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

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2011

or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________

Commission File Number 000-50861

AMERICAS WIND ENERGY CORPORATION
(Exact name of registrant as specified in its charter)

416.233.5670
(Registrant’s telephone number, including area code)

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

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

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

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
[   ] YES     [X] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
39,396,202 common shares issued and outstanding as of March 14, 2010

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim financial statements for the six month period ended January 31, 2011 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.

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AMERICAS WIND ENERGY CORPORATION

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIODS ENDED JANUARY 31, 2011 AND 2010

UNAUDITED

(EXPRESSED IN U.S. DOLLARS)

CONTENTS

AMERICAS WIND ENERGY CORPORATION
Condensed Consolidated Interim Balance Sheets
January 31, 2011 and July 31, 2010
(Expressed in U.S. Dollars)

(The accompanying notes are an integral part of these condensed consolidated interim financial statements.)

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AMERICAS WIND ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss
For the Six-Month Periods Ended January 31, 2011 and 2010 and
Cumulative from Inception (July 29, 2002) through January 31, 2011
(Expressed in U.S. Dollars)
Unaudited

(The accompanying notes are an integral part of these condensed consolidated interim financial statements.)

- F-2 –

AMERICAS WIND ENERGY CORPORATION
Condensed Consolidated Interim Statements of Cash Flows
For the Six-Month Periods Ended January 31, 2011 and 2010 and
Cumulative from Inception (July 29, 2002) through January 31, 2011
(Expressed in U.S. Dollars)
Unaudited

(The accompanying notes are an integral part of these condensed consolidated interim financial statements.)

- F-3 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

- F-4 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

Depreciation expense charged to operations amounted to $142 for the six months ended January 31, 2011.

- F-5 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

- F-6 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

- F-7 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

The Company incurred the following amounts with related parties:

- F-8 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

The components of deferred tax assets (liability) are as follows:

The Company has net operating loss carryforwards available to be applied against future years' income. Due to the losses from operations and expected future operating results, it is more likely than not that the deferred tax asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax payments, accordingly, a 100% valuation allowance has been recorded for deferred tax assets and current income taxes.

As of January 31, 2011, the Company had $5,998,822 of Federal, provincial and state net operating loss carryforwards (including losses of $324,901 in the U.S.) available to offset future taxable income. Such carryforwards expire in:

- F-9 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

Entry into the agreements

On March 5, 2009, the Company sublicensed its license to EWT allowing the use of its exclusive intellectual property and know-how rights in relation to the manufacturing and sales of medium capacity wind turbines in the size range of 600 kilowatt to 1 megawatt to the Canadian, United States, Mexican and related territory markets (“Exclusive Rights Territory”) to EWT. The agreement specified that the Company receive sublicense payments in an amount equal to the sum of (i) 2.5% of sales revenues and (ii) 12.5% of gross profit, not exceeding $28,000,000 in aggregate.

The Company had the right to terminate the Agreement earlier if the aggregate sublicense payments under the Agreement were less than $14,000,000 and one of the following events occurred before March 5, 2012:

a) If EWT ceased to conduct any business in the Exclusive Rights Territory for a period of greater than 12 consecutive months;

b) If EWT sought relief under Title 7 of the U.S. Bankruptcy Code or a similar provision and an order was entered to liquidate EWT as opposed to a bankruptcy filing under Title 11 seeking reorganization; or

c) If EWT failed to make any undisputed payments to the Company when due and such payment was not made within 45 days of the notice given by the Company.

As part of the Agreement, the Company transferred to EWT all of its risks and benefits to its Waverly and Rural contracts. As such, the Company was committed to transfer the deposits made by Waverly and Rural of $940,730 to EWT.

EWT assumed the costs incurred on the Confederation and Windvision contracts. The total aggregate costs along with the deposits on the Waverly and Rural contracts owing to EWT was $2,818,875 (herein “debt”).

Also, as part of the Agreement, the Company assigned all of its rights, interest and obligations under the license agreement with GE Power Technology LLC ("GEPT").

On April 28, 2010, the Company entered into the Settlement Agreement. This agreement replaced the March 5, 2009 agreement. Under this agreement, the Company will receive future payments based on 3% of sales of wind turbines made by EWT (herein the “Settlement Payments”), with the total Settlement Payments not exceeding $10,000,000.

Prior to entering into the Settlement Agreement, the debt due to EWT was approx. $2.8 million and represented actual costs incurred on contracts plus anticipated costs to complete the Confederation

- F-10 –

AMERICAS WIND ENERGY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
Notes to Condensed Consolidated Interim Financial Statements
January 31, 2011 and 2010
(Expressed in U.S. Dollars)
Unaudited

Power, Wind Vision and Wray contracts. EWT determined that the costs to complete the contracts would be considerably more than the $2.8 million and accordingly made efforts to enter into the Settlement Agreement. It was agreed the full and final payment of $4 million was fair and reasonable to both parties and to satisfy EWT for any unforeseen obligations incurred by completing the contracts. In exchange, EWT agreed to release the Company from any future or further liabilities incurred from those contracts.

As repayment of the debt payable by the Company to EWT, EWT will apply the first $2,000,000 of Settlement Payments against the debt amount. Once $2,000,000 has been repaid to EWT, the Settlement Payments will be made to the Company at 50% of the Settlement Payment amount until EWT have retained an aggregate of $4,000,000 in total Settlement Payments (including the initial $2,000,000). Subsequent to that, the Settlement Payments will be paid in full to the Company until the earlier of the $10,000,000 being reached or until the fourth anniversary date of this agreement. If no Settlement Payments are received under the Agreement, the Company will not be committed to repaying the debt. As such, the debt has been removed and offset against the write down of the intangible asset of $2,008,955 in other income in these consolidated financial statements.

- F-11 –

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, “our company” and “Americas Wind” refer to Americas Wind Energy Corporation, and, unless otherwise indicated, our subsidiary, 6544797 Canada Ltd., a Canadian corporation, and our wholly-owned subsidiary Americas Wind Energy Inc., an Ontario corporation.

General Overview

We were incorporated pursuant to the laws of the State of Nevada on August 22, 2003.

On June 4, 2005, we effected a six for one forward stock split of the issued shares of common stock in the capital of our company.

On October 14, 2005, we effected a 3.195 for one forward stock split of the issued shares of common stock in the capital of our company.

On April 4, 2006, our board of directors approved an amendment to our articles of incorporation to create 30,000,000 class A special voting shares in the capital of our company. Subsequent to our board of directors’ approval of the amendment to our articles of incorporation, on April 5, 2006, the holders of a majority of the outstanding common shares of our company consented in writing to the amendment to our articles of incorporation. The amendment to our articles of incorporation was effected with the Nevada Secretary of State on June 19, 2006. As a result, our authorized capital consists of 100,000,000 shares of common stock with a par value of $0.0001 and 30,000,000 class A special voting stock without par value.

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On August 28, 2006, our board of directors approved an amendment to our articles of incorporation to change our name from Northwest Passage Ventures, Ltd. to Americas Wind Energy Corporation. Also on August 28, 2006, the holders of a majority of the outstanding common shares of our company consented in writing to the amendment to our articles of incorporation. The amendment to our articles of incorporation was effected with the Nevada Secretary of State on October 16, 2006.

Effective March 5, 2009, we entered into a sublicense agreement with Americas Wind Energy Inc., our Ontario subsidiary company, Emergya Wind Technologies B.V., a Netherlands company and EWT-Americas Inc., a Delaware corporation, wherein we have agreed to grant to EWT-Americas an exclusive sublicense of all of our rights under a master license agreement dated April 23, 2004.

We had an exclusive license for the North American territory from EWT B.V., of the Netherlands, for the mid-sized direct drive wind turbines manufactured by EWT B.V.

We have provided a sub-license of these rights to EWT-Americas Inc. a wholly owned subsidiary of Emergya Wind Technologies Holdings N.V. and an affiliate of EWT B.V.

The major terms of the transaction which closed effective March 5, 2009 are:

• We sub-licensed to EWT-Americas our existing rights to market in North America
• EWT- Americas will be the exclusive manufacturer and supplier of EWT wind turbines in North America.

On March 5, 2009, we completed a sublicense agreement with EWT Americas. The complete agreement is available on-line as filed with the SEC.

Summary terms of the agreement were:

• The sublicense agreement gave AWE a royalty of 2.5 % of sales revenue and 12.5% of contribution margin on all sales to companies listed on exhibit A of the agreement over the next 5 years.
• The royalty payments were capped at $28 million.
• EWT Americas took over all AWE projects except two and was completing these two projects for our company.
• The costs to complete these two projects plus additional monies owed to EWT for materials was being taken out of our royalty payments at the rate of 25% of each royalty payment until completed.
• We cannot compete with EWT Americas in the windturbine business.

Effective March 5, 2009, Mr. Frank Pickersgill, our secretary and director, entered into a consulting agreement with EWT-Americas Inc. Pursuant to the terms of the consulting agreement, Mr. Pickersgill was to provide business consulting services to EWT-Americas Inc. for a monthly compensation of US$6,250. The agreement was to be terminated on the earlier of: (i) two years from the date of the agreement, or (ii) the termination of the sublicense agreement.

Effective March 5, 2009, Mr. Hal Dickout, our president, chief executive officer, chairman and director (also our principal executive officer, principal financial officer and principal accounting officer), entered into a consulting agreement with EWT-Americas Inc. Pursuant to the terms of the consulting agreement, Mr. Dickout was to provide business consulting services to EWT-Americas Inc. for a monthly compensation of US$6,250. The agreement was to be terminated on the earlier of: (i) two years from the date of the agreement, or (ii) the termination of the sublicense agreement.

On February 1, 2010, we received a letter from EWT B.V. claiming that they are (1) terminating the sublicense agreement citing alleged violations of representations and warranties in the agreement; (2) alleging that large orders and opportunities were cancelled due to AWE failures; and (3) alleging amounts owing to EWT of US$2.519 million, are due and payable within 30 days.

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Our responses to the allegations are as follows:

• There was no breach of warranty or untrue representation in the sublicense agreement on our part or on the part of Americas Wind Energy Inc.
• The money allegedly owed to EWT was to be paid from future payments and is not due.

Our company rejected the claims in the letter and we entered into settlement discussions with EWT and EWT-Americas (together “EWT”). These discussions have resulted in a settlement agreement dated as of April 28, 2010, which became effective on June 11, 2010.

A summary of the key terms of the settlement agreement is as follows:

• We will be paid a fee with respect to sales by EWT. of 600kw to 1mw wind turbines in the territory covered by the original license agreement over the next four years subject to a maximum cap of $10,000,000.
• As repayment of the debt payable by our company to EWT, EWT will apply the first $2,000,000 of settlement payments against the debt amount. Once $2,000,000 has been repaid to EWT, the settlement payments will be made to our company at 50% of the settlement payment amount until EWT have retained an aggregate of $4,000,000 in total settlement payments (including the initial $2,000,000). Subsequent to that, the settlement payments will be paid in full to our company until the earlier of the $10,000,000 being reached or until the fourth anniversary date of the agreement. If no settlement payments are received under the agreement, our company will not be committed to repaying the debt.
• The consulting contracts with H. C. Dickout and F. D. Pickersgill are reinstated.
• The settlement agreement is conditioned upon and was not effective unless EWT reaches agreement with former customers of our company or EWT waives the claim, which condition was satisfied by EWT waiving the condition effective June 11, 2010

We are now out of the business of manufacturing and supplying wind turbines and look forward to the fees that may be generated as a result of the settlement reached.

It is management’s intent to search for a merger or acquisition partner who is interested in our public structure, who can use our tax loss carry-forwards and who values the royalty stream, in order to get best total return for shareholders.

Our Current Business

Our company expects to receive royalty payments under the settlement agreement signed on April 28, 2010. Per the agreement, our company will receive payments equal to 3% of the sales revenue generated by EWT in North America. Under this agreement, EWT has assumed all of the liabilities of AWE. The royalty payments and debt repayment will work as follows:

a) The first $2,000,000 of royalty payments due to us will be retained by EWT to offset the debt owing to them by us,

b) Subsequent to that, we will receive 50% of the royalty payments owing to us, and the other 50% will go towards paying down the debt we owe to EWT, until a total of $4,000,000 of royalty payments are retained by EWT,

c) Subsequent payments will be paid in full to AWE until a maximum of $10,000,000 in royalty payments has been received by AWE.

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There is no liability to EWT beyond paying a percentage of royalties received. However, if no royalties are received by us, the debt will not be repayable to EWT.

To maximize shareholder value we are exploring merger, acquisition or joint venture opportunities. We plan to raise the necessary capital to do this through a convertible debenture or sale of shares. We have retained a competent and experienced financial firm to assist in this process.

In the short term, operations will continue to be funded by shareholder loans and in the longer term the royalty payments from EWT are expected to contribute strongly to our company’s balance sheet.

Cash Requirements

Over the next 12 months we intend to operate as a business development company. We anticipate that we will incur the following operating expenses during this period:

We believe that we will require additional funds to implement our growth strategy. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

Purchase of Significant Equipment

We do not anticipate the purchase or sale of any plant or significant equipment during the next 12 months.

Trends and Uncertainties

Our revenues are dependent on the success of EWT in selling windturbines to our customer list. Prospects look good in the current political environment of support for renewables but results cannot be assured.

Our ability to develop new business in the current market environment may take some time.

Employees

As of January 31, 2011, we had two employees consisting of Harold Dickout, our chief executive officer, president and chairman (also our principal executive officer, principal financial officer and principal accounting officer), Frank Pickersgill, our secretary. We plan to hire additional employees when circumstances warrant.

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

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Off-Balance Sheet Arrangements

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

Results of Operations

Six month summary ending January 31, 2011 and 2010

Expenses

Our operating expenses for the six month period ended January 31, 2011 and 2010 are outlined in the table below:

Operating expenses for the six months ended January 31, 2011, decreased by 10.5 % as compared to the comparative period in 2010 primarily as a result of reduced business activity.

Other income for the six months ended January 31, 2011, decreased by 52.6 % as compared to the comparative period in 2010.

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Equity Compensation

We currently do not have any stock option or equity compensation plans or arrangements.

Liquidity and Financial Condition

As of January 31, 2011, our company had working capital deficit of $1,961,999.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States of America for financial statements. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financials.

Basis of Presentation

The condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of our company's management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended January 31, 2011 are not necessarily indicative of the results that may be expected for the full fiscal year ending July 31, 2011. The condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements of our company for the fiscal year ended July 31, 2010.

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Item 3. Quantitative Disclosures About Market Risks

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4T. Controls and Procedures

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our quarter ended October 31, 2010 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

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Risks Related to Our Business

Our audited financial statements for the year end July 31, 2010, states that there is a substantial doubt that we will be able to continue as a going concern.

Our income from the Settlement Agreement is a percentage of sales achieved by EWT in North America.

This income is dependent on EWT achieving these sales. To the extent that sales are not achieved or are less than anticipated, our income will be impacted and our company may have difficulty in meeting our payment obligations.

There may be some doubt about ability to continue as a going concern.

Our company’s continuance as a going concern is dependent on out directors and principal stockholders in providing financial support in the short term and receiving sufficient royalty payments to discharge our company’s liabilities. In the event that these are not achieved, the assets may not be realized or liabilities discharged at their carrying amounts, and differences from the carrying amounts reported in these consolidated financial statements could be material.

Most of our assets and all of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers.

Although we are organized under the laws of the State of Nevada, United States, our principal business office is located in Toronto, Ontario, Canada. Outside the United States, it may be difficult for investors to enforce judgments against us that are obtained in the United States in any action, including actions predicated upon civil liability provisions of federal securities laws. In addition, all of our directors and officers reside outside the United States, and nearly all of the assets of these persons and our assets are located outside of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against us or such persons judgments predicated upon the liability provisions of United States securities laws. There is substantial doubt as to the enforceability against us or any of our directors and officers located outside the United States in original actions or in actions of enforcement of judgments of United States courts or liabilities predicated on the civil liability provisions of United States federal securities laws. In addition, as the majority of our assets are located outside of the United States, it may be difficult to enforce United States bankruptcy proceedings against us. Under bankruptcy laws in the United States, courts typically have jurisdiction over a debtor's property, wherever it is located, including property situated in other countries. Courts outside of the United States may not recognize the United States bankruptcy court's jurisdiction. Accordingly, you may have trouble administering a United States bankruptcy case involving a Nevada company as debtor with most of its property located outside the United States. Any orders or judgments of a bankruptcy court obtained by you in the United States may not be enforceable.

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Risks Related To Our Company Stock

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our Articles authorize the issuance of up to 100,000,000 shares of common stock and 30,000,000 class A special voting shares. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (FINRA), formerly the National Association of Securities Dealers or NASD, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in the stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common shares.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K.

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* Filed herewith

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SIGNATURES

Pursuant to 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.

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