SolarWindow Technologies, Inc. - Quarter Report: 2008 May (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended May 31, 2008

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

For the transition period from _____ to _____

OCTILLION CORP. AND SUBSIDIARIES

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation)

333-127953

(Commission File Number)

59-3509694

(I.R.S Employer Identification No.)

2638 Lapeer Road, Suite 2, Auburn Hills, MI 48326

(Address of principal executive offices)

(800) 213-0689

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [ ] No [X]

State the number of shares outstanding of each of the Issuer’s classes of common equity as of the latest practicable date. As of
July 10, 2008, there were 57,754,600 shares of the Issuer’s Common Stock, $0.001 par value per share outstanding.

Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]

TABLE OF CONTENTS

OCTILLION CORP. AND SUBSIDIARIES

FORM 10-Q, QUARTER ENDED MAY 31, 2008

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Interim Unaudited Consolidated Balance Sheets at May 31, 2008 and August 31, 2007

Interim Unaudited Consolidated Statements of Operations

For the Three and Nine Months Ended May 31, 2008 and May 31, 2007,

and For the Period from Inception (May 5, 1998) to May 31, 2008

Interim Unaudited Consolidated Statement of Stockholders’ Equity

from Inception (May 5, 1998) to May 31, 2008

Interim Unaudited Consolidated Statements of Cash Flows

For the Nine Months Ended May 31, 2008 and May 31, 2007, and For the Period

from Inception (May 5, 1998) to May 31, 2008

Notes to Interim Unaudited Consolidated Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

Signatures

Item 1. Financial Statements

In the opinion of management, the accompanying unaudited consolidated interim financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the periods are presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.


OCTILLION CORP. AND SUBSIDIARIES
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS
AS AT MAY 31, 2008 AND AUGUST 31, 2007
(Expressed in U.S. Dollars)
(Unaudited)

	May 31	August 31
	2008	2007

ASSETS

Current Assets
Cash and cash equivalents	$3,476,404	$1,437,876
Prepaid expenses	3,520	-
	3,479,924	1,437,876

Fixed assets, net (Note 6)	5,308	452

Total Assets	$3,485,232	$1,438,328


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued liabilities	$157,609	$23,706
Accounts payable - related party (Note 10)	4,375	-

Total Liabilities	161,984	23,706

Stockholders' Equity
Authorized:
1,000,000 preferred shares, with par value of $0.10 per share
100,000,000 common shares, with par value of $0.001 per share
Issued and outstanding: 57,754,600 common shares	57,755	53,865
Additional paid-in capital	10,068,646	3,754,467
Accumulated other comprehensive income (loss)	(7,674)	(1,811)
Deficit accumulated during the development stage	(6,795,479)	(2,391,899)
Total Stockholders' Equity	3,323,248	1,414,622

Total Liabilities and Stockholders' Equity	$3,485,232	$1,438,328


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


OCTILLION CORP. AND SUBSIDIARIES
(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTHS AND NINE MONTHS ENDED MAY 31, 2008 AND 2007, AND FOR THE
PERIOD FROM INCEPTION (MAY 5, 1998) TO MAY 31, 2008
(Expressed in U.S. Dollars)
(Unaudited)

	Cumulative	Three Months	Three Months	Nine Months	Nine Months
	May 5, 1998	Ended	Ended	Ended	Ended
	(inception) to	May 31,	May 31,	May 31,	May 31,
	May 31, 2008	2008	2007	2008	2007

Expenses


Investor relations	$2,018,870	$464,700	$151,515	$988,845	$598,345
Management fees - related party	203,074	-	-	-	-
Other operating expenses (Note 9)	3,181,845	1,010,868	28,249	3,010,348	44,027
Professional fees	332,904	17,524	25,627	114,527	45,450
Research and development (Note 5)	428,212	83,304	27,150	239,557	81,450
Travel and entertainment	171,009	30,007	7,353	91,225	17,065
Loss from operations	6,335,914	1,606,403	239,894	4,444,502	786,337

Other income
Interest	78,535	16,761	8,674	41,364	18,312
Foreign exchange gain (loss)	(6,003)	(4,461)	(292)	(442)	(632)
Payable forgiven	30,000	-	30,000	-	30,000

Loss from continuing operations	(6,233,382)	(1,594,103)	(201,512)	(4,403,580)	(738,657)

Loss from discontinued operations	(162,097)	-	-	-	(26,460)

Net loss for the period	$(6,395,479)	$(1,594,103)	$(201,512)	$(4,403,580)	$(765,117)

Loss per share:
Continuing operations		$(0.03)	$(0.00)	$(0.08)	$(0.02)
Discontinued operations		-	-	-	(0.00)
		$(0.03)	$(0.00)	$(0.08)	$(0.02)

Weighted average number of
common shares outstanding:
Basic and diluted		57,457,449	50,034,926	55,367,691	47,953,347


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


OCTILLION CORP. AND SUBSIDIARIES
(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FROM MAY 5, 1998 (INCEPTION) TO MAY 31, 2008
(Expressed in U.S. Dollars)
(Unaudited)


							Deficit
	Preferred Stock		Common Stock		Additional	Accumulated other	accumulated during the		Total stockholders'
	Shares	Amount	Shares	Amount	paid-in capital	comprehensive income (loss)	development stage	Comprehensive income (loss)	equity (deficiency)

Restricted common stock
issued to related parties for
management services
at $0.003 per share	-	$-	9,000,000	$9,000	$(6,000)	$-	$-	$-	$3,000

Unrestricted common stock sales
to third parties at $0.13 per share	-	-	1,125,000	1,125	148,875	-	-		150,000

Comprehensive income (loss)
Net loss for the period	-	-	-	-	-	-	(12,326)	(12,326)	(12,326)
Total comprehensive loss								(12,326)

Balance, August 31, 1998	-	-	10,125,000	10,125	142,875	-	(12,326)		140,674

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(77,946)	(77,946)	(77,946)
Total comprehensive loss								(77,946)

Balance, August 31, 1999	-	-	10,125,000	10,125	142,875	-	(90,272)		62,728

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(12,446)	(12,446)	(12,446)
Total comprehensive loss								(12,446)

Balance, August 31, 2000	-	-	10,125,000	10,125	142,875	-	(102,718)		50,282

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(12,904)	(12,904)	(12,904)
Total comprehensive loss								(12,904)

Balance, August 31, 2001	-	-	10,125,000	10,125	142,875	-	(115,622)		37,378

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(54,935)	(54,935)	(54,935)
Total comprehensive loss								(54,935)

Balance, August 31, 2002	-	-	10,125,000	10,125	142,875	-	(170,557)		(17,557)

Restricted common stock issued to
a related party to satisfy outstanding
management fees at $0.003 per share
on December 19, 2002	-	-	24,000,000	24,000	56,000	-	-		80,000

Restricted common stock issued to a
related party to satisfy outstanding
management fees at $0.003 per share
on March 18, 2003	-	-	6,999,600	7,000	16,332	-	-		23,332

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(97,662)	(97,662)	(97,662)
Total comprehensive loss								(97,662)

Balance, August 31, 2003	-	-	41,124,600	41,125	215,207	-	(268,219)		(11,887)

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(19,787)	(19,787)	(19,787)
Total comprehensive loss								(19,787)

Balance, August 31, 2004	-	-	41,124,600	41,125	215,207	-	(288,006)		(31,674)

Comprehensive income (loss)


Net loss for the year	-	-	-	-	-	-	(103,142)	(103,142)	(103,142)
Total comprehensive loss								(103,142)

Balance, August 31, 2005	-	-	41,124,600	41,125	215,207	-	(391,148)		(134,816)

Issuance of common stock and warrants
at $0.17 per share on May 16, 2006	-	-	3,000,000	3,000	497,000	-	-		500,000

Comprehensive income (loss)
Net loss for the year	-	-	-	-	-	-	(157,982)	(157,982)	(157,982)
Total comprehensive loss								(157,982)

Balance, August 31, 2006	-	-	44,124,600	44,125	712,207	-	(549,130)		207,202

Exercise of Class A Warrants at $0.167
per share during November - December 2006	-	-	3,000,000	3,000	497,000	-	-		500,000

Exercise of Class B Warrants at $0.183
per share November 2006 - May 2007	-	-	3,000,000	3,000	547,000	-	-		550,000

Issuance of common stock and warrants
at $0.50 per share on April 23, 2007	-	-	1,000,000	1,000	499,000	-	-		500,000

Exercise of Class C Warrants at $0.50
per share during August 2007	-	-	980,000	980	489,020	-	-		490,000

Exercise of Class D Warrants at $0.55
per share during August 2007	-	-	880,000	880	483,120	-	-		484,000

Exercise of Class E Warrants at $0.60
per share during August 2007	-	-	880,000	880	527,120	-	-		528,000

Dividend paid - spin off of MicroChannel
Technologies Corporation	-	-	-	-	-	-	(400,000)		(400,000)

Comprehensive income (loss)
Foreign currency translation adjustments	-	-	-	-	-	(1,811)	-	(1,811)	(1,811)

Net loss for the year	-	-	-	-	-	-	(1,442,769)	(1,442,769)	(1,442,769)
Total comprehensive loss								(1,444,580)

Balance, August 31, 2007	-	-	53,864,600	53,865	3,754,467	(1,811)	(2,391,899)		1,414,622

Common stock issued for cash, net	-	-	3,675,000	3,675	1,054,395				1,058,070

Issuance of warrants on private placement					1,694,905				1,694,905

Issuance of warrants to broker as commission					642,980				642,980

Exercise of Class C Warrants at $0.50
per share during March 2008			20,000	20	9,980				10,000

Exercise of Class F Warrants at $1.25
per share during April - May 2008			175,000	175	218,575				218,750

Exercise of Class D Warrants at $0.55
per share during May 2008			20,000	20	10,980				11,000

Stock based compensation	-	-	-	-	2,682,364	-	-	-	2,682,364


Comprehensive income (loss)
Foreign currency translation adjustments	-	-	-	-	-	(5,863)	-	(5,863)	(5,863)

Net loss for the period	-	-	-	-	-	-	(4,403,580)	(4,403,580)	(4,403,580)
Total comprehensive loss								$(4,409,443)

Balance, May 31, 2008	-	$-	57,754,600	$57,755	$10,068,646	$ (7,674)	$ (6,795,479)		$3,323,248


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


OCTILLION CORP. AND SUBSIDIARIES
(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED MAY 31, 2008 AND 2007, AND FOR THE
PERIOD FROM INCEPTION (MAY 5, 1998) TO MAY 31, 2008
(Expressed in US Dollars)
(Unaudited)

	Cumulative	Nine Months	Nine Months
	May 5, 1998	Ended	Ended
	(inception) to	May 31,	May 31,
	May 31, 2008	2008	2007

Cash flows used in operating activities
Loss from continuing operations	$ (6,233,382)	$(4,403,580)	$(765,117)
Add: loss from discontinued operations	(162,097)	-	-
Adjustments to reconcile net loss to
net cash used in operating activities:
- depreciation	4,481	1,288	505
- stock based compensation expense	2,682,364	2,682,364	-
- payable written off	(30,000)	-	(30,000)
- common stock issued for services	3,000	-	-
- common stock issued for debt settlement	103,332	-	-
Changes in non-cash working capital items:
- decrease (increase) in prepaid expenses	(3,520)	(3,520)	1,496
- increase (decrease) in accounts payable and accrued liabilities	157,609	133,903	69,610
- increase (decrease) in accounts payable - related party	34,375	4,375	-
Net cash used in operating activities	(3,443,838)	(1,585,170)	(723,506)

Cash flows from investing activities
Purchase of fixed assets	(9,789)	(6,144)	-
Net cash used in investing activities	(9,789)	(6,144)	-

Cash flows from financing activities
Proceeds from the issuance of common stock and warrants, net	7,337,705	3,635,705	1,550,000
Repayment of promissory note	(155,000)	-	-
Proceeds from promissory notes	155,000	-	-
Dividend paid	(400,000)	-	-
Net cash provided by financing activities	6,937,705	3,635,705	1,550,000

Increase in cash and cash equivalents	3,484,078	2,044,391	826,494

Effect of foreign currency translation	(7,674)	(5,863)	(460)

Cash and cash equivalents - beginning of period	-	1,437,876	247,492

Cash and cash equivalents - end of period	$3,476,404	$3,476,404	$1,073,526


Supplemental cash flow information:
Interest paid in cash	$10,542	$323	$-
Income taxes paid in cash	$-	$-	$-

Supplemental noncash transaction:
Accrued mangement fees converted to equity	$103,332	$-	$-
Warrants issued for brokers commission	$642,980	$642,980	$-

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

OCTILLION CORP. AND SUSIDIARIES

(a development stage company)

Notes to Consolidated Financial Statements

May 31, 2008

(Expressed in U.S. Dollars)

1. Basis of Presentation and Going Concern Uncertainties

Octillion Corp. (“the Company”) was incorporated in the State of Nevada on May 5, 1998. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Sungen Energy, Inc. (“Sungen”) and Octillion Technologies Limited (“Octillion Technologies”). Sungen was incorporated on July 11, 2006 in the State of Nevada and has no assets and no liabilities. Octillion Technologies was incorporated on April 11, 2007 in the Province of British Columbia, Canada for providing administrative services to the Company’s Canada office. All significant inter-company balances and transactions have been eliminated.

Octillion Corp., together with its wholly owned subsidiaries, is a next generation technology incubator focused on the identification, acquisition, development, and commercialization of alternative and renewable energy technologies. Among the Company’s current research and development activities is the development of a patent-pending technology that could adapt existing home and office glass windows into ones capable of generating electricity from solar energy without losing significant transparency or requiring major changes in manufacturing infrastructure.

On August 22, 2007, the Company spun off its wholly-owned biotechnology subsidiary, MicroChannel Technologies Corporation (“MicroChannel”) with the shareholders of the Company. The net assets and results of operations of MicroChannel of the prior period have been reclassified as discontinued operations.

The Company has not generated any revenues and has an accumulated deficit of $6,795,479. The Company has incurred a loss of $4,403,580 during the nine months ended May 31, 2008. In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern.

To meet these objectives, the Company completed a private placement of common stock and warrants for gross proceeds of $3,675,000 on February 12, 2008 and continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms, if at all. Management believes that actions presently taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time.

These consolidated financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharges its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

2. Presentation of Interim Information

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contains all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of May 31, 2008, and the results of operations and cash flows for the nine months ended May 31, 2008 and May 31, 2007. These results have been determined on the basis of generally accepted accounting principles and practices in the United States and applied consistently as those used in the preparation of the Company's 2007 Annual Report on Form 10-KSB.

Certain information and footnote disclosure normally included in the financial statements presented in accordance with generally accepted accounting principles in the United States have been condensed or omitted. It is suggested that the accompanying financial statements should be read in conjunction with the financial statements and notes thereto incorporated in the Company's 2007 Annual Report on Form 10-KSB.

3. New Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment to FASB Statement No. 133". SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations". This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements Liabilities - an Amendment of ARB No. 51". This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In December 2007, the FASB ratified EITF No. 07-1, Accounting for Collaborative Arrangements, that discusses how parties to a collaborative arrangement (which does not establish a legal entity within such arrangement) should account for various activities. The consensus indicates that costs incurred and revenues generated from transactions with third parties (i.e. parties outside of the collaborative arrangement) should be reported by the collaborators on the respective line items in their income statements pursuant to EITF Issue No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent., Additionally, the consensus provides that income statement characterization of payments between the participants in a collaborative arrangement should be based upon existing authoritative pronouncements; analogy to such pronouncements if not within their scope; or a reasonable, rational, and consistently applied accounting policy election. EITF Issue No. 07-1 is effective for financial statements beginning after December 15, 2008 and is to be applied retrospectively to all periods presented for collaborative arrangements existing as of the date of adoption. The Company is evaluating the impact, if any, the adoption of this consensus will have on the results of operations, financial position or cash flows.

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities, (“EITF 07-3”) which is effective for fiscal years beginning after December 15, 2007. EITF 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts will be recognized as an expense as the goods are delivered or the related services are performed. The Company does not expect the adoption of EITF 07-3 to have a material impact on the financial results of the Company.

4. Net Loss per Common Share

Basic earnings or loss per share is based on the weighted average number of shares outstanding during the period of the financial statements. Diluted earnings or loss per share are based on the weighted average number of common shares outstanding and dilutive common stock equivalents. All loss per share amounts in the financial statements are basic loss per share because the inclusion of stock options and warrants outstanding would be anti-dilutive. The computation of basic and diluted loss per share is as follows:


	Three months ended		Nine months ended
	May 31,		May 31,
	2008	2007	2008	2007
Numerator - net loss available to common
stockholders	$(1,594,103)	$(201,512)	$(4,403,580)	$(765,117)

Denominator - weighted average number of
common shares outstanding	57,457,449	50,034,926	55,367,691	47,953,347

Basic and diluted loss per common share	$(0.03)	$(0.00)	$(0.08)	$(0.02)

5. Option Interest in Solar Energy Conversion Technology

In August 2006, the Company, through its wholly owned subsidiary, Sungen Energy Inc., entered into a Sponsored Research Agreement (“Research Agreement”) with scientists at the University of Illinois (“UOI”) for the development of a new patent-pending technology using nanosilicon photovoltaic solar cells that could convert normal home and office glass windows into ones capable of converting solar energy into electricity with limited loss of transparency and minimal changes in manufacturing infrastructure. The process of producing silicon nanoparticles is supported by 10 issued US patents, 7 pending US patents, 2 issued foreign counterpart patents and 19 pending foreign counterpart patents. The period of performance of the Research Agreement is for two years until August 22, 2008 and the Company has to pay $422,818 for the performance of the project, with $2,000 payable upon execution of the agreement (paid), first installment of $27,150 payable on September 23, 2006 (paid) and the remaining 3 of $27,150 each (paid) and 4 of $78,054 each payable every three months thereafter ($156,108 paid and $156,108 accrued).

The Company has the option to enter into a commercial license for the project intellectual property by reimbursement of the related remaining out-of-pocket expenditures incurred by UOI and payment of royalties and fees to be negotiated, which should not exceed 5% and $100,000, respectively.

As of May 31, 2008, the Company has paid $344,763 for the Research Agreement. As the research project has not reached the commercial development stage, the amounts incurred to support the project are expensed.

6. Equipment


	May 31, 2008	August 31, 2007
Computer equipment	$3,257	$2,486
Less: accumulated depreciation	(1,661)	1,159
Office furniture	3,873	3,645
Less: accumulated depreciation	(161)	(3,193)
	$5,308	$452

Depreciation expenses charged to operations was $568 (2007: $123) and $1,288 (2007: $505) for the three-month and nine-month periods ended May 31, 2008 and May 31, 2007 respectively.

7. Capital Stock

At May 31, 2008 there were 1,000,000 shares of preferred stock (par value $0.10 per share) authorized, of which no shares were issued and outstanding. The Board of Directors has the authority to issue such stock in one or more series, to fix the number of shares and to fix and determine the relative rights and preferences of the shares of any such series so established to the full extent permitted by the laws of the State of Nevada and the Articles of Incorporation.

On February 12, 2008, the Company consummated the sale an aggregate of 3,675,000 shares of its common stock and Class F Callable Warrants to purchase up to an additional 3,675,000 shares of the Company’s common stock for aggregate proceeds of $3,675,000 pursuant to the terms of a Securities Purchase Agreement dated February 8, 2008 with certain institutional and other accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Investors”).

The Class F Callable Warrants are exercisable for a period of three years at an initial exercise price of $1.25 per share beginning on February 12, 2008. The number of shares issuable upon exercise of the Class F Callable Warrants and the exercise price of the Class F Callable Warrants are adjustable in the event of stock splits, combinations and reclassifications, but not in the event of the issuance by the Company of additional securities, unless such issuance is at a price per share which is less than the then applicable exercise price of the warrants, in which event then the exercise price shall be reduced and only reduced to equal lower issuance price and the number of shares issuable upon exercise thereof shall be increased such that the aggregate exercise price payable thereunder, after taking into account the decrease in the exercise price, shall be equal to the aggregate exercise price prior to such adjustment.

The Class F Callable Warrants are callable by the Company, at a price of $0.001 per warrant, subject to certain conditions, after the earlier to occur of (i) the expiration of the then applicable hold periods for a cashless exercise under Rule 144 as promulgated pursuant to the Securities Act of 1933, as amended or (ii) the date the registration statement filed pursuant to the Registration Rights Agreement is declared effective by the SEC, which was declared effective by the SEC on March 21, 2008, if Octillion’s common stock, the volume weighted average price for each of 5 consecutive Trading Days exceeds $1.75.

Pursuant to the Securities Purchase Agreement and the Registration Rights Agreement, the Company and the investor parties have made other covenants and representations and warranties regarding matters that are customarily included in financings of this nature. In the event that during the twelve month period following the Closing Date, the Company issues shares at a price per share which is less than $1.00 (“Base Share Price”), then the Company is required to issue to the investors the number of shares equal to (1) the quotient of the aggregate purchase price payable under the Securities Purchase Agreement divided by Base Share Price less (2) the quotient of the aggregate purchase price divided by the per share purchase price under the Securities Purchase Agreement.

The agent was paid a total cash fee of 7% of the aggregate proceeds and Class F Callable Warrants to purchase 514,500 shares of the Company’s common stock valued at $642,980 and representing 7% of the total number of shares purchased by the Investors. In addition, the agent was reimbursed $6,045 for expenses incurred on behalf of the Company.

The fair value of the 4,189,500 Class F Callable warrants granted was estimated at $1.25 each, for a total of amount of $5,236,875, by using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 159.33%, risk-free interest rates of 4.76%, and expected lives of 3 years.

During the quarter ended May 31, 2008, 20,000 Class C warrants, 20,000 Class D warrants and 175,000 Class F Callable warrants were exercised with aggregate proceeds of $239,750.

8. Warrants

As of May 31, 2008, the following warrants were outstanding:

(a) 100,000 Class D Warrants which entitle the holders to purchase 100,000 common shares of the Company at $0.55 each expiring on April 23, 2009.

(b) 120,000 Class E Warrants which entitle the holders to purchase 120,000 common shares of the Company at $0.60 each expiring on April 23, 2010.

(c) 4,014,500 Class F Callable Warrants which entitle the holders to purchase 4,014,500 common shares of the Company at $1.25 expiring on February 12, 2011.

9. Stock Options

As of May 31, 2008, the Company had an active stock option plan that provides shares available for options granted to employees, directors and others. Options granted to employees under the Company’s option plans generally vest over two to five years or as otherwise determined by the plan administrator. Options to purchase shares expire no later than ten years after the date of grant.

In September 2007, the Company appointed Mr. Nicholas Cucinelli to the positions of President and Chief Executive Officer and granted him options to purchase up to 1,500,000 shares of the Company’s common stock at an exercise price of $4.21.

The fair value of the 1,500,000 options granted was estimated at $4.53 each, for a total of amount of $6,795,000, by using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 187.12%, risk-free interest rates of 4.56%, and expected lives of 5 years.

On February 15, 2008, the Company terminated the stock option agreement granted to Mr. Nicholas Cucinelli in September 2007 for 1,500,000 stock options and simultaneously entered into a 10 year Stock Option Agreement with Mr. Nicholas Cucinelli for 1,250,000 common shares reserved for issuance under the Company’s 2006 Incentive Stock Option Plan, effective immediately. This was accounted for as a modification of the originally issued stock options in accordance with SFAS 123(R) Share-Based Payment.

The 1,250,000 stock options have an exercise price of $1.66 per share. The options vest as follows: (a) 300,000 vest and become exercisable in annual installments of 100,000 for three years, with the first 100,000 vesting on February 8, 2009; (b) 500,000 vest and become exercisable in the event that the Company, or any subsidiary thereof, with the prior approval of the Board of Directors: successfully executes any partnership agreement or joint-venture agreement of any technology under current or future development; or successfully completes the sale any subsidiary; or any technology under current or future development; and (c) 450,000 vest and become exercisable upon: commencing commercial sales of products derived from any technology under current or future development; or successfully achieving commercial gross annual sales exceeding $10,000,000 of those products and/or services which are not derived from technologies under current or future research and development by the Company; or successfully completing the sale of Octillion to a third party, subject to shareholder and Board of Directors approval. All unexercised Options, whether vested or not, expire immediately in the event that Mr. Cucinelli is removed from his position by the Board of Directors, shareholders or voluntarily resigns from his position.

As 950,000 out of the 1,250,000 stock options will vest based on certain performance conditions, the Company expects that the first 500,000 stock options will vest at around 24 months from the date of grant and the remaining 450,000 stock options will vest at around 36 months from the date of grant The fair value of each batch of stock options will be amortized over their expected service periods. The Company will periodically reassess the probability of the performance conditions being met and the estimated service period of each batch of stock options.

The fair value of the 1,250,000 options granted was estimated at $1.39 each, by using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 166.72%, risk-free interest rates of 2.76%, and expected lives of 5 years.

Additional stock-based compensation expense of $100,000 will be recognized over the remaining requisite service period as a result of the cancellation and re-issuance of stock options.

On March 10, 2008, the Company granted 100,000 stock options to two directors at an exercise price of $1.66 per share. The first 20,000 stock options will vest on February 8, 2009 and then 20,000 stock options will vest every year thereafter. The fair value of the 100,000 options granted was estimated at $1.23 each, for a total of amount of $123,000, by using the Black-Scholes Option Pricing Model with the following weighted average assumptions: dividend yield of 0%, expected volatility of 164.88%, risk-free interest rates of 2.37%, and expected lives of 5 years.

The movement of stock options can be summarized as follows:


			Remaining	Aggregate
		Weighted average	contractual	intrinsic
	Number of options	exercise price	term	value

Outstanding at August 31, 2007	-	$-
Granted	1,600,000	3.00
Effect of Modification	(250,000)	4.21
Outstanding at May 31, 2008	1,350,000	1.66	9.72 years	$-

Exercisable at May 31, 2008	-	$-

The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of the period ended May 31, 2008 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on May 31, 2008. This amount change is based on the fair market value of the Company’s stock. Total intrinsic

value of options exercised was $nil for the nine months ended May 31, 2008. Weighted average fair value of options granted during the nine months ended May 31, 2008 was $1.66 per share.

A summary of the Company’s unvested stock options and changes during the periods are as follows:


		Fair value
	Number of options	per share

Unvested, August 31, 2007	-	$-
Granted during the period	1,600,000	2.87
Cancelled due to modification	(250,000)	4.53
Vested during the period	-	-
Unvested, May 31, 2008	1,350,000	1.38

During the three-month and nine-month periods ended May 31, 2008 and May 31, 2007, compensation expense of $906,899 (2007: $nil) and $2,682,364 (2007: $nil) were recognized, respectively. As of May 31, 2008, the Company had $4,298,136 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a period of 2.7 years.

The options outstanding and exercisable as of May 31, 2008 can be summarized as follows:


	Outstanding			Exercisable
		Weighted
	Number	Average	Weighted	Number	Weighted
Range of	Outstanding at	Remaining	Average	Exercisable at	Average
Exercise	May 31,	Contractual	Exercise	May 31,	Exercise
Prices	2008	Life (Years)	Price	2008	Price

$1.66	1,350,000	9.72	$1.66	-	$-

The Company does not repurchase shares to fulfill the requirements of options that are exercised. Further, the Company issues new shares when options are exercised.

10. Related Party Transactions

Related party transactions are in the normal course of operations and are recorded at amounts established and agreed between the related parties.

During the three-month and nine-month periods ended May 31, 2008 and May 31, 2007, the Company paid $31,150 (2007: $nil) and $91,499 (2007: $nil) to the current president for services provided to the Company starting from August 2007, respectively.

At May 31, 2008, the Company has an amount of $4,375 (2007: $nil) due to an officer of the Company for his services provided.

The Company’s administrative office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by the Chief Financial Officer and majority shareholder. The Company pays a monthly rent of C$3,200 effective from February 1, 2007. The Company paid rent of $9,543 (2007: $5,538) and $33,085 (2007: $8,260) for the three- month and nine-month periods ended May 31, 2008 and May 31, 2007 respectively.

Mr. Harmel S. Rayat is also an officer, director and majority shareholder of each of International Energy, Inc., PhytoMedical Technologies, Inc., Entheos Technologies, Inc., MicroChannel Technologies Corporation and HepaLife Technologies, Inc.

11. Segment Information

The Company’s business is considered as operating in one segment based upon the Company’s organizational structure, the way in which the operations are managed and evaluated, the availability of separate financial results and materiality considerations.

Item 2. Management's Discussion and Analysis or Plan of Operations

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:

Except for the historical information presented in this document, the matters discussed in this Form 10-Q for the three and nine months ended May 31, 2008, and specifically in the items entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations", or otherwise incorporated by reference into this document, contain "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are identified by the use of forward-looking terminology such as "believes", "plans", "intend", "scheduled", "potential", "continue", "estimates", "hopes", "goal", "objective", expects", "may", "will", "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company.

The reader is cautioned that no statements contained in this Form 10-Q should be construed as a guarantee or assurance of future performance or results. These forward-looking statements involve risks and uncertainties, including those identified within this Form 10-Q. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to update this information. Readers are urged to carefully review and consider the various disclosures made by the Company in this Form 10-Q and in the Company's other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company's business.

Overview

We were incorporated in the State of Nevada on May 5, 1998, with an authorized capital stock of 100,000,000 shares of common stock, $0.001 par value, and 1,000,000 shares of preferred stock, par value $0.10. As of July 10, 2008, 57,754,600 shares of common stock were issued and outstanding; there are no preferred shares issued and outstanding.

Our corporate headquarters is located at 2638 Lapeer Road, Suite 2, Auburn Hills, MI. Our telephone number is (800) 213-0689.

Octillion Corp., together with its wholly owned subsidiaries, is a next generation technology incubator focused on the identification, acquisition, development, and commercialization of alternative and renewable energy technologies. Among our current research and development activities is the development of a technology that could adapt existing home and office glass windows into ones capable of generating electricity from solar energy without losing significant transparency or requiring major changes in manufacturing infrastructure.

UIUC Silicon Nanoparticle Energy Technology

On August 25, 2006, through our wholly owned subsidiary, Sungen Energy, Inc. (“Sungen”), we entered into a Sponsored Research Agreement (“UIUC Sponsored Research Agreement”) with the University of Illinois at Urbana-Champaign (“UIUC”) for the development of a new patent-pending technology to integrate films of silicon nanoparticle material on glass substrates, acting as photovoltaic solar cells that have the potential to convert normal home and office glass windows into ones capable of converting solar energy into electricity, with limited loss of transparency and minimal changes in manufacturing infrastructure (the “UIUC Silicon Nanoparticle Energy Technology”). On July 23, 2007, the Company through its wholly owned subsidiary, Sungen, amended its Sponsored Research Agreement with the UIUC Pursuant to this amended Sponsored Research Agreement, Octillion agreed to provide additional funds to the previously awarded amount of $219,201 to the University of Illinois in order to accelerate the development of films of silicon nanoparticle material composed of nanosilicon photovoltaic solar cells that have the potential to convert solar radiation to electrical energy.

The process of producing silicon nanoparticles is supported by ten (10) issued US Patents, seven (7) pending US patents, two (2) issued foreign counterpart patents and nineteen (19) pending foreign counterpart patents. Collectively, such patents are referred to as the “UIUC Patents.” The initial term of the UIUC Sponsored Research Agreement expires on August 22, 2008; during this period we have agreed to advance a total of $422,818 to fund the research and development activities.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosures. We review our estimates on an ongoing basis.

We consider an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made; and changes in the estimate or different estimates that could have been made could have a material impact on our results of operations or financial condition.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel related costs, legal costs, including intellectual property, investor relations costs, stock based compensation costs, accounting costs, and other professional and administrative costs.

Research and Development Costs

Research and development costs represent costs incurred to develop our technology incurred pursuant to our sponsored research agreement with UIUC. This agreement includes salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, contract services and other costs. We charge all research and development expenses to operations as they are incurred except for prepayments which are capitalized and amortized over the applicable period. We do not track research and development expenses by project. In addition costs for third party laboratory work might occur.

Results of Operation

The Company has yet to establish any history of profitable operations. The Company has incurred operating losses of $1,606,403 and $239,894 for the three months ended May 31, 2008 and May 31, 2007, respectively. As a result, at May 31, 2008, the Company has an accumulated deficit of $6,795,479.

We expect that any future revenues will not be sufficient to sustain our operations for the foreseeable future. Our profitability will require the successful completion of our research and development programs, and the subsequent commercialization of the results or of products derived from such research and development efforts. No assurances can be given when this will occur or that we will ever be profitable.

Three and Nine Months Ended May 31, 2008 and 2007

The Company had no revenues in the three and nine months ended May 31, 2008 and May 31, 2007. Our expenses increased 570% to $1,606,403 in the three months ended May 31, 2008, from $239,894 in the same period in 2007. This increase of $1,366,509 for the three months ended May 31, 2008 compared to the same period in 2007 was primarily attributable to increases in stock based compensation expenses and investor relations expenses.

Interest income increased 93% to $16,761 in the three months ended May 31, 2008, from $8,674 during the same period in 2007, reflecting higher than average cash balances maintained during most of the second quarterly period in 2008. For the nine months ended May 31, 2008 and in the same period in 2007, interest income has increased 126% to $41,364 from $18,312, reflecting higher than average cash balances maintained during most of the first three fiscal quarterly periods in 2008.

We incurred net losses of $1,594,103 and $201,512 during the three months ended May 31, 2008 and in the same period in 2007, respectively, and we also incurred net losses of $4,403,580 and $765,117for the nine months ended May 31, 2008 and May 31, 2007.

Liquidity and Capital Resources

As of May 31, 2008, the Company had a cash balance of $3,476,404. The Company has financed its operations primarily through cash on hand during the nine months ended May 31, 2008.

Net cash flows used in operating activities was $1,585,170, for the nine month period ending May 31, 2008, compared to net cash flows used of $723,506 for the same period in 2007, primarily due to an increase in stock based compensation expenses and investor relations expenses.

Net cash provided by financing activities was $3,635,705 for the nine months period ending May 31, 2008, compared to $1,550,000 for the same period in 2007. The Company has financed its operations primarily from cash on hand, warrant exercises and a private placement.

Related Party Transactions

Related party transactions are in the normal course of operations and are recorded at amounts established and agreed between the related parties.

During the three-month and nine-month periods ended May 31, 2008 and May 31, 2007, the company paid $31,150 (2007: $nil) and $91,499 (2007: $nil) to the current president for services provided to the Company starting from August 2007, respectively.

At May 31, 2008, the Company has an amount of $4,375 (2007: $nil) due to an officer of the Company for his services provided.

The Company’s administrative office is located at 1628 West 1st Avenue, Suite 216, Vancouver, British Columbia, Canada, V6J 1G1. These premises are owned by a private corporation controlled by the Chief Financial Officer and majority shareholder. The Company pays a monthly rent of C$3,200 effective from February 1, 2007. The Company paid rent of $9,543 (2007: $5,538) and $28,885 (2007: $8,260) for the three- month and nine-month periods ended May 31, 2008 and May 31, 2007 respectively.

Off-Balance Sheet Items

We do not currently have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Recent Accounting Pronouncements

based upon existing authoritative pronouncements; analogy to such pronouncements if not within their scope; or a reasonable, rational, and consistently applied accounting policy election. EITF Issue No. 07-1 is effective for financial statements beginning after December 15, 2008 and is to be applied retrospectively to all periods presented for collaborative arrangements existing as of the date of adoption. The Company is evaluating the impact, if any, the adoption of this consensus will have on the results of operations, financial position or cash flows.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk is confined to our cash equivalents and short-term investments. We invest in high-quality financial instruments; primarily money market funds, federal agency notes, and US Treasury obligations, with the effective duration of the portfolio within one year which we believe are subject to limited credit risk. We currently do not hedge interest rate exposure. Due to the short-term nature of our investments, we do not believe that we have any material exposure to interest rate risk arising from our investments.

ITEM 4. Controls and Procedures

Disclosure controls and procedures.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report. Based on this evaluation, our chief executive officer and chief financial officer concluded as of May 31, 2008 that our disclosure controls and procedures were effective such that the information required to be disclosed in our United States Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended May 31, 2008 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

None

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)

32.1

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

(b) Reports on Form 8-K

None

SIGNATURES

Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 10th day of July, 2008.

Octillion Corp.

/s/ Nicholas Cucinelli

Nicholas Cucinelli

President, Chief Executive Officer

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

Signature

Title

Date

/s/ Nicholas Cucinelli

President, Chief Executive Officer

July 10, 2008

Nicholas Cucinelli

Director

/s/ Harmel S. Rayat

Secretary, Treasurer, Chief Financial Officer

July 10, 2008

Harmel S. Rayat

Director