 common stock subscriptions	$	-	$	-	$	26,000,000

Issuance of 4,080,000 shares of common stock for oil and gas interests	$	-	$	-	$	1,965,702

See accompanying notes to unaudited consolidated financial statements.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 1 – Restatement of Consolidated Financial Statements

The Company restated its previously issued consolidated financial statements included in its original Annual Report on Form 10-K for the year ended February 28, 2011 in its Amendment No. 1 to Form 10-K on August 9, 2011 to reflect the effects of accounting and reporting errors, and to record the acquisition of its wholly-owned subsidiary, resulting from a deficiency in its accounting and financial statement preparation process. This error and the related adjustments resulted in an understatement of net loss of $1,378,373 for the year ended February 28, 2011 and the understatements of $58,491and $1,394,373 of total assets and deficits accumulated during the development stage, respectively, and the overstatement of $2,3174,583 of total current liabilities. The revisions applied to the affected individual line items in the consolidated balance sheet as of February 28, 2011 are as follows:

Consolidated Balance Sheet – February 28, 2011

	February 28, 2011
	As previously						As
	reported			Adjustments			restated
ASSETS
Current assets
Cash	$	-		$	-		$	-
Due from affiliate		-			22,500			22,500
Total current assets		-			22,500			22,500

Property and equipment, net		-			35,991			35,991

Total assets	$	-		$	58,491		$	58,491


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued expenses	$	18,360,246		$	(3,927,318	)	$	14,432,928
Accrued interest		-			1,234,651			1,234,651
Accrued interest, related parties		-			143,228			143,228
Due to officer		-			3,789			3,789
Notes payable		5,312,333			31,599			5,343,932
Notes payable, related parties		-			196,468			196,468
Total current liabilities		23,672,579			(2,317,583	)		21,354,996

Fees payable in stock and warrants		44,461			(40,097	)		4,364

Stockholders' deficit
Preferred stock		-			-			-
Common stock		84,818			27,107			111,925
Additional paid-in capital		44,937,395			(22,198,680	)		22,738,715
Subscriptions receivable		(26,000,000	)		26,000,000			-
Accumulated other comprehensive income (loss)		-			(17,883	)		(17,883	)
Deficit accumulated during the exploration stage		(42,739,253	)		(1,394,373	)		(44,133,626	)
Total stockholders' deficit		(23,717,040	)		2,416,171			(21,300,869	)

Total liabilities and stockholders' deficit	$	-		$	58,491		$	58,491

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 1 – Restatement of Consolidated Financial Statements (Continued)

The Company restated its previously issued unaudited consolidated financial statements included in the Amendment No. 1 to its Quarterly Report on Form 10-Q/A for the quarter ended August 31, 2010 in its Amendment No. 2 to Form 10-Q on September 29, 2011 to reflect the effects of accounting and reporting errors resulting from a deficiency in its accounting and financial statement preparation process. This error and the related adjustments resulted in an understatement of net income of $1,847,504 and $1,466,561 for the three and six months ended August 31, 2010, respectively, and the understatement of $1,466,561 of deficits accumulated during the development stage, and the understatement of $578,173 of total current liabilities, as of August 31, 2010. The revisions applied to the affected individual line items in the consolidated financial statements are as follows:

Consolidated Balance Sheet – August 31, 2010

	August 31, 2010
	As previously						As
	reported			Adjustments			restated
ASSETS
Current assets
Cash	$	-		$	6		$	6
Total current assets		-			6			6

Property and equipment, net		-			43,428			43,428

Total assets	$	-		$	43,434		$	43,434


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued expenses	$	18,360,246		$	(757,698	)	$	17,602,548
Accrued interest		-			993,654			993,654
Accrued interest, related parties		-			123,819			123,819
Notes payable		5,312,333			-			5,312,333
Notes payable, related parties		-			218,398			218,398
Total current liabilities		23,672,579			578,173			24,250,752

Fees payable in stock and warrants		44,461			-			44,461

Stockholders' deficit
Common stock		84,818			(16,568	)		68,250
Additional paid-in capital		44,937,395			(25,057,570	)		19,879,825
Subscriptions receivable		(26,000,000	)		26,000,000			-
Accumulated other comprehensive income (loss)		-			5,960			5,960
Deficit accumulated during the development stage		(42,739,253	)		(1,466,561	)		(44,205,814	)
Total stockholders' deficit		(23,717,040	)		(534,739	)		(24,251,779	)

Total liabilities and stockholders' deficit	$	-		$	43,434		$	43,434

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 1 – Restatement of Consolidated Financial Statements (Continued)

Consolidated Statements of Operations – Three Months ended August 31, 2010

	Three Months ended August 31, 2010
	As previously						As
	reported			Adjustments			restated

Sales revenue	$	-		$	-		$	-

Operating expenses:
General and administrative expenses		-			1,345,800			1,345,800
Consulting fees		16,000			(16,000	)		-
Total operating expenses		16,000			1,329,800			1,345,800

Loss from operations		(16,000	)		(1,329,800	)		(1,345,800	)

Other income (expense):
Interest expense		-			(120,129	)		(120,129	)
Impairment of goodwill		-			(397,575	)		(397,575	)
Total other income (expense)		-			(517,704	)		(517,704	)

Loss before income taxes		(16,000	)		(1,847,504	)		(1,863,504	)

Provision for income taxes		-			-			-

Net loss	$	(16,000	)	$	(1,847,504	)	$	(1,863,504	)


Net loss per share - basic and diluted	$	(0.00	)				$	(0.05	)

Weighted average number of shares
outstanding - Basic and Diluted		24,063,670			11,916,817			35,980,487

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 1 – Restatement of Consolidated Financial Statements (Continued)

Consolidated Statements of Operations – Six Months ended August 31, 2010


	Six Months ended August 31, 2010
	As previously					As
	reported		Adjustments			restated

Sales revenue	$	-	$	-		$	-

Operating expenses:
General and administrative expenses		-		1,345,800			1,345,800
Finance Fees		-		(514,500	)		(514,500	)
Total operating expenses		-		831,300			831,300

Loss from operations		-		(831,300	)		(831,300	)

Other income (expense):
Interest expense		-		(237,686	)		(237,686	)
Impairment of goodwill		-		(397,575	)		(397,575	)
Total other income (expense)		-		(635,261	)		(635,261	)

Loss before income taxes		-		(1,466,561	)		(1,466,561	)

Provision for income taxes		-		-			-

Net loss	$	-	$	(1,466,561	)	$	(1,466,561	)


Net loss per share - basic and diluted	$	-				$	(0.04	)

Weighted average number of shares
outstanding - Basic and Diluted		-		34,607,790			34,607,790

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 1 – Restatement of Consolidated Financial Statements (Continued)

Consolidated Statements of Cash Flows – Six Months Ended August 31, 2010



	Six Months ended August 31, 2010
	As previously					As
	reported		Adjustments			restated

Cash flows from operating activities:
Net loss	$	-	$	(1,466,561	)	$	(1,466,561	)
Adjustments to reconcile net income loss to
net cash used in operations:
Depreciation		-		1,686			1,686
Finance fees paid in stock and warrants		-		(514,500	)		(514,500	)
Impairment of goodwill		-		397,575			397,575
Stock issued for services		-		1,344,112			1,344,112
Changes in operating assets and liabilities:
Accrued interest		-		235,956			235,956
Net cash used in operating activities		-		(1,732	)		(1,732	)

Cash flows from investing activities:
Proceeds (investment) in oil and gas interests		-		9			9
Net from investing activities		-		9			9

Cash flows from financing activities:
Proceeds from issuance of common stock		-		-			-
Proceeds from issuance of notes payable		-		-			-
Net cash from financing activities		-		-			-

Effect of exchange rate changes on cash		-		1,729			1,729

Net increase in cash		-		6			6

Cash at beginning of period		-		-			-

Cash at end of period	$	-	$	6		$	6

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 2 – Nature of Business, Presentation, and Going Concern

Organization

Fox Petroleum, Inc., the “Company”, was incorporated in Nevada on November 4, 2004 with the intent to engage in the business of oil and gas exploration. The Company has oil and gas interests in the North Sea and Texas and has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of amounts from the properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying properties, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreements and to complete the development of the properties and upon future profitable production or proceeds for the sale thereof.

On April 17, 2007, we incorporated a wholly owned subsidiary, Fox Petroleum (Alaska) Inc. (“Fox Petroleum Alaska”) under the laws of the State of Alaska in order to carry out our Alaska operations after completing a lease purchase and sale agreement with Fox Petroleum LLC. In order to hold Alaska oil and gas leases, we either had to be registered in Alaska or operate through an Alaska subsidiary.

Fox Energy Exploration Limited.

On May 17, 2007, we incorporated a wholly owned subsidiary, Fox Energy Exploration Limited (“Fox Energy Exploration Limited”), in England and Wales to hold assets in the United Kingdom under a farm-in agreement with Granby Enterprises Limited and Atlantic Petroleum UK Limited.

~~SHARE~~On ~~EXCHANGE~~June ~~AGREEMENTS~~9, 2010, Richard Moore, the Company’s President / Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and a member of the Board of Directors, resigned from all positions. Also on June 9, 2010, the Company’s Board of Directors elected Mr. William Lieberman as a member of the Board of Directors and appointed Mr. Lieberman as the Company’s President / Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer.

On July 15, 2010, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with 1536692 Ontario, Inc. (“Ontario”), a Canadian corporation, and the shareholders of Ontario (“Ontario Shareholders”). Ontario owns a scrap plastic processing plant with certain equipment, fixtures and improvements and assets located in Hamilton, Ontario, Canada with the intent of engaging in the business of recycling plastics. Pursuant to the Share Exchange Agreement, the Company acquired, from the Ontario Shareholders, all of the capital stock of Ontario in exchange for an aggregate of 1,750,000 000 newly issued shares of its restricted common stock, par value $0.001 per share. The purchase price was determined by the total market value of the newly issued shares on July 15, 2010, totaling $96,250, which was based on the closing market price of the Company’s common stock on the acquisition date. The acquisition has been accounted for under the purchase method. The excess of the purchase price paid over the fair value of the assets acquired and liabilities assumed has been classified as goodwill as of the acquisition date. None of the goodwill is expected to be deductible for income tax purposes.

~~Effective~~On July 15, ~~2011~~2010, ~~our Board of Directors authorized~~ the ~~execution~~Company ofentered ~~that~~into ~~certain~~a ~~share~~Share ~~exchange~~Exchange ~~agreement~~Agreement ~~dated July 15, 2011~~ (the “~~Ontario~~Resource Share Exchange Agreement”) ~~among~~with ~~us,~~Resource ~~1536692~~Polymers ~~Ontario~~ Inc. (“Resource”), a ~~private~~Canadian corporation ~~duly registered under the laws of the Province of Ontario~~, ~~Canada (“Ontario”)~~ and the shareholders of Ontario (~~the~~ “Ontario Shareholders”). Into ~~accordance~~acquire ~~with~~100% ~~the terms and provisions~~ of the ~~Ontario~~capital ~~Share~~stock ~~Exchange Agreement: (i) the Ontario Shareholders tendered all~~ of ~~their~~Resource. As ~~shares held~~ of ~~record, which constituted one hunred percent (100%) of~~ the ~~total~~date ~~issued and outstanding shares~~ of ~~Ontario~~this report, ~~to us; (ii) we issued to~~ the ~~Ontario~~acquisition ~~Shareholders~~has ~~1,750,000~~not ~~shares~~been ofcompleted ~~our~~as ~~restricted~~Resource ~~common~~has ~~stock;~~not ~~and~~satisfied ~~(iii)~~its weconditions ~~assumed~~precedent ~~a debt due and owing by Ontario~~ to ~~Davfam~~closing ~~Investments (1998) Ltd. in~~ the ~~amount~~exchange ofand ~~$225,000, which debt was incurred by Ontario during fiscal years 1994 through 1995 . Ontario is~~ the ~~owner~~Company ofrescinded ~~a scrap plastic processing plant with certain equipment, fixtures and improvements and assets located in Hamilton, Ontario, Canada. Ontario is our wholly-owned subsidiary as a result of~~ the ~~Ontario~~Resource Share Exchange Agreement.

~~Resource~~On ~~Share~~September ~~Exchange~~7, ~~Agreement~~2011, the Company entered into a Purchase and Sale agreement to acquire the assets of Renfro Energy LLC, a Texas limited liability company, and Cameron Parish Pipelines LLC, a Texas limited liability company, for a combined $300,000 in cash. As additional compensation to the seller, the Company agrees to convey and assign at the closing a Ten Percent (10%) Net Profits Interest (“NPI”) to the seller. NPI is defined as revenues attributable to oil and gas production, less direct expenses and costs, from the Cameron Parish School Board lease (“CPSB”). The Company expects the acquisition to be completed by October 31, 2011 contingent upon the successful completion of audits of both companies.

~~Effective~~The ~~July~~Company 15, 2011, our Board of Directors further authorized the execution of that certain share exchange agreement dated July 15, 2011 (the “Resource Share Exchange Agreement”) among us, Resource Polymers Inc., a private corporation duly registered under the laws of the Province of Ontario, Canada (“Resource”) and the shareholders of Resource (the “Resource Shareholders”). In accordance with the terms and provisions of the Resource Share Exchange Agreement: (i) the Resource Shareholders tendered all of their shares held of record, which constituted one hunred percent (100%) of the total issued and outstanding shares of Resource, to us; (ii) we issued to the Resource Shareholders 1,750,000 shares of our restricted common stock; and (iii) ) we assumed a debt due and owing by Resource to Consolidated Recyclers Inc. in the amount of $350,000, which debt was incurred by Resource during fiscal years 1994 through 1997. Resource is ~~also~~currently ~~the~~exploring ~~owner~~new ofacquisition ~~a scrap plastic processing plant with certain equipment, fixtures and improvements and assets located in Hamilton, Ontario, Canada~~opportunities. ~~Resource is our wholly-owned subsidiary as a result of the Ontario Share Exchange Agreement.~~

~~CURRENT BUSINESS OPERATIONS~~12

AsFox ofPetroleum ~~the date of this Quarterly Report, we are a development stage company engaged in acquiring, developing and operating plastic recycling operations throughout North America~~Inc. ~~With a focus on plastic waste compounds~~ and ~~the aggregating of plastic scrap products for manufactures. Fox Petroleum's goal is to become an important partner for leading recycling companies who need proficient services.~~Subsidiaries

~~RESULTS~~(A OFDevelopment ~~OPERATIONS~~Stage Company)

~~The~~Notes ~~following selected financial information is qualified by reference~~ to, ~~and~~Consolidated ~~should be read in conjunction with our consolidated financial statements and the notes thereto, and “Management’s Discussion and Analysis of~~ Financial Condition and Results of Operation” contained elsewhere herein. The selected consolidated income statement data for the three month period ended May 30, 2011 and May 30, 2010 and the selected consolidated balance sheet data as of May 30, 2011 and 2010 are derived from our audited consolidated financial statements which are included elsewhere herein.Statements

WeAugust are a developmental stage company and have not generated any revenue to date. The following table sets forth selected financial information for the periods indicated. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and31, ~~accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.~~2011

~~We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.~~(unaudited)

~~Three~~Note ~~Month~~2 ~~Period~~– ~~Ended~~Nature ~~May~~of 30Business, ~~2011~~Presentation, ~~Compared~~and toGoing ~~Three Month Period Ended August 31, 2011.~~Concern

~~Our~~Basis ~~net loss for the three month period ended May 30, 2011 was ($7,781,827) compared to a net loss~~ of ($32,209,932) during the three month perio ended May 31, 2010, a decrease of $24,428,105. During the three month periods ended August 30, 2011 and 2010, we did not generate any revenue from operations.Presentation

~~During~~The ~~the~~accompanying ~~three~~unaudited ~~month~~financial ~~period~~statements ~~ended~~have ~~May~~been ~~30,~~prepared ~~2011,~~in weaccordance ~~incurred~~with ~~operating~~accounting ~~expenses~~principles ofgenerally ~~$7,906,970~~accepted ~~compared~~in ~~to $32,289,013 (offset by $73,073 fr foreign exchange) incurred during the three month period ended May 31, 2010, a decrease of $24,382,043.~~ The ~~decrease~~United inStates ~~operating expenses was primarily attributable to the following items: (i) impairment~~ of ~~oil~~America ~~and gas assets of $588,270~~ (~~2010:~~“U.S. ~~$9,458,413~~GAAP”); ~~(ii)~~for ~~accretion~~interim offinancial ~~convertible~~statement ~~note~~presentation ofand ~~$-0-~~the ~~(2010:~~rules ~~$2,575,492);~~ and ~~(iii)~~regulations ~~loss~~of onthe ~~failure~~Securities ~~to perform obligations under oil~~ and ~~gas~~Exchange ~~commitments~~Commission ~~of $-0-~~ (~~2010: $12,910,000~~“SEC”). ~~The decrease in accretion of convertible note for the three month period ended May 31~~ Accordingly, ~~2011~~they asdo ~~compared~~not toinclude ~~the~~all ~~three~~of ~~month period ended May 31, 2010 was primarily due to our default during~~ the ~~2010~~information ~~fiscal~~and ~~year~~footnotes ~~end~~required ~~of repayments on notes resulting~~ in anannual ~~immediate~~financial ~~accretion of the entire discount of the notes during the 2010 year end~~statements. In ~~During~~ the ~~three~~opinion ~~month period ended May 31, 2010, we incurred substantial costs under the Letter~~ of ~~Commitment with Senergy~~management, ~~which was entered into to fulfill our obligations under~~ the ~~Farm-In~~unaudited ~~Agreement~~financial ~~with~~statements ~~Valiant~~contain ~~and~~all ~~Petrofac~~adjustments ~~and further penalties~~ (~~which~~consisting ~~was~~only ~~also~~of ~~expensed~~normal ~~and~~recurring ~~accrued during the year~~accruals) ~~for~~necessary ~~our failure~~ to ~~fulfill~~present ~~our~~fairly ~~commitment for~~ the ~~use~~financial ofposition ~~the rig.. General~~ and ~~administrative~~results ~~expenses~~of ~~generally~~operations ~~include corporate overhead, financial~~ and ~~administrative~~cash ~~contracted services, marketing, and consulting costs~~flows. ~~Other~~The ~~items~~results ~~incurred during the three mont period ended May 31, 2011 was gain on recovery~~ of ~~payables~~operations presented ofare ~~$125,143~~not ~~(2010:~~necessarily ~~$-0-),~~indicative ~~gain on recovery~~ of ~~VAT~~the ~~receivable~~results ofto ~~$-0-~~be ~~(2010:~~expected ~~$78,451)~~for ~~and~~any ~~interest~~other ~~and~~interim ~~other~~period ~~income~~or offor ~~$-0-~~the ~~(2010:~~entire ~~$630)~~year.

~~During~~These ~~the~~unaudited ~~three~~financial ~~month~~statements ~~period~~should ~~ended~~be ~~May~~read ~~30,~~in ~~2011,~~conjunction wewith ~~incurred~~our a2011 ~~loss~~annual ~~for~~financial ~~the~~statements ~~period~~included ofin ~~($7,781,827)~~our orAmendment ~~($0~~No.~~32)~~ ~~per~~1 ~~share as compared~~ to aForm ~~loss for the period of ($32~~10-K,~~209,932)~~ orfiled ~~($2.03)~~with ~~per share during~~ the ~~three~~SEC ~~month~~on ~~period~~August ~~ended May 31~~9, ~~2010. The basic weighted average number of shares outstanding was 24,063,670 for the three month period ended May 31,~~ 2011 ~~compared to 15,886,053 for the three month period ended May 31, 2010~~.

~~LIQUIDITY~~Going ~~AND CAPITAL RESOURCES~~Concern

~~Three~~The ~~Month~~accompanying ~~Period~~unaudited ~~Ended~~consolidated ~~May~~financial 30statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As reflected in the accompanying unaudited consolidated financial statements, the Company had no cash and an accumulated deficit during the development stage of $47,987,049 at August 31, 2011 and a net loss and net cash used in operations of $3,853,423 and $38,822, respectively, for the six months ended August 31, 2011. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

AsThe atability ~~May~~of ~~30,~~the ~~2011,~~Company’s ~~our~~to ~~current~~continue ~~assets~~as ~~were~~a ~~$-0-~~going ~~and~~concern ~~our~~is ~~current~~dependent ~~liabilities~~upon ~~were~~the ~~$23,717,040,~~Company’s ~~which~~ability ~~resulted~~to infurther aimplement ~~working~~its ~~capital~~business ~~deficit of $23~~plan,~~717,040.~~ Asgenerate ~~of February 28~~revenues, ~~2011,~~and ~~current~~continue ~~liabilities~~to ~~were~~raise ~~comprised~~additional ~~of:~~investment ~~(i)~~capital. No ~~$18,360,246~~assurance incan ~~accounts~~be ~~payable~~given ~~and~~that ~~accrued~~the ~~liabilities;~~Company ~~and~~will ~~(ii)~~be ~~$5,312,333~~successful in ~~notes~~these ~~payable~~efforts. ~~See “ – Material Commitments.”~~

AsThe ofunaudited ~~May~~consolidated ~~30,~~financial ~~2011,~~statements ~~our~~do ~~total~~not ~~assets~~include ~~were~~any ~~$-0-.~~adjustments ~~The~~relating ~~decrease~~to inthe ~~total~~recoverability ~~assets~~and ~~during~~classification of recorded asset amounts or the ~~three~~amounts ~~month~~and ~~period~~classification ~~ended~~of ~~May~~liabilities ~~31,~~that ~~2011~~might ~~from~~be necessary should the ~~three~~Company ~~mont~~be ~~period~~unable ~~ended~~to ~~May~~continue ~~31,~~as ~~2010~~a ~~was~~going ~~primarily~~concern. Management ~~due~~believes tothat ~~our~~actions ~~decrease~~presently inbeing ~~cash~~taken to obtain additional funding and implement its strategic plans provide the ~~VAT~~opportunity ~~refund~~for ~~and~~the ~~other~~Company ~~receivable~~to continue as a going concern.

AsNote at3 ~~May,~~– Summary ~~2011, our total liabilities were $23,717,040 comprised entirely~~ of ~~current~~Significant ~~liabilities.~~Accounting The increase in liabilities during the three month period ended May 31, 2011 from the three month period ended May 31, 2010 was primarily due to the increase in accounts payable and accrued liabilities.Policies

~~Stockholders’~~Use ~~deficit~~of ~~increased from ($20,585,213) for the three month period ended May 31, 2010 to ($23,717,040) for the three month period ended May 31, 2010.~~Estimates

~~Cash~~The ~~Flows~~preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in the accompanying unaudited consolidated financial statements include the valuation of share-based payments and the valuation allowance on deferred tax assets. Actual results could differ from ~~Operating~~those ~~Activities~~estimates and would impact future results of operations and cash flows.

~~NONE~~Principles of Consolidation

~~Cash~~The ~~Flows~~consolidated ~~from~~financial ~~Investing~~statements ~~Activities~~include the accounts of Fox Petroleum Inc. and its wholly-owned subsidiaries, 1536692 Ontario, Inc., Fox Petroleum (Alaska) Inc. and Fox Energy Exploration Limited. All significant inter-company balances and transactions have been eliminated in consolidation.

~~None~~Reclassifications

~~Cash~~Certain ~~Flows~~items ~~from~~on ~~Financing~~the ~~Activities~~2010 statement of operations, and statement of cash flows have been reclassified to conform to the current period presentation.

~~None~~13

~~PLAN~~Fox OFPetroleum ~~OPERATION~~Inc. ~~AND~~and ~~FUNDING~~Subsidiaries

We(A ~~have~~Development noStage access to capital to repay our debt or fund our current or ongoing operations. Unless we can secure additional capital and renegotiate the terms of our outstanding debts, we may be required to discontinue our operations at any time. We will need additional further advances and issuance of debt instruments to fund our operations over the next six months. In connection with our future business plan, management anticipates additional increases in operating expenses and capital expenditures relating to acquisition of further interests in gold mining concessions. We would finance these expenses with further issuances of securities and debt issuances. We expect we would need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities would result in dilution to our current shareholders. Further, such securities may have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.Company)

~~MATERIAL~~Notes ~~COMMITMENTS~~to Consolidated Financial Statements

AsAugust ~~of the date of this Quarterly Report~~31, ~~we have the following material commitments as described below.~~2011

~~Financing from Trafalgar Capital Specialized Investment Fund, Luxembourg~~(unaudited)

OnNote ~~June~~3 ~~24,~~– Summary 2008, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Trafalgar Capital Specialized Investment Fund, Luxembourg (“Trafalgar”) pursuant to which we sold to Trafalgar $2,500,000 of aSignificant ~~senior~~Accounting ~~secured~~Policies convertible redeemable debenture. Pursuant to the terms of the Securities Purchase Agreement, we agreed to pay to Trafalgar a legal and documentation review fee of $17,500, a due diligence fee of $10,000, a warrant to purchase 500,000 shares of our common stock for five years at an exercise price of $2.9851 (~~issued~~Continued), a commitment fee equal to 7% of the principal amount of the debenture, a facility fee equal to 2% of the principal amount of the debenture, and 200,000 restricted shares of our common stock (issued). In connection with the Securities Purchase Agreement, we executed a nonbinding term sheet to enter into a committed equity facility with Trafalgar, which would be entered into upon the debenture being repaid in full by us.

~~Effective~~Cash ~~October 31, 2008 we amended the Securities Purchase Agreement~~ and ~~related~~Cash transaction documents dated June 24, 2008 (collectively, the “Original Transaction Documents”) between us and Trafalgar. The amendment and certain related transaction documents (collectively, the “Amended Transaction Documents”) are dated October 31, 2008 and were executed and delivered to us by Trafalgar on May 11, 2008.Equivalents

~~Under~~The ~~the~~Company ~~Amended~~considers ~~Transaction~~all ~~Documents,~~highly weliquid ~~sold~~temporary tocash ~~Trafalgar~~investments ~~$3,500,000~~with ofan ~~secured~~original ~~convertible~~maturity ~~redeemable debentures consisting~~ of: ~~(i)~~three ~~the~~months ~~original~~or ~~debenture~~less ~~sold~~ to ~~Trafalgar~~be ~~under~~cash ~~the~~equivalents. ~~Original~~At ~~Transaction~~August ~~Documents~~31 ~~in the principal amount of $2,500,000, which was amended~~ and ~~extended~~February ~~such that the debenture was separated into two debentures~~28, ~~each of which are for a total principal amount of $1~~2011,~~250,000~~ ~~(the “Amended Debentures”); and (ii) a new debenture in the total principal amount of $1~~respectively,~~000,000~~ (the ~~“New~~Company ~~Debenture”~~had ~~and~~no ~~together~~cash ~~with the Amended Debentures, the “Debentures”)~~equivalents.

~~The~~Property ~~Amended Debentures mature as to $1,250,000 on April 30, 2010 (later extended to October 31, 2010)~~ and $1,250,000 on April 30, 2011 and bear an annual interest rate of 10% compounded monthly until the unpaid principal is paid. Trafalgar is entitled, at its option, to convert and sell the principal amount of the Amended Debenture plus accrued interest into shares of our common stock at the price per share equal to the lesser of: (i) 100% of the volume weighted average price as quoted by Bloomberg L.P. on October 31, 2008, or (ii) 80% of the lowest daily closing volume weighted average price as quoted by Bloomberg L.P. during the 5 trading days immediately preceding the date of conversion. In no event will Trafalgar be entitled to convert the Amended Debentures for a number of shares of our common stock in excess of that number of shares of our common stock, upon giving effect to such conversion, would cause the aggregate number of shares of our common stock beneficially owned by Trafalgar and its affiliates to exceed 9.99% of the outstanding shares of our common stock following such conversion without our approval. We may redeem the Amended Debentures provided that our common stock is trading below 100% of the volume weighted average price as quoted by Bloomberg L.P. on October 31, 2008 at the time we give Trafalgar the redemption notice, by paying the unpaid principal and interest accrued to such date and a prepayment premium of 15% redemption premium on the amount redeemed. We must redeem the entire principal amount outstanding on only one of the Amended Debentures on April 30, 2010 at a 15% redemption premium; there is no mandatory redemption requirement for the other Amended Debenture.Equipment

~~The~~Property ~~New Debenture matures on October 31, 2011~~ and ~~bears~~equipment anare ~~annual~~recorded ~~interest~~at ~~rate~~cost. ofExpenditures ~~10%~~for ~~compounded~~major ~~monthly~~additions ~~until~~and ~~the~~betterments ~~unpaid~~are ~~principal is paid~~capitalized. AnMaintenance ~~event~~and ofrepairs ~~default~~are ~~occurs~~charged ~~if: (i) we fail~~ to ~~pay~~operations ~~amounts~~as ~~due~~incurred. ~~under~~Depreciation ~~the New Debenture, (ii) our transfer agent fails to issue freely tradeable common stock to Trafalgar within three days~~ of ~~our~~property ~~receiving~~and aequipment ~~notice of conversion or exercise after our registration statement~~ is ~~declared~~computed ~~effective,~~by ~~(iii) we fail to comply with any of our other agreements in~~ the ~~New~~straight-line ~~Debenture~~method ~~for five business days~~ (after ~~receiving~~taking ~~notice to comply, (iv) we enter~~ into ~~bankruptcy~~account ortheir ~~become~~respective ~~insolvent,~~estimated orresidual (vvalues) weover ~~breach any of covenants under~~ the ~~securities~~assets ~~purchase~~estimated ~~agreement~~useful ~~and~~lives ~~do not cure within five business days~~ of ~~receiving~~10 ~~a written notice of the breach~~years. Upon ansale ~~event~~or ofretirement ~~default, Trafalgar may accelerate full repayment~~ of ~~the~~property ~~New Debenture outstanding~~ and ~~accrued interest thereon. Also~~equipment, ~~Trafalgar~~the isrelated ~~entitled,~~cost ~~at its option, to convert~~ and ~~sell~~accumulated ~~the~~depreciation ~~principal~~are ~~amount~~removed offrom the ~~New~~accounts ~~Debenture~~and ~~plus~~any ~~accrued~~gain ~~interest into shares of our common stock at the price per share equal to the lesser of (i) 100% of the volume weighted average price as quoted by Bloomberg L.P. on October 31, 2008,~~ or ~~(ii)~~loss 80% of the lowest daily closing volume weighted average price as quoted by Bloomberg L.P. during the five trading days immediately preceding the date of conversion. However, if we issue or sell shares of our common stock without consideration or for a consideration per share less than the bid price of our common stock determined immediately prior to its issuance, the conversion price will be reset to 85% of such sales price if the reset price is ~~lower~~reflected ~~than the conversion price. In no event will Trafalgar be entitled to convert the New Debenture for a number of shares of our common stock~~ in ~~excess of that number of shares of our common stock, upon giving effect to such conversion, would cause~~ the ~~aggregate~~consolidated ~~number~~statements of ~~shares of our common stock beneficially owned by Trafalgar and its affiliates to exceed 9~~operations.~~99%~~ ofLeasehold ~~the~~improvements ~~outstanding~~are ~~shares~~amortized of our common stock following such conversion without our approval. We may redeem the debentures provided that our common stock is trading below 100% of the volume weighted average price as quoted by Bloomberg L.P. on ~~October 31, 2008 at the time we give Trafalgar the redemption notice, by paying the unpaid principal and interest accrued to such date and~~ a ~~prepayment~~straight-line ~~premium~~basis ~~of 15% redemption premium on the amount redeemed. We must begin redeeming the New Debenture monthly beginning on January 31, 2010 by making equal payments of principal~~ over the term of the ~~New~~lease ~~Debenture plus any outstanding interest payments and at a 15% redemption premium on the principal redeemed each month. So long as any of the principal of~~ or ~~interest on~~ the ~~New~~estimated ~~Debenture~~useful ~~remains unpaid~~lives, wewhichever may not, without the prior consent of Trafalgar: (i) issue or sell shares of our common stock without consideration or for a consideration per share less than the bid price of our common stock determined immediately prior to its issuance, (ii) issue or sell any warrant, option, right, contract, call, or other security instrument granting the holder thereof, the right to acquire our common stock without consideration or for a consideration less than our common stock’s bid price value determined immediately prior to its issuance, (iii) enter into any security instrument granting the holder a security interest in any of our or our subsidiary’s assets, (iv) permit any of our subsidiaries to enter into any security instrument granting the holder a security interest in any assets of such subsidiary, (v) file any registration statement on Form S-8, or (vi) incur any additional debt or permit any of our subsidiaries to incur any additional debt without Trafalgar’s prior written consentis shorter.

~~Our~~Development ~~use~~Stage ofand ~~the~~Mineral ~~$1,000,000~~Property ~~received~~and ~~pursuant~~Exploration to the New Debenture will require the prior written approval of Trafalgar. Upon the disbursement of the $1,000,000 relating to the purchase of the New Debenture, we paid to Trafalgar one interest payment due on each of the three Debentures, which was paid directly from the proceeds of the closing for the Amended Transaction Documents.Costs

WeThe ~~agreed~~Company tohas ~~enter~~been ~~into~~in athe ~~“lock~~development ~~box”~~stage ~~agreement~~since ~~covering~~November ~~revenue~~4, ~~generated by us which shall be executed prior to May 21~~2004, ~~2008.~~as ~~Failure~~defined byin ~~our~~the ~~company~~Financial toAccounting ~~execute~~Standards ~~such~~Board (“~~lock box~~FASB”) ~~agreement~~Accounting isStandards ~~deemed~~Codification an(“ASC”) ~~event~~Topic of915 ~~default~~“Development ~~under~~Stage ~~Amended~~Entities”, ~~Transaction~~and ~~Documents~~has ~~including~~not ~~the~~yet ~~Debentures~~realized ~~and~~revenues ~~the~~from ~~Pledge~~its ~~and~~planned ~~Escrow Agreement~~operations. It Weis ~~have~~primarily ~~negotiated~~engaged in the ~~terms~~acquisition, ofexploration, ~~this~~and ~~agreement~~development ~~with~~of ~~Trafalgar~~oil and wegas ~~expect~~mineral ~~that the “lock box” agreement will be in place to receive first revenue~~properties.

~~The~~Mineral ~~original~~property ~~warrant~~exploration ~~issued~~costs byare usexpensed toas ~~Trafalgar~~incurred. ~~was~~When ~~amended~~it ~~and~~has ~~replaced~~been ~~such~~determined that ita ismineral ~~exercisable~~property ~~for~~can abe ~~total~~economically ofdeveloped ~~2,000,000~~as ~~shares~~a result of ~~common~~establishing ~~stock~~probable atand anthen ~~exercise~~proven ~~price~~reserves, ofthen ~~$0.001~~the ~~per~~costs ~~share.~~incurred ~~Also,~~to wedevelop ~~agreed~~such toproperty ~~register~~are ~~the~~capitalized. ~~shares~~Such ofcosts ~~common~~will ~~stock~~be ~~into~~amortized ~~which~~using the ~~warrant~~units-of-production ismethod ~~exercisable~~over ~~within~~the ~~thirty~~estimated ~~days~~life of ~~October~~the ~~31,~~probable-proven ~~2008,~~reserves. ~~subject~~If tomineral ~~compliance~~properties ~~with~~are ~~Rule~~subsequently ~~415~~abandoned asor ~~promulgated~~impaired, ~~under~~any ~~the~~capitalized ~~Securities~~costs ~~Act~~will ofbe ~~1933,~~charged asto ~~amended,~~operations. orThe ~~any~~Company ~~Rule~~has ~~415~~incurred ~~comments~~$17,000 orof ~~restrictions~~exploration ~~placed~~and byacquisition ~~the~~costs ~~Securities~~ and ~~Exchange~~$0 ~~Commission~~of ondevelopment ~~the~~costs ~~registration~~from ~~statement~~inception ~~for~~through ~~the~~August ~~shares~~31, ~~underlying the warrant~~2011.

WeGoodwill agreed to issue to Trafalgar 2,500,000 shares of common stock (issued). Also, we agreed to register such shares of common stock within thirty days of October 31, 2008, subject to compliance with Rule 415 as promulgated under the Securities Act of 1933, as amended, or any Rule 415 comments or restrictions placed by the Securities and ~~Exchange~~other ~~Commission~~Intangible ~~on the registration statement for such shares.~~Assets

WeGoodwill ~~entered~~represents ~~into a Pledge and Escrow Agreement with Trafalgar and James G. Dodrill II, P.A. as escrow agent, whereby we agreed to issue to Trafalgar an additional 15,000,000 shares of common stock (~~the ~~“Pledged~~excess Shares”), which shall serve as additional pledged property under the Security Agreement, as amended, between us and Trafalgar. The Pledged Shares were to be held by the escrow agent until the full payment of ~~all~~acquisition ~~amounts~~consideration ~~due~~paid toover ~~Trafalgar under~~ the ~~Debentures~~fair orvalue ~~the termination or expiration~~ of ~~the~~identifiable ~~Pledge~~net ~~and~~tangible ~~Escrow Agreement. Upon the occurrence of an event of default under the Debentures, the Securities Purchase Agreement, the Pledge~~ and ~~Escrow~~identifiable ~~Agreement,~~intangible ~~the~~assets ~~Security~~acquired. ~~Agreement~~Goodwill and ~~all~~ other ~~contracts~~indefinite-lived ~~between~~intangible usassets ~~and~~are ~~Trafalgar,~~not ~~Trafalgar will be entitled to receive physical delivery of the Pledged Shares~~amortized, ~~vote~~but ~~the~~are ~~Pledged~~reviewed ~~Shares,~~for toimpairment ~~receive~~at ~~dividends~~least ~~and other distributions thereon~~annually, toin ~~sell~~ the ~~Pledged~~third ~~Shares~~quarter, ~~and~~or toearlier ~~enjoy~~upon ~~all other rights and privileges incident to~~ the ~~ownership~~occurrence of ~~the~~certain ~~Pledged~~triggering ~~Shares~~events. ~~Upon full payment of all amounts due to Trafalgar under the Debentures, the Pledge Agreement and Trafalgar’s security interest and rights in and to the Pledged Shares will terminate.~~

~~Also~~Goodwill inis ~~connection~~allocated ~~with~~among ~~the~~and ~~Amended~~evaluated ~~Transaction~~for ~~Documents:~~impairment ~~(i)~~at wethe ~~gave~~reporting ~~Trafalgar~~unit ~~the~~level. ~~first~~Management ~~right~~evaluates ofgoodwill ~~refusal~~for toimpairment ~~provide~~using ~~additional~~a ~~funding~~two-step toprocess ~~us;~~provided ~~(ii)~~by weASC ~~agreed~~Topic to350 ~~enter~~“Intangibles ~~into~~— anGoodwill ~~exclusive~~and ~~investment~~Other”. ~~banking~~The ~~agreement~~first ~~with~~step ~~Trafalgar~~is ~~Capital~~to ~~Advisors,~~compare anthe ~~affiliate~~fair value of ~~Trafalgar,~~each ~~within~~of ~~ten~~our ~~business~~reporting ~~days~~units ofto ~~October~~their ~~31,~~respective ~~2008~~book values, ~~and~~including asgoodwill. ofIf the ~~date~~fair value of ~~this~~a ~~quarterly~~reporting ~~report~~unit exceeds its book value, wereporting ~~are~~unit ~~currently~~goodwill ~~negotiating~~is not considered impaired and the ~~terms~~second step of ~~this~~the ~~agreement~~impairment ~~with~~test ~~Trafalgar~~is ~~Capital~~not ~~Advisors;~~required. ~~(iii)~~If wethe ~~agreed~~book tovalue ~~pay~~of a ~~legal~~reporting ~~and~~unit ~~documentation~~exceeds ~~review~~its ~~fee~~fair value, the second step of the impairment test is performed to ~~James~~measure G.the ~~Dodrill~~amount IIof impairment loss, Pif any.A. ofThe ~~$7,500,~~second ~~which~~step ~~was~~of ~~paid~~the impairment ~~directly~~test ~~from~~compares the ~~proceeds~~implied fair value of the ~~closing~~reporting ~~for~~unit’s goodwill with the ~~Amended~~book ~~Transaction~~value ~~Documents;~~of ~~(iv)~~that wegoodwill. ~~entered~~If ~~into~~the abook ~~side~~value ~~letter~~of ~~agreement~~the ~~whereby~~reporting weunit’s ~~agreed~~goodwill toexceeds ~~redeem~~the ~~all~~implied fair value of ~~the~~that ~~Debentures~~goodwill, ifan weimpairment ~~successfully~~loss ~~complete~~is recognized in an ~~equity~~amount ~~financing~~equal ~~for~~to ~~gross~~that ~~amounts~~excess. The Company determined that the goodwill resulting from the acquisition of a1536692 ~~minimum~~Ontario Inc. of $5397,575 ~~million;~~was ~~and~~fully ~~(v)~~impaired weas ~~entered~~of ~~into~~February ~~irrevocable~~28, ~~transfer~~2011 ~~agent~~and ~~instructions~~charged ~~with~~the ~~our~~impairment ~~transfer~~to ~~agent~~operations.

WeImpairment ~~failed~~or toDisposal make most payments due to Trafalgar Capital Specialized Investment Fund, Luxembourg under the various loan arrangements (approximately $196,000 in scheduled principal, premium and interest repayments at February 28, 2010). We later were not in a position to repay the $1,250,000 principal due at the end of ~~April~~Long-Lived 2010 under a loan agreement with Trafalgar (which would have left $2,250,000 principal outstanding). We have also incurred trade creditor and direct salary related debt of over $1,000,000 to date for our operations in Kansas. Several of these key trade creditors have issued mechanical liens against our facilities in Kansas.Assets

AsThe aCompany ~~result,~~accounts infor ~~April~~the ~~30,~~impairment ~~2010,~~or wedisposal ~~and~~of ~~Trafalgar~~long-lived ~~entered~~assets ~~into~~according ~~amendment~~ to ~~the~~ASC ~~securities~~360 ~~purchase agreement~~“Property, ~~secured~~Plant ~~debenture, registration rights agreement~~ and ~~security~~Equipment”. ~~agreement,~~ASC ~~whereby~~360 ~~Trafalgar~~clarifies ~~agreed~~the toaccounting ~~extend~~for the ~~maturity~~impairment ~~date~~ of along-lived ~~secured~~assets ~~debenture~~and infor ~~the~~long-lived ~~principal~~assets ~~amount~~to ofbe ~~$1,250,000~~disposed ~~until October 31~~of, ~~2010~~including ~~from~~the ~~April~~disposal ~~30,~~of ~~2010.~~business Insegments ~~consideration~~and ~~for~~major ~~Trafalgar’s~~lines ~~agreeing to extend the maturity date~~ of ~~that~~business. ~~secured~~Long-lived ~~debenture,~~assets weare ~~released~~reviewed ~~15,000,000~~when ~~shares~~facts ofand ~~our~~circumstances ~~common~~indicate ~~stock~~that ~~from~~the ~~escrow~~carrying tovalue ~~Trafalgar~~of asthe ~~payment~~asset ofmay annot ~~extension~~be ~~fee~~recoverable. ~~These~~When ~~shares~~necessary, ~~were~~impaired ~~originally~~assets ~~intended~~are towritten ~~serve~~down asto ~~additional~~estimate ~~pledged~~fair ~~property~~value ~~under~~based on the ~~security~~best ~~agreement~~information ~~that~~available. weEstimated ~~entered~~fair ~~into~~value ~~with~~is ~~Trafalgar~~generally inbased ~~connection~~on ~~with~~either ~~the~~appraised ~~sale~~value ofor ~~the~~measured ~~debentures~~by todiscounting ~~Trafalgar~~estimated ~~and~~future incash ~~fact~~flows. ~~were~~Considerable ~~described~~management judgment byis ~~Trafalgar~~necessary asto ~~being~~estimate ~~made~~discounted ~~available~~future ~~for~~cash aflows. ~~CEF~~Accordingly, ~~type~~actual ~~arrangement~~results tocould ~~repay~~vary ~~creditors.~~significantly ~~This~~from ~~was~~such ~~later reneged on by Trafalgar~~estimates.

In addition, pursuant to the bill of sale and assignment in lieu of foreclosure and the certificate of seller, we sold and assigned to TCF Oil and Gas Corp., a Florida corporation owned by Trafalgar, all of our properties located in Ellsworth County, Kansas, including three oil and gas leases located in Ellsworth County, Kansas in consideration of the payment of $100 from TCF Oil and Gas to us and of the simultaneous execution by Trafalgar of a covenant not to sue us for an in personam judgment under the obligations evidenced or secured by the various loan documents between Trafalgar and us. TCF Oil and Gas did not assume our obligations and liabilities under the loan documents between Trafalgar and us and such obligations and liabilities remain our responsibility. In addition, this bill of sale and assignment does not restrict the right of Trafalgar as holder of such loan documents to enforce the same or to institute or proceed with foreclosure or any other remedial proceedings under the same. We also released Trafalgar from any claims arising out of the loans from Trafalgar14

InFox ~~consideration~~Petroleum ~~of the simultaneous execution by our company of the bill of sale and assignment in lieu of foreclosure and the certificate of seller, Trafalgar, FIS entered into the covenant not to sue~~Inc. ~~Pursuant to this covenant, Trafalgar agreed not to sue for an in personam judgment against our company under the various loan documents between our company~~ and ~~Trafalgar. Nevertheless, in connection with the enforcement of its rights under such loan documents, Trafalgar reserved the right to sue our company in rem.~~Subsidiaries

In addition, Trafalgar expressly reserved all rights of action, claims, and demands against any and all persons or entities, including without limitation any guarantor of any of the loans, indebtedness or obligations evidenced or secured by such loan documents other than our company, and expressly reserved all rights of action, claims and demands against and all persons or entities including our company under or arising out of or related to any mechanics’ liens and/or mechanics’ lien claims filed on, asserted against or related to any of the mortgaged properties (~~mostly~~A ~~three~~Development ~~oil~~Stage ~~and gas leases in Ellsworth County, Kansas and related properties~~Company) ~~from our company to Trafalgar. This instrument was not a release and does not operate to discharge any of the loans, indebtedness or obligations evidenced or secured by the loan documents.~~

OnNotes ~~September 20,2011 the company issued an 8% convertible note~~ to ~~Asher~~Consolidated ~~Enterprises~~Financial ~~Inc.in the aggregate principal amount of $45,000.~~Statements

~~PURCHASE~~August, ~~OF SIGNIFICANT EQUIPMENT~~2011

~~We do not intend to purchase any significant equipment during the next twelve months.~~(unaudited)

~~OFF-BALANCE~~Note ~~SHEET~~3 ~~ARRANGEMENTS~~– Summary of Significant Accounting Policies (Continued)

AsFair ofValue ~~the date~~ of ~~this~~Financial Quarterly Report, we do not have any 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 that are material to investors.Instruments

~~ITEM~~FASB 3ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ~~QUANTITIVE~~ ASC ~~AND~~820 ~~QUALITATIVE~~defines ~~DISCLOSURES~~fair ~~ABOUT~~value ~~MARKET~~as ~~RISK~~the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 states that a fair value measurement should be determined based on the assumptions the market participants would use in pricing the asset or liability. In addition, ASC 820 specifies a hierarchy of valuation techniques based on whether the types of valuation information (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

~~Our~~The ~~activities~~three ~~expose~~broad uslevels todefined aby ~~variety~~ASC of820 ~~financial~~hierarchy risks: market risk (including currency risk and cash flow); credit risk and liquidity risk. Our overall risk management program focuses on the unpredictability of the financial market and seeks to minimize potential adverse effects on our financial performance. We do not use derivative financial instruments to hedge these risks. Our subsidiaries are ~~exposed~~as ~~to financial risks that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.~~follows:

~~Interest~~Level ~~rate~~1 – quoted prices for identical assets or liabilities in active markets.

~~Interest~~Level ~~rates~~2 in– ~~the~~pricing ~~United~~inputs ~~States~~ are ~~generally~~other ~~controlled.~~than ~~Any~~quoted ~~potential~~prices ~~future loans will relate mainly to acquisition of properties and will be mainly short-term. However our debt may be likely to rise~~ in ~~connection~~active ~~with expansion and if interest rates were to rise at the same time~~markets, ~~this~~which ~~could have a significant impact on our operating and financing activities. We have not entered into derivative contracts to hedge existing risks for speculative purposes. We~~ are ~~exposed~~either todirectly ~~fluctuation~~or inindirectly ~~our~~observable ~~future~~as ~~cash~~of ~~flows~~the ~~arising~~reported ~~from changes in interest rates through its variable rate financial assets and liabilities~~date. ~~Other liabilities negotiated at a fixed rate expose us to fair value interest rate risk.~~

~~ITEM~~Level ~~4. CONTROLS~~3 ~~AND~~– ~~PROCEDURES~~valuations derived from methods in which one or more significant inputs or significant value drivers are unobservable in the markets.

~~EVALUATION~~These OFfinancial ~~DISCLOSURE~~instruments ~~CONTROLS~~are ~~AND~~measured ~~PROCEDURES~~using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

~~\We~~Fair ~~maintain~~value ~~“disclosure~~estimates ~~controls~~discussed ~~and~~herein ~~procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that~~ are ~~designed~~based toupon ~~ensure~~certain ~~that~~market ~~information~~assumptions ~~required to be disclosed in our Exchange Act reports is recorded, processed, summarized,~~ and ~~reported~~pertinent ~~within the time periods specified in the Securities and Exchange Commission rules and forms, and that such~~ information isavailable ~~accumulated and communicated~~ to ~~our~~ management, ~~including~~as ~~our~~of ~~Chief~~August ~~Executive Officer and Chief Financial Officer~~31, as2011. ~~appropriate,~~The torespective ~~allow~~carrying ~~timely~~value ~~decisions~~of ~~regarding~~certain ~~required~~financial ~~disclosure. We~~instruments ~~conducted~~approximated antheir ~~evaluation~~fair ~~(the~~values ~~“Evaluation”),~~due ~~under~~to the ~~supervision~~short-term ~~and~~nature ~~with the participation~~ of ~~our~~these ~~Chief~~instruments. ~~Executive~~These ~~Officer~~financial ~~(“CEO”)~~instruments ~~and~~include ~~Chief~~amounts ~~Financial~~due ~~Officer~~from ~~(“CFO”)~~affiliate, ofaccounts ~~the~~payable ~~effectiveness of the design~~ and ~~operation~~accrued ofexpenses ~~our disclosure controls~~ and ~~procedures~~amounts ~~(“Disclosure~~due ~~Controls”)~~to asofficer. ofThe ~~the~~fair ~~end~~value of the ~~period~~Company’s ~~covered~~notes bypayable ~~this~~is ~~report~~estimated ~~pursuant~~based ~~to Rule 13a-15 of the Exchange Act. Based~~ on ~~this~~current ~~Evaluation,~~rates ~~our CEO and CFO concluded~~ that ~~our~~would ~~Disclosure~~be ~~Controls~~available ~~were~~for ~~effective~~debt as of ~~the~~similar ~~end~~terms ofwhich ~~the~~is ~~period~~not ~~covered~~significantly bydifferent ~~this~~from ~~report~~its stated value.

~~Changes~~Revenue ~~in Internal Controls~~Recognition

WeThe ~~have~~Company ~~also~~recognizes ~~evaluated~~revenue ~~our~~on ~~internal~~arrangements ~~controls~~in ~~for~~accordance ~~financial~~with ~~reporting~~ASC Topic 605, ~~and~~“Revenue ~~there~~Recognition” (“ASC ~~have~~Topic ~~been~~605”). Under noASC ~~significant~~Topic ~~changes~~605, inrevenue ~~our~~is ~~internal~~recognized ~~controls~~only orwhen inthe ~~other~~price ~~factors~~is ~~that~~fixed ~~could~~and ~~significantly~~determinable, ~~affect~~persuasive ~~those~~evidence ~~controls~~of ~~subsequent~~an toarrangement exists, the ~~date~~service is performed and collectability of ~~their~~the ~~last~~resulting ~~evaluation~~receivable is reasonably assured. Revenue is recognized when the products are received and accepted by the customer.

~~Limitations~~Stock onBased ~~the Effectiveness of Controls~~Compensation

~~Our~~The ~~management,~~Company ~~including~~accounts ~~our~~for ~~CEO~~Stock-Based ~~and~~Compensation ~~CFO,~~under ~~does~~ASC ~~not~~718 ~~expect~~“Compensation ~~that~~– ~~our~~Stock ~~Disclosure~~Compensation”, ~~Controls~~which ~~and~~addresses ~~internal~~the ~~controls~~accounting ~~will~~for ~~prevent~~transactions ~~all~~in ~~errors~~which ~~and~~an ~~all~~entity ~~fraud.~~exchanges Aits ~~control~~equity ~~system,~~instruments nofor ~~matter~~goods ~~how~~or ~~well conceived and operated~~services, ~~can~~with ~~provide~~a ~~only~~primary ~~reasonable,~~focus ~~not~~on ~~absolute,~~transactions ~~assurance~~in ~~that~~which ~~the~~an ~~objectives~~entity ofobtains ~~the~~employee ~~control~~services ~~system~~in ~~are~~share-based ~~met~~payment transactions. ~~Further,~~ASC ~~the~~718-10 ~~design~~is of a ~~control~~revision ~~system~~to ~~must~~SFAS ~~reflect~~No. ~~the~~123, ~~fact~~"Accounting ~~that~~for ~~there~~Stock-Based ~~are resource constraints~~Compensation," and ~~the~~supersedes ~~benefits~~Accounting ofPrinciples ~~controls~~Board ~~must~~("APB") beOpinion ~~considered relative to their costs~~No. ~~Because~~25, of"Accounting ~~the~~for ~~inherent~~Stock ~~limitations~~Issued into ~~all control systems~~Employees," noand ~~evaluation~~its ofrelated ~~controls~~implementation ~~can~~guidance. ~~provide~~ASC ~~absolute~~718-10 ~~assurance~~requires ~~that~~measurement ~~all~~of ~~control~~the ~~issues~~cost ~~and instances~~ of ~~fraud,~~employee ifservices ~~any,~~received ~~within~~in ~~the~~exchange ~~Company~~for ~~have~~an ~~been~~award ~~detected.~~of ~~These~~equity ~~inherent~~instruments based ~~limitations~~on ~~include~~ the ~~realities that judgments in decision~~grant-~~making~~date ~~can~~fair bevalue ~~faulty, and that breakdowns can occur because~~ of athe ~~simple~~award ~~error~~(with orlimited ~~mistake~~exceptions). ~~Additionally,~~Incremental ~~controls~~compensation ~~can~~costs bearising ~~circumvented~~from bysubsequent ~~the~~modifications ~~individual acts~~ of ~~some~~awards ~~persons,~~after bythe ~~collusion~~grant ofdate ~~two~~must orbe ~~more people, or by management or board override of the control~~recognized.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.15

~~CEO~~Fox ~~and~~Petroleum ~~CFO~~Inc. ~~Certifications~~and Subsidiaries

Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (~~the~~A ~~Section~~Development ~~302~~Stage ~~Certifications~~Company). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

~~Audit~~Notes ~~Committee~~to ~~report~~Consolidated Financial Statements

~~Our~~August Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. We intend to establish an audit committee during fiscal year 2011. When established31, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.2011

~~PART II. OTHER INFORMATION~~(unaudited)

~~ITEM~~Note ~~1. LEGAL~~3 ~~PROCEEDINGS~~– Summary of Significant Accounting Policies (Continued)

~~Except~~Stock ~~for~~Based ~~claims,~~Compensation ~~if any, arising out of our letter of commitment with Senergy Limited~~ (~~as disclosed elsewhere in this Quarterly Report~~Continued) and trade creditor related debt for our operations in Kansas (as disclosed elsewhere in this Quarterly Report), we know of no material, existing or pending legal proceedings to which we are a party or of which any of our property is the subject.

~~Management~~The isCompany ~~not~~accounts ~~aware~~for ofstock-based ~~any~~compensation ~~other~~awards ~~legal~~to ~~proceedings~~non-employees ~~contemplated~~in byaccordance ~~any~~with ~~governmental~~ASC ~~authority~~505-50 or“Equity-Based ~~any~~Payments ~~other~~to ~~party~~Non-Employees” ~~involving~~("ASC us505-50"). orUnder ~~our~~ASC ~~properties.~~505-50, Asthe ofCompany determines the ~~date~~fair value of ~~this~~the ~~Quarterly~~warrants ~~Report,~~or nostock-based ~~director,~~compensation ~~officer~~awards orgranted ~~affiliate~~as iseither ~~(i)~~the afair ~~party~~value ~~adverse~~of tothe usconsideration inreceived ~~any~~or ~~legal~~the ~~proceeding~~fair value of the equity instruments issued, orwhichever ~~(ii)~~is ~~has~~more anreliably ~~adverse~~measurable. ~~interest~~Any stock options issued to usnon-employees are recorded in ~~any~~expense ~~legal~~and ~~proceedings.~~additional ~~Management~~paid-in iscapital ~~not~~in ~~aware~~shareholders' ofequity/(deficit) ~~any~~over ~~other~~the ~~legal~~applicable ~~proceedings~~service ~~pending~~periods orusing ~~that~~variable ~~have~~accounting ~~been~~through ~~threatened~~the ~~against~~vesting usdates orbased ~~our~~on ~~properties~~the fair value of the options at the end of each period.

~~ITEM~~The ~~1A. RISKS~~Company ~~FACTORS~~has not adopted a stock option plan and has not granted any stock options as of August 31, 2011.

NoIncome ~~report required.~~Taxes

~~ITEM~~Income 2taxes are accounted for under the liability method of accounting for income taxes. ~~UNREGISTERED~~ Under ~~SALES~~the OFliability ~~EQUITY~~method, ~~SECURITIES~~future ~~AND~~tax ~~USE~~liabilities OFand ~~PROCEEDS~~assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

~~Share~~The ~~Exchange~~FASB ~~Agreements~~has issued ASC 740 “Income Taxes” (formerly, Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” – An Interpretation of FASB Statement No. 109 (FIN 48)). ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

~~Effective~~As ~~July~~a ~~15,~~result ~~2011,~~of ~~we entered into~~ the ~~Ontario~~implementation ~~Share Exchange Agreement and the Resource Share Exchange Agreement. In accordance with the terms and provisions~~ of ~~the~~this ~~Ontario Share Exchange Agreement~~standard, ~~we acquired one hundred percent (100%) of~~ the ~~total~~Company ~~issued~~performed ~~and~~a ~~outstanding~~review ~~shares~~ of ~~common~~its ~~stock~~material oftax ~~Ontario~~positions ~~helld of record by the Ontario Shareholders~~ in exchange for issuance of an aggregate 1,750,000 shares of our restricted common stock to the Ontario Shareholders. The shares of common stock were issued to the Ontario Shareholders under Regulation S of the Securities Act. In accordance with ~~the~~recognition ~~terms~~ and ~~provisions~~measurement ofstandards ~~the~~established ~~Resource~~by ~~Share~~FASB ~~Exchange~~ASC ~~Agreement,~~740 weand ~~acquired~~concluded ~~one~~that ~~hundred~~the ~~percent~~tax ~~(100%)~~position of the ~~total~~Company ~~issued~~has ~~and~~not ~~outstanding~~met ~~shares of common stock of Resource helld of record by~~ the ~~Resource~~more-likely-than-not ~~Shareholders~~threshold inas ~~exchange for issuance~~ of anAugust ~~aggregate 1~~31,~~750,000~~ ~~shares of our restricted common stock to Resource Shareholders~~2011. ~~The shares of common stock were issued to the Resource Shareholders under Regulation S of the Securities Act.~~

~~Effective~~Foreign ~~July~~Currency 15, 2011, the Board of Directors of Fox Petroleum, Inc., a corporation organized under the laws of the State of Nevada (the “Company”) authorized the execution of that certain share exchange agreement dated July 15, 2011 (the “Ontario Share Exchange Agreement”) among the Company, 1536692 Ontario Inc., a private corporation duly registered under the laws of the Province of Ontario, Canada (“Ontario”) and the shareholders of Ontario (the “Ontario Shareholders”). In accordance with the terms and provisions of the Ontario Share Exchange Agreement: (i) the Ontario Shareholders tendered all of their shares held of record, which constituted one hunred percent (100%) of the total issued and outstanding shares of Ontario, to the Company; (ii) the Company issued to the Ontario Shareholders 1,750,000 shares of its restricted common stock; and (iii) the Company assumed a debt due and owing by Ontario to Davfam Investments (1998) Ltd. in the amount of $225,000, which debt was incurred by Ontario during fiscal years 2002 through 2005 . Ontario is the owner of a scrap plastic processing plant with certain equipment, fixtures and improvements and assets located in Hamilton, Ontario, Canada. Ontario is a wholly-owned subsidiary of the Company as a result of the Ontario Share Exchange Agreement.Translation

~~Amendment~~The tounaudited ~~Articles~~consolidated financial statements are presented in United States dollars. In accordance with ASC 830 ‘‘Foreign Currency Matters’’, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of ~~Incorporation~~exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. Translation adjustments are included in Accumulated Other Comprehensive Income (Loss).

~~Effective~~Basic ~~August~~and ~~31,~~Diluted ~~2011,~~Income ~~Fox Petroleum, Inc., a corporation organized under the laws of the State of Nevada~~ (~~the “Company”~~Loss) ~~filed~~Per an amendment to its Articles of Incorporation (the “Amendment”) to increase the Company’s authorized capital structure to 500,000,000 shares consisting of 450,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001.Share

The ~~Amendment~~Company ~~was~~computes ~~approved~~income by(loss) ~~the~~per ~~Board~~share ofin ~~Directors~~accordance bywith ~~unanimous~~ASC ~~written~~260, ~~consent~~"Earnings ~~resolutions~~per ~~dated~~Share", ~~August~~which ~~31,~~requires ~~2011~~presentation ~~signed~~of byboth ~~all~~basic and diluted earnings per share (“EPS”) on the ~~members~~face of the ~~Board~~statement of ~~Directors~~operations. Basic ~~The~~EPS ~~Amendment~~is ~~was~~computed ~~subsequently~~by ~~approved~~dividing byincome ~~certain~~(loss) available to common shareholders ofby the ~~Company~~weighted ~~holding~~average anumber ~~majority~~ of shares outstanding during the ~~total~~period. Diluted ~~issued~~EPS ~~and~~gives ~~outstanding~~effect to all dilutive potential shares of common stock ofoutstanding during the ~~Company~~period byusing ~~written~~the ~~consent~~treasury ~~resolutions~~stock ~~dated~~method ~~August~~and 31convertible preferred stock using the if-converted method. In computing diluted EPS, ~~2011~~the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.

~~ITEM 3. DEFAULTS UPON SENOIR SECURITIES~~16

NoFox ~~report~~Petroleum ~~required~~Inc. and Subsidiaries

~~ITEM 4. SUBMISSION OF MATTERS TO~~ (A ~~VOTE~~Development OFStage ~~SECURITY HOLDERS~~Company)

NoNotes ~~report~~to ~~required.~~Consolidated Financial Statements

~~ITEM~~August ~~5. OTHER~~31, ~~INFORMATION~~2011

~~No report required.~~(unaudited)

~~ITEM~~Note ~~6. EXHIBITS~~3 – Summary of Significant Accounting Policies (Continued)

~~Exhibits:~~Basic and Diluted Income (Loss) Per Share (Continued)

31Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.1 As ~~Certification~~of August 31, 2011 and 2010, there were 2,000,000 and 2,970,888 warrants outstanding, respectively, and $3,500,000 of ~~Chief~~convertible ~~Executive~~debentures ~~Officer~~payable ~~pursuant~~which toare ~~Securities~~convertible ~~Exchange~~at ~~Act~~the option of ~~1934~~the ~~Rule~~note ~~13a-14(a~~holder at the rate of the lesser of i) or100% ~~15d-14~~of the volume weighted average stock price (a“VWAP”) on the date of issuance and ii) at 85% of the lowest daily closing VWAP as quoted by Bloomberg L.P. during the 5 trading days immediately preceding the conversion date. At August 31, 2011, there were 50,000,000 shares of preferred stock outstanding convertible into 1,000,000,000 shares of common stock. However, these potentially dilutive shares are considered to be anti-dilutive and are therefore not included in the calculation of net loss per share.

~~31.2~~Segment ~~Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).~~Information

~~32.1~~In ~~Certifications~~accordance ~~pursuant~~with tothe ~~Securities~~provisions ~~Exchange Act~~ of ~~1934~~ASC ~~Rule 13a~~280-~~14(b)~~10, or“Disclosures ~~15d-14(b)~~about ~~and~~Segments 18of ~~U.S.C.~~an ~~Section~~Enterprise ~~1350~~and Related Information”, asthe ~~adopted~~Company ~~pursuant~~is required to ~~Section~~report ~~906~~financial ofand ~~the~~descriptive ~~Sarbanes-~~information ~~Oxley~~about ~~Act~~its reportable operating segments. The Company operates in only one operating segment as of ~~2002~~August 31, 2011.

Accounting Standards Codification

In September 2009, the Financial Accounting Standards Board (“FASB”) issued ASC 105, formerly FASB Statement No. 168, the FASB Accounting Standards Codification (“Codification”) and the Hierarchy of Generally Accepted Accounting Principles (“GAAP”), a replacement of FASB Statement No. 162 (“SFAS 168”). SFAS 168 establishes the Codification as the single source of authoritative GAAP in the United States, other than rules and interpretive releases issued by the SEC. The Codification is a reorganization of current GAAP into a topical format that eliminates the current GAAP hierarchy and establishes instead two levels of guidance — authoritative and non-authoritative. All non-grandfathered, non-SEC accounting literature that is not included in the Codification will become non-authoritative. The FASB’s primary goal in developing the Codification is to simplify user access to all authoritative GAAP by providing all the authoritative literature related to a particular accounting topic in one place. The Codification was effective for interim and annual periods ending after September 15, 2009. As the Codification was not intended to change or alter existing GAAP, it did not have a material impact on the Company’s consolidated financial statements.

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements, if adopted, will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to August 31, 2011 through the date these financial statements were issued.

Note 4 – Property and Equipment

Property and equipment consisted of the following at August 31 and February 28, 2011:

	August 31,			February 28,
	2011			2011

Plant and machinery	$	215,768		$	215,945
Less: accumulated depreciation		(190,595	)		(179,954	)

Property and equipment, net	$	25,173		$	35,991

Depreciation expense for the six months ended August 31, 2011 and 2010 was $10,796 and $1,686, respectively.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 5 – Oil and Gas Interests

The Company has oil and gas interests in the North Sea and the United States and has not yet determined whether these properties contain reserves that are economically recoverable. Oil and gas interests consisted of the following at August 31 and February 28, 2011:



	August 31 and February 28, 2011
	United			United
	States			Kingdom			Total

Unproved properties:
acquisition costs	$	3,701,871		$	23,439		$	3,725,310
exploration costs		2,347,394			4,084,668			6,432,062

		6,049,265			4,108,107			10,157,372

Less: Write-down of oil & gas interests		(5,938,576	)		(4,108,107	)		(10,046,683	)
Less: Incidental revenue		(110,689	)		-			(110,689	)

	$	-		$	-		$	-

During the quarter ended August 31, 2010, the Company decided to no longer continue with exploration activities in these interests and is exploring alternatives of disposing of its existing interests in the North Sea and the United States.

North Slope, Alaska, United States

On May 29, 2007, the Company entered into a Lease Purchase and Sale Agreement with a company to acquire a combined 100% working interest in 12 state-issued oil and gas leases in the North Slope of Alaska. These leases are subject to a royalty of 16.66667% to the State of Alaska and a private royalty equal to 5% of net revenue. In consideration for the oil and gas leases, the Company issued 4,000,000 restricted common shares of the Company valued at $1,001,702, the transferor’s historical cost. The valuation is based the SEC Staff Accounting Bulletin, Topic 5, G.

Pursuant to underlying agreements on the property, the Company is obligated to drill one test well to at least 10,000 feet on or before November 14, 2011, four test wells to at least 4,000 feet on or before February 20, 2012, and one test well to at least 4,000 feet on or before January 16, 2012. The Company is currently unable to quantify an estimate of the cost of these wells.

By a purchase agreement dated October 10, 2007 and amended November 2, 2007, the Company acquired 8 additional oil and gas leases in the North Slope of the State of Alaska for $850,000 including cash of $250,000 and $600,000 paid by the issuance of 80,000 common shares of the Company. The fair value of the shares issued was $964,000 (based on the quoted market price of the Company’s common shares on the transaction date) and consequently a further $364,000 has been recorded for this portion of the purchase agreement. These leases are subject to a royalty of 16.66667% to the State of Alaska and a private royalty equal to 5%. Two of the leases acquired pursuant to this agreement are part of the Cook Inlet project described below.

On January 30, 2009, the Company entered into an agreement with the original lease vendors (the “Payers”) regarding twelve of the North Slope oil and gas leases (the “Twelve Leases”). Under the terms of the Agreement, the Payers agreed to use their best efforts to make, on the Company's behalf, annual rental payments for the Twelve Leases totaling up to $64,980 on or before the February 1, 2009 due date.

The Company agreed to repay to the Payers by March 2, 2009 any portion of the Payments made by the Payers (the "Repayment Amount"). The Repayment Amount is subject to an 18% interest rate per annum. The Company also granted the Payers a security interest in the Company's right, title, and interest in the Twelve Leases. The Company further agreed to transfer and assign its right, title, and interest in the Twelve Leases to the Payers in the event of the Company's failure to pay the Repayment Amount in a timely manner.

The Company failed to pay the Repayment Amount and by an agreement dated May 14, 2009, the Payers agreed to extend the repayment date until August 14, 2009 in return for the lease assignment documents for the Twelve Leases being executed and delivered into escrow.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 5 – Oil and Gas Interests (Continued)

North Slope, Alaska, United States (Continued)

The Company entered into an agreement dated May 16, 2009 with the Payers in respect of five of the remaining North Slope oil and gas leases (the “Five Leases”). Pursuant to this agreement, the Payers made annual lease payments totaling $25,126 for the Five Leases on behalf of the Company. The amount paid on behalf of the Company is subject to an 18% interest rate per annum. The Company also executed an assignment to the Payers of the Company's right, title, and interest in the Five Leases to be delivered into escrow in the event the Company fails to repay the payers by August 14, 2009.

The Company could provide no assurance that it would be able to obtain financing arrangements to repay the Payers by August 14, 2009 and consequently, all costs incurred of $2,401,282 were written off on the statement of operations during the year ended February 28, 2009. During the years ended February 28, 2010, the Company failed to repay the Payers by the due date and assignment of the related leases to the Payers was triggered. Consequently, the fees were no longer payable and outstanding lease fees and accrued interest of $98,400 were recorded as a gain on recovery of payables.

Anglesey, North Sea, United Kingdom

Pursuant to a farm-in agreement dated June 8, 2007, the Company agreed to acquire a 33.33% interest in two UK petroleum production licenses (“Licenses”). The Licenses are located in the UK North Sea and have since been merged into one traditional license. As consideration for the Licenses, the Company agreed to fund 100% of the seismic costs and its 33.33% share of the License budget costs as agreed by the parties. The Company also has the option to acquire an additional 26.67% interest in the Licenses by paying an additional 46.67% of the dry-hole costs of an exploration well.

The option is effective from completion of the transfer of the assigned interest to the Company and shall continue to be valid and exercisable until 28 days after receipt by the Company of the processed seismic data and final interpretation.

During the year ended February 28, 2010, the Company returned the Licenses to the UK government and consequently all costs incurred of $2,512,856 were written-off on the statement of operations during the year ended February 28, 2010.

Spears Gas Well, Texas, United States

Pursuant to a subscription agreement dated October 9, 2007, the Company acquired a 22.5% joint venture interest in a gas well called the Spears Gas Unit 2, Well #1 in the Gomez Field, Pecos County, Texas in consideration for US$500,000.

As at August 31 and February 28, 2011, the gas well is shut-in awaiting further financing.

Cook Inlet, Alaska, United States

By a purchase agreement dated October 10, 2007, the Company acquired 6 oil and gas leases located in Cook Inlet of the State of Alaska for $750,000, payable in installments on or before March 7, 2008. At February 28, 2008, the Company had paid $750,000. Included in these leases were 3 unissued leases that the vendors owned the rights thereto. The leases are subject to a royalty of 16.66667% to the State of Alaska and a private royalty equal to 5% of net revenue.

Subsequent to February 28, 2009, the Company entered into an agreement dated May 29, 2009 with the Payers in respect of these three oil and gas leases (the “Three Leases”). Pursuant to this agreement, the Payers made annual lease payments totaling $25,780 for the Three Leases on behalf of the Company. The amount paid on behalf of the Company is subject to an 18% interest rate per annum. The Company also executed an assignment to the Payers of the Company's right, title, and interest in the Five Leases to be delivered into escrow in the event the Company fails to repay the payers by August 14, 2009.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 5 – Oil and Gas Interests (Continued)

Cook Inlet, Alaska, United States (Continued)

The Company could provide no assurance that it would be able to obtain financing arrangements to repay the Payers by August 14, 2009 and consequently, all costs incurred of $1,061,727 were written-off on the statement of operations during the year ended February 28, 2009. During the years ended February 28, 2010, the Company failed to repay the Payers by the due date and the assignment of the related leases to the Payers was triggered. Consequently, outstanding lease fees and accrued interest of $26,743 were recorded as a gain on write off of amounts payable.

Bourbon, North Sea, United Kingdom

On November 16, 2007, the Company entered into a farm-out agreement dated November 8, 2007 wherein the Company would be assigned a total of 46% interest in a license block in the UK North Sea. In consideration for the assignment, the Company must pay for 89% of the cost of drilling and exploration well.

The Company is also required to pay for 46% of license costs. On January 24, 2008, the Company agreed to jointly participate with another company to identify a potential farm-in or acquisition opportunity and transferred a 4.6% carried interest in the license block to that company until a full development plan is approved by the U.K. government. Thereafter, that company will be responsible for its 4.6% share of the costs (10% of the Company’s interest). Subsequent to the transfer, this company became related to the Company as two of its beneficial owners became directors of the Company.

During the year ended February 28, 2009, the license holders terminated the Farm-out agreement effective February 27, 2009. Consequently, all costs incurred of $1,419,627 were written off on the statement of operations during the year ended February 28, 2009.

Geneseo-Edwards, Kansas, United States

By a letter agreement dated February 27, 2008, the Company purchased an 80% net revenue interest in three oil leases in Ellsworth County, Kansas, USA by the payment of $80,000. The leases are subject to a landowner royalty of 12.5% and an overriding royalty of 7.5% retained by vendors. The Company was required to drill at least one well on each lease before the leases expire on November 19, 2008, November 19, 2009 and November 30, 2009 or pay the vendor a penalty of $150,000.

During the year ended February 28, 2009 the Company had drilled four wells on these leases and earned incidental revenue of $90,689 from two of these wells, which was credited against oil and gas interests on the consolidated balance sheet as a result of the wells not yet reaching full commercial production. Since January 2009 production has been suspended due to the need for implementation of water disposal facilities for which further funding is not currently available.

During the year ended February 28, 2009, two trade creditors issued mechanical liens against the oil and gas leases and its facilities for non-payment of outstanding invoices totaling $528,079.

During the year period ended February 28, 2010, the Company assigned its interest in these oil and gas leases to a creditor in return for a loan rescheduling (Note 5) and entering into an agreement not to sue the Company for defaulting on a loan agreement. The creditor also received 15,000,000 common shares pledged as security from the Company’s treasury against the notes payable.

Pursuant to the above, costs incurred of $1,975,567 were written-off on the statement of operations and deficit for the year ended February 28, 2009 leaving a net book value of $20,000 recovered during the year period ended February 28, 2010 for the sale of certain furniture and equipment held for use on the property.

UK Onshore, United Kingdom

On June 3, 2008, the Company was granted a 90% interest in four UK petroleum production licenses, located in the south of England. In order to maintain the licenses, the Company must undertake seismic exploration estimated to cost $500,000 within the six year term of the license.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 5 – Oil and Gas Interests (Continued)

UK Onshore, United Kingdom (Continued)

Pursuant to a letter agreement dated September 5, 2008, the Company will pay 100% of all costs, expenses, liabilities and obligations arising in respect of operations conducted in respect of each license block until a filed development plan is formally approved by the UK Secretary of State responsible for such matters, for the development of a discovery of petroleum in the blocks. Thereafter, the Company will each be responsible for 90% of all costs, expenses, liabilities and obligations.

25th Round License Blocks 13/17 & 210/20e, United Kingdom

Pursuant to a letter agreement dated September 5, 2008, the Company was granted a 90% interest in an application made for four UK petroleum production licenses. In order to maintain the licenses, the Company must carry out geological and seismic modeling before forming up a drilling location and must begin drilling within the four year term of the license.

Pursuant to the letter agreement, the Company will pay 100% of all costs, expenses, liabilities and obligations arising in respect of operations conducted in respect of each license block until a filed development plan is formally approved by the UK Secretary of State responsible for such matters, for the development of a discovery of petroleum in the blocks. Thereafter, the Company will each be responsible for 90% of all costs, expenses, liabilities and obligations.

On November 12, 2008, the Company was formally notified by the UK Department of Energy and Climate Change (DECC) of its success in the 25th Seaward Licensing Round Awards, the rights to explore and develop the block 13/17 concession in the North Sea by the UK government.

On May 1, 2009, the Company received notification from the UK Department of Energy and Climate Change that this Secretary of State’s offer of this license in the 25th round had been withdrawn due to fact that they consider there to have been a material change in the circumstances relating to the Company having adequate funding arrangements already in place. Consequently, all costs incurred of $87,354 were written-off on the statement of operations and deficit for the year ended February 28, 2009.

Note 6 – Notes Payable

Notes payable at August 31 and February 28, 2011 consisted of:

	August 31,		February 28,
	2011		2011

Debenture payable	$	4,412,333	$	4,412,333
Promissory notes, net of discount		458,000		481,599
Loan agreement		450,000		450,000
Notes payable, related parties		5,019		196,468

	$	5,325,352	$	5,540,400

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 6 – Notes Payable (Continued)

Debentures Payable

Debentures payable consisted of the following at August 31 and February 28, 2011:

	August 31,			February 28,
		2011			2011

Convertible debentures payable	$	3,500,000		$	3,500,000
Liquidating damages		912,333			912,333
Financing costs		(75,545	)		(75,545	)
Amortization of financing costs		75,545			75,545

	$	4,412,333		$	4,412,333

Pursuant to an Amendment to Securities Purchase Agreement, Secured Debenture, Registration Rights Agreement and Security Agreement dated October 31, 2008 ("Amendment Agreement"), the Company amended a Securities Purchase Agreement, Debentures, a Registration Rights Agreement, an Escrow Agreement and a Pledge and Escrow Agreement ("Original Agreements") all originally dated June 24, 2008. Under the Amendment Agreement the Company issued three secured convertible debentures totaling $3,500,000 consisting of two “Amended Debentures” and one “New Debenture”:

(i) Amended Debentures - $2,500,000

The Original Debenture which was a $2,500,000 senior secured convertible note was amended on November 11, 2008 into two debentures each of which are for a total principal amount of $1,250,000 (the “Amended Debentures).

The Amended Debentures bear interest at 10% per annum, compounded monthly. The principal and any unpaid accrued interest owing on the debentures are convertible into common stock of the Company in the event of a default or at the option of the holder at the rate of the lesser of i) 100% of the volume weighted average stock price (“VWAP”) on the date of issuance and ii) at 85% of the lowest daily closing VWAP as quoted by Bloomberg L.P. during the 5 trading days immediately preceding the conversion date. The Amended Debentures also contain a redemption option whereby the Company can redeem the Amended Debentures provided its common stock is trading below 100% of the VWAP as quoted by Bloomberg L.P on October 31, 2008 by paying the unpaid principal and interest accrued and a prepayment premium of 15%. The Company must redeem the entire principal amount outstanding on one of the Amended Debentures on April 30, 2009 at a 15% redemption premium; however, there is no mandatory redemption premium on the second Amended Debenture.

In consideration for the holder's agreement to extend the maturity date of the original convertible debt from October 24, 2008 to April 30, 2009, the Company cancelled the original 500,000 warrants issued in connection with the Original Debenture and replaced them with 2,000,000 warrants with a term of 5 years and a decreased exercise price of $0.001 .

The exercise price is subject to an adjustment if, during the term of the warrants, the Company issues shares, options or convertible securities for consideration less than the exercise price, then the exercise price will be adjusted to 85% of such consideration. Additional warrants will be issued if the Company becomes in default under the transaction agreements.

The Company determined the allocation of the net proceeds of the Original convertible debenture based on the relative fair value of the convertible debenture, the 500,000 share purchase warrants and the 200,000 common shares. The fair value of the warrants of $910,000 and the common shares of $580,000 were determined using the Black-Scholes valuation model and the quoted market price of the shares on the date of issuance, respectively.

The resulting discount of $839,292 was being accreted over the term of the debenture. The assumptions used in the Black-Scholes calculation are as follows: expected life – 5 years; volatility – 78.26%; Dividend rate – 0%; and risk free interest rate is 0.95%.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 6 – Notes Payable (Continued)

Debentures Payable (Continued)

(i) Amended Debentures - $2,500,000 (Continued)

The Company recorded a beneficial conversion feature of $1,388,320 with respect to the Original Debentures pursuant to EITF 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios. The conversion feature was contingently exercisable in an event of default of the debenture; which occurred on October 24, 2008 when the debenture came due but was not repaid by the Company. Therefore the amount was recorded as a financing fee during the year ended February 28, 2009.

The Company determined the allocation of the net proceeds of the Amended Debentures based on the relative fair value of the convertible debenture, the share purchase warrants and the common shares. The fair value of the warrants of $1,578,000 and the common shares of $1,975,000 were determined using the Black-Scholes valuation model and the quoted market price of the shares on the date of issuance, respectively. The resulting discount of $1,736,200 was being accreted over the term of the debentures. The assumptions used in the Black-Scholes calculation are as follows: expected life – 5 years; volatility – 78.26%; Dividend rate – 0%; and risk free interest rate is 3.52%.

The Company was required to pay to the investor at closing of the Original Agreements: $17,500 in legal costs, a $10,000 due diligence fee, a 7% commitment fee and a 2% facility fee, 500,000 share purchase warrants and 200,000 shares of common stock. Finder’s fees of $150,000 and 52,265 share purchase warrants were paid to Partners Consulting in connection with the Original Agreements pursuant to a finder agreement dated February 15, 2008. This amount is included in fees payable in stock and warrants at May 31, 2010 and February 28, 2010. The warrants expire three years from the date of issuance.

At the closing of the Amended Debentures, the Company also issued 2,500,000 shares of common stock.

In no event shall the Holder be entitled to convert this Debenture for a number of shares of Common Stock in excess of that number of shares of Common Stock which, upon giving effect to such conversion, would cause the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates to exceed 9.99% of the outstanding shares of the Common Stock following such conversion without the approval of the Company.

Upon the occurrence of an Event of Default by the Company, the Holder has the option to elect that the interest due and payable be paid in cash or in stock at the rate of 85% of the lower of: (i) the VWAP on the date the interest payment is due; or (ii) if the interest payment is not made when due, the VWAP on the date the interest payment is made.

The Debentures are secured by all of the assets and property of the Company and its subsidiaries pursuant to a Security Agreement. The debentures were further secured by a Pledge and Escrow Agreement pursuant to which 15,000,000 common shares of the Company to be held in escrow on behalf of the investor.

Further, the debenture is subject to a currency adjustment clause whereby the exchange rate between the US Dollar and the Euro will be fixed at the date of closing and if the exchange rate moves unfavorably for the holder of the debenture, the Company will be required to adjust conversion and redemption rates to compensate the holder for any such loss.

The debenture also contains certain restrictions on the Company for new share or debt issuances as long as any principal or interest amount remains outstanding on the debenture.

As at August 31, 2011, the Company had not repaid the $1,250,000 debenture that matured on April 30, 2009.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 6 – Notes Payable (Continued)

Debentures Payable (Continued)

(ii) New Debenture - $1,000,000

The New Debenture and has a principal amount of $1,000,000 and matures on October 31, 2010 (the “New Debenture”). The New Debenture bears interest at a rate of 10% per annum compounded monthly. The principal and any unpaid accrued interest owing on the debentures are convertible into common stock of the Company in the event of a default or at the option of the holder at the rate of the lesser of i) 100% of the volume weighted average stock price on the date of issuance and ii) at 85% of the lowest daily closing VWAP as quoted by Bloomberg L.P. during the 5 trading days immediately preceding the conversion date.

The Company may redeem any or all of the New Debenture at any time, provided that the Common Stock is trading below the Fixed Price at the time the Company gives the Holder the redemption notice, by paying the unpaid principal and interest accrued and a prepayment premium of 15% redemption premium on the amount redeemed. In any case, the Company must redeem the $1,000,000 debenture maturing October 31, 2010 in equal monthly installments commencing January 31, 2009 until maturity at a 15% redemption premium.

At the closing of the New Debentures the Company incurred: $7,500 in legal costs, a $45,000 commitment fee, a $1,000 due diligence fee

The Company recorded a beneficial conversion feature of $1,710,300 with respect to the Original Debentures. The amount was being amortized over the term of the debentures, however after an event of default (see below), the entire amount was immediately recognized into income as a financing fee during the year ended February 28, 2009.

Pursuant to the securities purchase agreement, the Company entered into a freestanding investor registration rights agreement dated June 24, 2008 and amended October 31, 2008. Under the terms of this agreement, the Company must have registered at least three (3) times the number of shares which are anticipated to be issued upon conversion of the Debentures issued and shares of common stock issuable to the purchaser upon exercise of the warrants. The Company has the obligation to use their best efforts to keep the registration of these securities effective by the SEC until all of the securities had been sold by the purchaser. Failure to meet this obligation would result in the Company incurring liquidated damages in the amount of 2% of the liquidated value of the debentures for each 30 day period registration of the securities is not effective.

Under the provisions of FSP EITF 00-19-2 “Accounting for Registration Payment Arrangements (“EITF 00-19-2”), the Company is required to separately recognize and measure a contingent obligation in respect of the liquidating damages in accordance with FASB No.5 “Accounting for Contingencies” and FSB Interpretation No.14 “Reasonable Estimation of the Amount of a Loss”. At August 31, 2011, an amount of $912,333 (February 28, 2011 - $912,333) has been recognized as the Company has determined that a loss is probable because the Company has failed to maintain effectiveness of its registration statement.

During the year ended February 28, 2009, the Company failed to make any of the required redemption payments on the New Debenture. This triggered a default, which resulted in all of the debentures immediately becoming due and payable and the remaining discounts on the debentures were immediately recognized in income.

As consideration for entering into negotiations to effect a loan rescheduling and the holder entering into an agreement not to sue, the Company assigned its interest in certain oil and gas leases to the holder (Note 5). During the year ended February 28, 2010, the holder also received the 15,000,000 common shares pledged as security against for debentures valued at $4,650,000, based on the quoted market price of the Company’s common shares on the date they were released from escrow.

Included in accrued interest at August 31, 2011 is $975,000 (February 28, 2011 - $800,000) for accrued interest and redemption premiums on these debentures payable.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 6 – Notes Payable (Continued)

Promissory Notes

On April 2, 2008 the Company was loaned $250,000 by the issuance of a promissory note, to be paid on the earlier of (i) the date that the Company obtains equity financing from a third party in the minimum amount of $1,000,000 net to the Company, or (ii) April 1, 2009. For the period from the date of advance of the loan up to and including the date that the loan is repaid, interest will accrue on the balance of principal outstanding at the rate of 10% per annum, compounded monthly. Interest will be payable in a balloon payment on the date the loan is repaid. The note is unsecured. As of May 31, 2010, this loan has not been repaid as the lender has agreed to extend the terms of the loan until the Company is able to obtain further financing.

On May 6, 2008 the Company was loaned $150,000 by the issuance of a promissory note, to be paid on the earlier of (i) the date that the Company obtains equity financing from a third party in the minimum amount of $1,000,000 net to the company, or (ii) May 1, 2009. For the period from the date of advance of the loan up to and including the date that the loan is repaid, interest will accrue on the loan on the balance of principal outstanding at the rate of 10% per annum, compounded monthly. Interest will be payable in a balloon payment on the date the loan is repaid. The note is unsecured. As of May 31, 2010, this loan has not been repaid as the lender has agreed to extend the terms of the loan until the Company is able to obtain further financing.

On May 23, 2008 the Company was loaned $50,000 by the issuance of a promissory note, to be paid on the earlier of (i) the date that the Company obtains equity financing from a third party in the minimum amount of $1,000,000 net to the company, or (ii) May 23, 2009. For the period from the date of advance of the loan up to and including the date that the loan is repaid, interest will accrue on the loan on the balance of principal outstanding at the rate of 10% per annum, compounded monthly. Interest will be payable in a balloon payment on the date the loan is repaid. The note is unsecured. As of May 31, 2010, this loan has not been repaid as the lender has agreed to extend the terms of the loan until the Company is able to obtain further financing.

On September 21, 2010 the Company was loaned $45,000 by the issuance of a promissory note to be paid on June 23, 2011. For the period from the date of advance of the loan up to and including the date that the loan is repaid, interest will accrue on the balance of principal outstanding at the rate of 8% per annum. Interest will be payable in a balloon payment on the date the loan is repaid. The note is unsecured and is convertible into shares of the Company’s restricted common stock at a conversion price equal to 58% of the average of the lowest three trading prices during the ten trading day period preceding the conversion date.

The Company recorded a beneficial conversion feature of $32,665 with respect to the loan at September 21, 2010 and has included in income amortization expense of $13,401 relating to the beneficial conversion feature during the six months ended August 31, 2011 ($19,264 during the year ended February 28, 2011). During the six months ended August 31, 2011, the note holder elected to convert $$37,000 of the note into 4,972,969 shares of the Company’s restricted common stock at an average price of $0.014 per share, resulting in a loss from the conversion of $32,923. The net remaining loan balance was $8,000 at August 31, 2011.

Included in accrued interest at August 31, 2011 is $232,544 (February 28, 2011 - $201,991) for accrued interest on these notes payable.

Loan Agreement

On May 30, 2008 the Company was loaned $450,000 pursuant to a loan agreement. The principal and interest is to be paid on the earlier of (i) cash being available from operations, (ii) the date that the Company obtains equity or debt financing from a third party in the minimum amount of $1,000,000, or (iii) November 30, 2008. This loan bears interest at 12% per annum, calculated annually. The loan is secured by the Company’s assets. As additional compensation for the loan, the Company issued to the lender 150,000 common shares of the Company. The fair value of these shares was determined to be $514,500 based on the quoted market price of the shares on the date of issuance and was recorded as a financing fee on the consolidated statement of operations for the year ended February 28, 2009. As of May 31, 2010, this loan has not been repaid as the lender has agreed to extend the terms of the loan until the Company is able to obtain further financing.

Included in accrued interest at August 31, 2011 is $270,407 (February 28, 2011 - $232,659) for accrued interest on these notes payable.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 6 – Notes Payable (Continued)

Notes Payable, Related Parties

On November 4, 2002, the Company’s wholly-owned subsidiary, 1536692 Ontario, Inc. (“Ontario”), received $144,583 (CAD$ 225,000) from a family member of the Company’s President and Chief Executive Officer, with which the Company purchased production equipment (Note 4). Interest accrues at 6% compounded annually. Principal and interest are payable on demand. The promissory note is secured by the production equipment (Note 4), and any intangible assets developed or contract rights created by the Company in the future, pursuant to a General Security Agreement.

During the six months ended August 31, 2011, the Company issued 340,500,000 shares of its restricted common stock in conversion of $181,477 (CAD$ 187,061) of the notes payable, and $142,273 of accrued interest (CAD$ 146,025), at an average price of $0.0127 per share, realizing a loss on the debt conversions of $4,000,250. There is no remaining balance outstanding at August 31, 2011 of these notes payable.

During the period July 15, 2010 (date of acquisition) through February 28, 2011, the Company issued 16,750,000 shares of its restricted common stock in conversion of $38,750 (CAD$ 37,939) of the notes payable at an average price of $0.045 per share, realizing a loss on the debt conversions of $715,650. The balance outstanding at February 28, 2011 of these notes payable is $191,445, net of foreign currency translation adjustments (CAD$ 187,061).

Included in accrued interest at August 31 and February 28, 2011 is $1,502 and $143,228, respectively, for accrued interest on these notes payable.

Ontario obtains advances from a family member of the Company’s President and Chief Executive Officer to provide operating capital when needed. The advances are non-interest bearing and due on demand. As of August 31 and February 28, 2011, the Company owed the individual $5,019 and $5,023, respectively, (CAD$ 4,908) net of foreign currency translation adjustments.

Note 7 – Related Party Transactions

Prior to March 1, 2010, the Company’s previous officers provided consulting and management services to the Company. From November 4, 2004 (date of Inception) through February 28, 2010, the previous officers charged consulting fees of $394,859, management fees of $1,331,798, and office and miscellaneous expenses of $7,000 to the Company.

Included in accounts payable and accrued liabilities prior to February 28, 2011 was $1,070,732 owed to previous directors of the Company and companies with directors in common for expenses incurred on behalf of the Company and for unpaid management and consulting fees. Management deemed that these unpaid management and consulting fees were not payable due to the resignations of all of the officers and directors and recognized $1,070,732 as income included in gain on recovery of payables for the year ended February 28, 2011.

The Company’s Chief Executive Officer (CEO) advances monies to the Company for payment of general and administrative expenses. The amounts owed to the CEO are $42,611 and $3,789 as of August 31 and February 28, 2011, respectively. The amounts due to related parties are unsecured, non-interest bearing and have no specific terms for repayment.

Effective May 6, 2008, the Company adopted a compensation policy for its directors pursuant to which the Company will compensate each director, as follows:

i) a fee of $1,000 per month;

ii) 1,000 restricted shares of the common stock of the Company per month;

iii) a fee of $1,000 per each quarterly board meeting attended.

The Company’s Board of Directors cancelled the above mentioned compensation policy effective March 1, 2010 and recognized the previous accrual of $65,347 for amounts owing to the previous directors of the Company pursuant to this compensation policy as income included in gain on recovery of payables for the year ended February 28, 2011.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 7 – Related Party Transactions (Continued)

On July 15, 2010, the Company issued 1,750,000 shares of its restricted common stock in exchange for 100% of the outstanding capital stock of 1536692 Ontario, Inc., a Canadian Corporation, (“Ontario”) through a share exchange transaction to Mr. Jack Lieberman, the father of the Company’s President and Chief Executive Officer.

On August 16, 2010, the Company issued 1,831,752 shares of its restricted common stock to Mr. William Lieberman, its President and Chief Executive Officer, for services rendered. The shares were valued at the market price on the date of issuance of $0.035, or a total of $64,111.

On April 20, 2011, the Company issued 2,000,000 shares of its restricted common stock to Mr. James Malloy, its Secretary, for services rendered. The shares were valued at the market price on the date of issuance of $0.01, or a total of $20,000.

On April 20, 2011, the Company issued 3,000,000 shares of its restricted common stock to Mr. William Lieberman, its President and Chief Executive Officer, for services rendered. The shares were valued at the market price on the date of issuance of $0.01, or a total of $30,000.

On July 13, 2011, the Company issued 2,500,000,000 shares of its restricted common stock to Mr. William Lieberman, its President and Chief Executive Officer, for services rendered. The shares were valued at the market price on the date of issuance of $0.012, or a total of $30,000,000.

On August 12, 2011, Mr. William Lieberman, the Company’s President and Chief Executive Officer, returned to the Company 200,000,000 shares of its restricted common stock which were previously issued to him for services rendered. The shares credited to compensation costs and were valued at the market price on the date of issuance of $0.012, or a total of $2,400,000.

On August 22, 2011, the Company issued 155,000,000 shares of its restricted common stock to Mr. William Lieberman, its President and Chief Executive Officer, for services rendered. The shares were valued at the market price on the date of issuance of $0.0122, or a total of $1,891,000.

On August 31, 2011, Mr. William Lieberman, the Company’s President and Chief Executive Officer, returned to the Company 1,300,000,000 shares of its restricted common stock which were previously issued to him for services rendered. The shares credited to compensation costs and were valued at the market price on the date of issuance of $0.012, or a total of $15,600,000.

On August 31, 2011, the Company issued 50,000,000 shares of its preferred stock to Mr. William Lieberman, its President and Chief Executive Officer, for services rendered. The shares were valued at par value of $0.001, or a total of $50,000.

Note 8 – Stockholders’ Deficit

Effective January 11, 2007 the Company effected a forward stock spilt of the authorized, issued and outstanding shares of common stock on a six new for one old basis. Authorized capital increased from 75,000,000 common shares to 450,000,000 common shares. Effective April 21, 2008 the Company effected a reverse stock split of authorized, issued and outstanding shares of common stock on a one new for five old basis. Authorized capital decreased from 450,000,000 to 90,000,000 and outstanding common stock decreased from 74,841,228 to 14,968,246 shares.

Effective August 31, 2010, the Company amended its Articles of Incorporation increasing its authorized capital structure to 500,000,000 shares, consisting of 450,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001.

Effective July 12, 2011, the Company amended its Articles of Incorporation increasing its authorized capital structure to 3,000,000,000 shares, consisting of 2,950,000,000 shares of common stock, par value $0.001, and 50,000,000 shares of preferred stock, par value $0.001.

Effective August 31, 2011, the Company amended its Articles of Incorporation decreasing its authorized shares of common stock, par value $0.001, to 2,900,000,000 and increasing its authorized shares of preferred stock to 100,000,000 shares of preferred stock, par value $0.001. The preferred stock is convertible into shares of common stock at a ratio of 20:1 and shall have the same voting rights as common stock.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 8 – Stockholders’ Deficit (Continued)

On May 17, 2007, the Company entered into a share issuance agreement with a subscriber that will allow the subscriber to advance up to $8,000,000 to the Company in exchange for units of the Company. The units will be issued at a price equal to 80% of the volume-weighted average of the closing price of common share for the 10 banking days immediately preceding the date of the notice. Each unit will consist of one common share of the Company and one common share purchase warrant. Each common share purchase warrant will entitle the subscriber to purchase one additional common share at 125% of the price of the units for a period of three years. Should the Company seek alternative sources of financing this subscriber has the right to approve the terms.

Shares issued under the agreement were as follows:

Issue Date	Number of Units		Issue Price			Total Proceeds

May 17, 2007		377,358	$	5.30	$	2,000,000
August 1, 2007		31,056	$	8.05		250,000
September 18, 2007		44,199	$	9.05		400,000
September 18, 2007		52,133	$	10.55		550,000
September 27, 2007		28,708	$	10.45		300,000
October 26, 2007		16,381	$	12.21		200,000
October 26, 2007		21,097	$	11.85		250,000
October 26, 2007		35,897	$	9.75		350,000
November 28, 2007		47,337	$	8.45		400,000
January 16, 2008		43,478	$	3.45		150,000
January 24, 2008		96,154	$	5.20		500,000
January 30, 2008		48,387	$	3.10		150,000
February 11, 2008		89,286	$	2.80		250,000
February 26, 2008		96,774	$	3.10		300,000

		1,028,245			$	6,050,000

On November 5, 2008, the Company entered into a subscription agreement with Carbon Energy Investments Limited (“Carbon Energy”) for the sale of 80,000,000 shares of common stock at a price of $0.50 per share for the aggregate price of $40,000,000. Carbon Energy agreed to pay for the shares as follows:

	●	$15,000,000 on or before November 30, 2008 (later amended to December 12, 2008);
	●	$15,000,000 on or before January 31, 2009; and
	●	$10,000,000 on or before March 31, 2009.

On November 5, 2008, the Company entered into an agreement to purchase shares in Alaska Oil & Gas Resources Limited (“Alaska Oil & Gas”) with Carbon Energy. Carbon Energy is the sole owner of Alaska Oil & Gas. Pursuant to the agreement, the Company agreed to acquire 100% of the issued shares of Alaska Oil & Gas from Carbon Energy in consideration for $57,500,000, $250,000 of which was to be paid in cash and the remainder by the issuance of 57,250,000 shares of common stock. On the same day, two of the Company’s directors were appointed as directors of Alaska Oil & Gas.

On November 28, 2008, the Company entered into an amendment agreement with Carbon Energy relating to purchase of Alaska Oil & Gas whereby it was agreed that the consideration to be paid pursuant to the agreement was varied such that the consideration would amount to $57,500,000, payable by the issuance of 2,000,000 shares of common stock within three business days of November 2008 (issued subsequently) and 55,500,000 shares on completion of the transaction.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 8 – Stockholders’ Deficit (Continued)

On December 3, 2008, the Company entered into a letter agreement with Carbon Energy whereby Carbon Energy agreed to return 2,000,000 shares of common stock to the company upon demand unless certain conditions are fulfilled or waived. The conditions are, among others, that Carbon Energy must complete in full the subscription agreement dated November 5, 2008 except that the first $20,000,000 must be paid to the company on or before December 7, 2008 and that Carbon Energy must sell to the Company Alaska Oil & Gas which must own certain oil and gas leases pursuant to the agreement relating to the purchase of Alaska Oil & Gas.

On November 26, 2008, the Company issued 50,000,000 shares of restricted common stock to Carbon Energy in consideration for $25,000,000 to be received pursuant to the above-mentioned subscription agreement.

On December 2, 2008, the Company issued an additional 2,000,000 shares of restricted common stock to Carbon Energy pursuant to the terms of the amendment agreement for $1,000,000 to be received.

The Company never received payment for the shares issued to Carbon and Carbon never completed on the sale of Alaska Oil & Gas. As a result, the shares that were previously subscribed were cancelled during the year ended February 28, 2009 along with the agreements to purchase Alaska Oil & Gas. The Company is currently reviewing its legal position and any associated remedies relating to the above.

On December 2, 2008, the Company issued an additional 2,000,000 shares of restricted common stock to Carbon Energy pursuant to the terms of the amendment agreement for $1,000,000 to be received.

During the year ended February 28, 2010, the holder of the Company’s debentures received the 15,000,000 restricted common shares pledged as security against the debentures valued at $4,650,000, based on the quoted market price of the Company’s common shares on the date they were released from escrow.

The Company never received payment for the 52,000,000 shares issued to Carbon. As a result, the shares that were previously subscribed were cancelled during the three months ended May 31, 2010.

Acquisitions

On July 15, 2010, the Company issued 1,750,000 in exchange for 100% of the outstanding capital stock of 1536692 Ontario, Inc., a Canadian Corporation, (“Ontario”) through a share exchange transaction to Mr. Jack Lieberman, the father of the Company’s President and Chief Executive Officer (Note 7).

Debt Conversions

During the period July 15, 2010 (date of acquisition) through February 28, 2011, the Company issued 16,750,000 shares of its restricted common stock in conversion of $38,750 of notes payable at an average price of $0.045 per share.

During the six months ended August 31, 2011, the Company issued 340,500,000 shares of its restricted common stock in conversion of $181,477 of related party notes payable, and $142,273 of accrued interest, at an average price of $0.0127 per share.

During the six months ended August 31, 2011, the Company issued 4,972,969 shares of its restricted common stock in conversion of $37,000 of notes payable at an average price of $0.014 per share.

Stock Issued for Services

During the year ended February 28, 2011, the Company issued 60,756,752 shares of its restricted common stock to various individuals and entities for services and company support. The shares were valued at the market price of the Company’s common stock at the date of issuance for a total value of $3,459,612, or an average of $0.057 per share.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 8 – Stockholders’ Deficit (Continued)

Stock Issued for Services (Continued)

During the quarter ended August 31, 2011, the Company experienced a change in control as Mr. Lieberman controls 82.5% of the voting shares of the Company as of August 31, 2011.

Common Stock Purchase Warrants

Changes in the Company’s common stock purchase warrants for the six months ended August 31, 2011 and the year ended February 28, 2011 are as follows:


	Six Months ended				Year ended
	August 31, 2011				February 28, 2011
			Weighted					Weighted
			Average					Average
	Number of		Exercise		Number of			Exercise
	Warrants		Price		Warrants			Price

Balance at beginning of year		2,000,000	$	0.001		3,028,246		$	2.53

Warrants expired		-	$	-		(1,028,246	)	$	7.34

Balance at end of period		2,000,000	$	0.001		2,000,000		$	0.001

The remaining average life of the warrants at August 31, 2011 and February 28, 2011 was 2.16 and 2.66 years, respectively.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 8 – Stockholders’ Deficit (Continued)

Common Stock Purchase Warrants (Continued)

A finder's fee of $60,000 and 52,265 share purchase warrants exercisable at $2.87 for a period of three years from the date of issuance (6% of proceeds) were paid to Partners Consulting in connection with the Original Debenture (Note 6) pursuant to a finder agreement dated February 15, 2008. The fair value of the warrants was determined using the Black-Scholes valuation model. The assumptions used in the Black-Scholes calculation are as follows: expected life – 3 years; volatility – 192%; Dividend rate – 0%; and risk free interest rate is 1.0%. As of February 28, 2011 these warrants had not been exercised and expired. The fair value of the shares ($1,208) has been reflected as a credit to consulting fees for the year ended February 28, 2011.

A finder's fee of $60,000 and 76,923 share purchase warrants exercisable at $0.78 for a period of three years from the date of issuance (6% of additional proceeds) were paid to Partners Consulting in connection with the Amended Debentures (Note 6) pursuant to a finder agreement dated February 15, 2008. The fair value of the warrants was determined using the Black-Scholes valuation model. The assumptions used in the Black-Scholes calculation are as follows: expected life – 3 years; volatility – 192.6%; Dividend rate – 0%; and risk free interest rate is 1.0%. As of February 28, 2011 these warrants had not been exercised and expired. The fair value of the shares ($1,779) has been reflected as a credit to consulting fees for the year ended February 28, 2011.

Note 9 – Commitments

By agreements dated June 8, 2007, the Company agreed to pay three directors of the Company a total amount of $20,000 per month for an indefinite period for consulting and management services to the Company. The agreements may be terminated at any time with cause and with three months’ notice without cause. On October 19, 2007 two of these agreements were amended from $12,000 to £9,000 ($17,900) per month and from $5,000 per month to £7,000 ($13,900). Effective June 1, 2008, these agreements were amended from £9,000 to £15,000 per month and from £7,000 to £12,500 per month. All other terms remained the same. Effective June 1, 2009, the agreement for £12,500 per month was terminated. Effective March 1, 2010, the agreement for £15,000 per month was terminated.

On May 8, 2008 the Company entered into a consulting agreement with Partners Consulting Inc. (“PCI”), a Florida Corporation, to introduce the Company to potential new investors. The consideration payable to PCI is warrants to purchase 50,000 shares of common stock due upon signing the agreement. In addition, PCI will receive 6% of the gross proceeds from any potential financing, payable in cash and share purchase warrants equal to 6% of the gross proceeds. In the event a financing is facilitated through an investment banker introduced by PCI, PCI will instead receive 3% of the gross proceeds, payable in cash and share purchase warrants equal to 3% of the gross proceeds. All warrants will have a cashless exercise and will be priced at market value as of the date of the financing and with a minimum expiry period of three years. The consulting agreement was for a period of one year.

At February 28, 2010, the Company had not yet issued the warrants for 50,000 common shares due upon signing of the agreement but the fair value of these warrants was determined to be $4,364, which was included in fees payable in stock and warrants at February 28, 2011. These warrants are exercisable at $2.77 and will expire three years from the date of issuance. The fair value of these warrants was determined using the Black Scholes valuation model. The assumptions used in the Black-Scholes calculation are as follows: expected life – 3 years; volatility – 192%; Dividend rate – 0%; and risk free interest rate is 1.0%. These warrants expired May 8, 2011and the fair value of the warrants ($4,364) has been reflected as a credit to consulting fees for the six months ended August 31, 2011.

On May 21, 2008, the Company signed a letter of commitment whereby the Company agreed to commit to the use of a drilling rig commencing no earlier than October 1, 2008 for a total cost of $8,910,000 which has been accrued in accounts payable and accrued liabilities as at February 28, 2011 and 2010. The Company also committed to enter into a well project management and integrated services contract for the management of a well program on the rig. The Company is also obligated to pay a fee of 1.75% of the operating rig rate in acknowledgement of the value provided with the rig opportunity, if the Company uses the rig, but not the integrated project management services. The Company also incurred and accrued penalties of $2,000,000 as compensation for lost revenues of the rig owners for its failure to fulfill its obligations under the rig provision contract and may be liable to pay up to an additional $2,000,000 for its share of additional costs incurred by the rig owners during the Company’s allotted rig slot.

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 9 – Commitments (Continued)

This additional $2,000,000 amount is subject to a commercial discussion between the parties involved and has been accrued at February 28, 2011 and 2010 as it is likely that will be incurred. A total of $12,910,000 was recorded as a loss on failure to perform obligations under oil & gas commitments and has been charged to the statement of operations during the year ended February 28, 2009. During the quarter ended August 31, 2011, the Company’s management has determined that the likelihood of this obligation becoming due and payable was unlikely and has written off the accrual and recognized the amount as a gain on recovery of payables in the statement of operations.

By a bonus agreement dated May 22, 2008, the Company agreed to issue 5,000 common shares and £5,000 ($10,000) (paid during the year ended February 29, 2008) to an officer and director of the Company as a performance bonus. At February 28, 2008, the Company had not yet issued the shares due. The fair value of the shares was determined to be $22,150, which was included in fees payable in stock and warrants at February 28, 2010. Due to the resignation of the officer, the fair value of the shares ($22,500) has been reflected as a credit to consulting fees for the year ended February 28, 2011.

During the year ended February 28, 2010, the Company recorded a recovery of $8,500 in consulting fees for the change in fair value of 50,000 common shares issuable pursuant to Board of Advisors (“BOA”) agreements dated November 17, 2007 as compensation to the members of the BOA. An amount of $6,500 is included in fees payable in stock and warrants at February 28, 2010 for these shares. Due to the termination of the BOA, the fair value of the shares ($6,500) has been reflected as a credit to consulting fees for the year ended February 28, 2011.

During the year ended February 28, 2010, the Company accrued $8,460 in consulting fees for the fair value of 11,000 common shares issuable to a former employee of the Company. This amount is included in fees payable in stock and warrants at February 28, 2010. Due to the termination of the consulting agreement, the fair value of the shares ($8,460) has been reflected as a credit to consulting fees for the year ended February 28, 2011.

As of February 28, 2011, the Company has evaluated certain accrued expenses and accounts payable from prior years, primarily consisting of accrued salaries, consulting and management fees, and has determined that these amounts are no longer payable. Accordingly, $3,184,620 has been recorded as a gain on recovery of payables for the year ended February 28, 2011.

Prior to August 31, 2011, $1,507,928 of payables incurred in prior years had been recorded by the Company’s previous management. Current management has determined that the likelihood of these obligations becoming due and payable was unlikely and has written off the payables and recognized them as a gain on recovery of payables during the quarter ended August 31, 2011.

Note 10 – Income Taxes

Deferred income taxes have been provided to show the effect of temporary differences between the recognition of expenses for financial and income tax reporting purposes and between the tax basis of assets and liabilities, and their reported amounts in the consolidated financial statements. In assessing the realizability of deferred tax assets, the Company assesses the likelihood that deferred tax assets will be recovered through tax planning strategies or from future taxable income, and to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established. The Company adjusts the valuation allowance in the period management determines it is more likely than not that net deferred tax assets will or will not be realized. As of August 31, 2011 and February 28, 2011, the Company has provided a valuation allowance for all net deferred tax assets due to their current realization not being more likely than not.

The provisions for income taxes differ from the amount computed by applying the statutory federal income tax rate to Income before provision for income taxes. The source and tax effects of the differences are as follows for the three months ended August 31, 2011 and 2010:

	2011			2010
U.S. federal statutory rate		34	%		34	%
Valuation reserve		- 34	%		-34	%
Total		0	%		0	%

Fox Petroleum Inc. and Subsidiaries

(A Development Stage Company)

Notes to Consolidated Financial Statements

August 31, 2011

(unaudited)

Note 10 – Income Taxes (Continued)

As of August 31, 2011, the Company did not recognize any assets or liabilities relative to uncertain tax positions, nor do we anticipate any significant unrecognized tax benefits will be recorded during the next 12 months. Any interest or penalties related to unrecognized tax benefits is recognized in income tax expense. Since there are no unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest.

Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the consolidated financial statements. Tax positions include, but are not limited to, the following:

	·	An allocation or shift of income between taxing jurisdictions;
	·	The characterization of income or a decision to exclude reportable taxable income in a tax return; or

A decision to classify a transaction, entity or other position in a tax return as tax exempt.

The Company reflects tax benefits only if it is more likely than not that we will be able to sustain the tax position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. The Company has no unrecognized tax benefits as of August 31, 2011.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s balance sheets at August 31, 2011, and has not recognized interest and/or penalties in the statement of operations for either period.

Note 11 – Subsequent Events

On September 1, 2011 the Company issued 1,462,687 shares of its restricted common stock in conversion of $9,800 of notes payable and accrued interest at a market price of $0.014 per share.

On September 7, 2011, the Company entered into a Purchase and Sale agreement to acquire the assets of Renfro Energy LLC, a Texas limited liability company, and Cameron Parish Pipelines LLC, a Texas limited liability company, for a combined $300,000 in cash. As additional compensation to the seller, the Company agrees to convey and assign at the closing a Ten Percent (10%) Net Profits Interest (“NPI”) to the seller. NPI is defined as revenues attributable to oil and gas production, less direct expenses and costs, from the Cameron Parish School Board lease (“CPSB”). The Company expects the acquisition to be completed by October 31, 2011 contingent upon the successful completion of audits of both companies.

On September 20, 2011, the company issued 2,000,000 shares of its restricted stock to a consultant for services rendered. The shares were valued at the market price on the date of issuance of $0.0531, or $106,200.

On October 7, 2011, the company issued 6,000,000 shares of its restricted common stock in conversion for $6,000 of loans payable and accrued interest at a market price of $0.024 per share.

The Company has evaluated subsequent events through the date the financial statements were issued and filed with Securities and Exchange Commission. The Company has determined that there are no other events that warrant disclosure or recognition in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended February 28, 2011 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

We are a development stage company and have not generated any revenue to date. The following discussions sets forth selected financial information for the periods indicated. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities, however, there is no assurance that we will be successful in raising additional capital.

Plan of Operation

We are a development stage company engaged in the identification, acquisition, exploration and, if warranted, development of prospective oil and gas properties and the acquisition of plastics recycling businesses.

With the acquisition of Ontario in July 2010, the company initiated plans to move into the business of recycling oil based plastics. We are focused on acquiring, developing and operating plastic recycling operations throughout North America. We expect to begin operations of this division in fiscal 2012. Our goal is to become an important partner for leading recycling companies who need proficient services. We expect Ontario to eventually become carbon neutral and process up to 30 Million pounds of post-industrial and post-consumer scrap plastics per year with revenues approaching Five million dollars per year at these processing levels. We are also aggressively seeking additional acquisition targets in the plastics recycling market place to increase our processing capacity and are currently speaking to companies in the automotive and beverage industries to process plastic waste streams and fulfill circular recycling streams

On September 7, 2011, we entered into a Purchase and Sale agreement to acquire the assets of Renfro Energy LLC, a Texas limited liability company, and Cameron Parish Pipelines LLC, a Texas limited liability company. We expect the acquisition to be completed by October 31, 2011 contingent upon the successful completion of audits of both companies. Our plans are for these acquired companies to begin producing oil and gas and realizing revenues by February 29, 2012. The expected cash required to accomplish successful production is estimated to be $600,000 during the next six months.

We are also currently identifying and evaluating alternatives to expand our Oil and Natural gas portfolios.

We have no access to capital to repay our debt or fund our current or ongoing operations. Unless we can secure additional capital and renegotiate the terms of our outstanding debts, we may be required to discontinue our operations at any time. We will need additional further advances and issuance of debt instruments to fund our operations over the next nine months. In connection with our future business plan, management anticipates additional increases in operating expenses and capital expenditures relating to acquisition of further interests in oil and gas assets or other acquisitions. We would finance these expenses with further issuances of securities and debt issuances. We expect we would need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities would result in dilution to our current shareholders. Further, such securities may have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

Results of Operations

For the Three Months Ended August 31, 2011 and 2010

Revenues

The Company had no revenues for the three months ended August 31, 2011 and 2010.

Operating Expenses

For the three months ended August 31, 2011, our operating expenses were $13,966,946 compared to $1,345,800 for the three months ended August 31, 2010, representing an increase of $12,621,146. The increase in operating expenses was primarily attributable to a decrease in general and administrative expenses of $1,327,354 (reflecting our changes in administrative activity and changes in management structure) and an increase in consulting fees of $13,948,500 primarily consisting of stock based compensation of 13,941,000.

Other Income (Expense)

During the three months ended August 31, 2011, we incurred interest expense of $124,794 compared to $120,129 in the same period of 2010. We realized a gain on recovery of payables of $14,417,928, offset by a loss on conversion of debt of $3,999,923 and accretion of convertible note discounts of $2,513 for the three months ended August 31, 2011. For the three months ended August 31, 2010, we realized an impairment of goodwill of $397,575.

For the Six Months Ended August 31, 2011 and 2010

Revenues

The Company had no revenues for the six months ended August 31, 2011 and 2010.

Operating Expenses

For the six months ended August 31, 2011, our operating expenses were $14,023,754 compared to $831,300 for the six months ended August 31, 2010, representing an increase of $13,192,454. The increase in operating expenses was primarily attributable to a decrease in general and administrative expenses of $1,316,182 (reflecting our changes in administrative activity and changes in management structure) and an increase in consulting fees of $13,994,136 primarily consisting of stock based compensation of 13,991,000. For the six months ended August 31, 2010, we recorded a credit to finance fees of $(514,500) while we incurred no finance fees for the six months ended August 31, 2011.

Other Income (Expense)

During the six months ended August 31, 2011, we incurred interest expense of $251,023 compared to $237,686 in the same period of 2010. We realized a gain on recovery of payables of $14,417,928, offset by a loss on conversion of debt of $4,033,173 and accretion of convertible note discounts of $13,401 for the six months ended August 31, 2011. For the six months ended August 31, 2010, we realized an impairment of goodwill of $397,575.

Net Loss

For the period from November 4, 2004 (date of inception) to August 31, 2011, we have incurred an accumulated loss of $48,037,049.

Liquidity and Capital Resources

Liquidity and Capital Resources during the six months ended August 31, 2011 compared to the six months ended August 31, 2010

As of August 31, 2011, the Company had no cash and a deficit in working capital of $6,827,417. The Company used cash of $38,822 in operations for the six months ended August 31, 2011. The Company used $1,732 in operating activities during the six months ended August 31, 2010.

No cash flows were generated from investing activities and cash from financing activities was $38,822, consisting of advances from its officer, for the six months ended August 31, 2011. No cash flows were generated from investing or financing activities for the six months ended August 31, 2010.

We will require additional financing during the current fiscal year in order to pay certain general and administrative costs while we re-evaluate our business strategy. We presently do not have sufficient financing to enable us to complete these activities and will require additional financing or loans or advances from our management and shareholders. Our actual expenditures on these activities will depend on the amount of funds we have available as a result of our financing efforts. There is no assurance that we will be able to raise the necessary financing.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the consolidated financial statements for the year ended February 28, 2011 regarding concerns about our ability to continue as a going concern. Our unaudited consolidated financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Our unaudited consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/ or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited consolidated financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

There is no assurance that our operations will be profitable. The Company has conducted private placements of its common stock and has issued notes payable, which have generated funds to satisfy the initial cash requirements of its planned exploration ventures. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

Our significant accounting policies are summarized in Note 3 of our unaudited consolidated financial statements. While all of these significant accounting policies impact the Company’s consolidated financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company and require management to use a greater degree of judgment and estimates. We believe that the estimates and assumptions that are most important to the portrayal of our consolidated financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting for mineral property costs, impairment of long-lived assets, income taxes and stock-based compensation. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future consolidated financial conditions or results of operations. We suggest that our significant accounting policies be read in conjunction with this Management's Discussion and Analysis of Financial Condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

Item 4. Controls and Procedures.

(a)	Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the CEO and CFO concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

(b)	Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Amendment No. 1 to Annual Report on Form 10-K for the fiscal year ended February 28, 2011, filed with the SEC on August 9, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On June 15, 2011, the Company issued 6,000,000 shares of its restricted common stock in conversion of $6,000 of notes payable at a price of $0.001 per share.

On July 13, 2011, the Company issued 261,000,000 shares of its restricted common stock in conversion of $251,000 of notes payable at an average price of $0.00096 per share.

On July 28, 2011, the Company issued 10,000,000 shares of its restricted common stock in conversion of $10,000 of notes payable at a price of $0.001 per share.

On August 9, 2011, the Company issued 1,010,101 shares of its restricted common stock in conversion of $10,000 of notes payable at a price of $0.0099 per share.

On August 11, 2011, the Company issued 60,000,000 shares of its restricted common stock in conversion of $55,000 of notes payable at an average price of $0.00092 per share.

On August 24, 2011, the Company issued 1,690,141 shares of its restricted common stock in conversion of $12,000 of notes payable at a price of $0.0071 per share.

On August 30, 2011, the Company issued 2,272,727 shares of its restricted common stock in conversion of $15,000 of notes payable at a price of $0.0066 per share.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

During the quarter ended August 31, 2011, the Company experienced a change in control as Mr. William Lieberman, the Company’s Chief Executive Officer and sole Director, controls 82.5% of the voting shares of the Company as of August 31, 2011.

Item 6. Exhibits

Exhibit No.		Description

31.1		Rule 13a-14(a) Certification by the Principal Executive Officer of Registrant.

31.2		Rule 13a-14(a) Certification by the Principal Financial Officer of Registrant.

32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

InPursuant ~~accordance~~to ~~with~~ the requirements of Section 13 or 15(d) 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.

	FOX PETROLEUM INC.
/s/ William Lieberman		October 19, 2011
Dated: July 12, 2011	By:	/s/ William Lieberman
President and Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer)		Date
		William Lieberman, President and
		Chief Executive Officer

Dated: July 12, 2011	By:	/s/ William Lieberman
		William Lieberman, Chief Financial Officer

Filing Compare · FOX PETROLEUM INC.