nene_posam.htm

OUTSTANDING EQUITY AWARDS AT FISCAL-YEAR END

The following table sets forth information regarding equity awards that have been previously awarded to each of the Named Executives and which remained outstanding as of August 31, 2012.

Option Awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option

Expiration Date

John A. Conklin (1)

233,333

433,333

1.65

8/9/20

(1) On August 9, 2010, we entered into an employment agreement with Mr. John A. Conklin, our President, Chief Executive Officer, and Chief Financial Officer.

The following table summarizes information about stock options outstanding and exercisable at August 31, 2012:

		Stock Options Outstanding						Stock Options Exercisable
				Weighted		Weighted				Weighted Average		Weighted
Range of		Number of		Average		Average		Number		Remaining		Average
Exercise		Options		Contractual		Exercise		Of Options		Contractual		Exercise
Prices		Outstanding		Life (years)		Price		Exercisable		Life (Years)		Price
$	1.32		50,001		2.29	$	1.32		50,001		2.29	$	1.32
$	1.65		666,667		7.95	$	1.65		233,333		7.95	$	1.65
$	2.50		10,000		8.60	$	2.50		4,000		8.60	$	2.50
$	2.55		33,334		6.03	$	2.55		19,998		6.03	$	2.55
$	3.27		23,334		6.48	$	3.27		18,334		5.91	$	3.27
$	4.98		16,667		5.53	$	4.98		13,332		5.53	$	4.98
$	5.94		50,001		8.32	$	5.94		35,001		8.32	$	5.94
$	6.51		11,667		2.08	$	6.51		11,667		2.08	$	6.51
Total			861,671		7.41	$	2.10		385,666		6.80	$	2.39

Payments Upon Termination or Change In Control

There are no understandings or agreements known by management at this time which would result in a change in control.

On August 9, 2010, we entered into an Employment Agreement with Mr. John A. Conklin pursuant to which the Board approved an annual salary of $150,000, a stipend of $1,000 per month during the term of Mr. Conklin’s Employment Agreement to cover medical insurance premiums until such time as we can provide an alternative medical insurance plan, and the grant of a stock option to purchase up to 666,666 shares of our common stock, subject to certain vesting requirements, at an exercise price of $1.65 per share. On January 1, 2011, Mr. Conklin’s annual salary was increased to $175,000 and his stipend was increased to $1,334 per month. Effective January 1, 2012, Mr. Conklin's medical stipend was increased to $1,778 per month. Effective April 1, 2012, Mr. Conklin's annual salary was increased to $190,000. Pursuant to the terms of the Employment Agreement between us and Mr. Conklin, in the event that Mr. Conklin’s employment is terminated by us, he will be entitled to a severance payment (the “Severance Payment”) equal to one month salary for every four months that he has been employed by us, up to a maximum of four months’ salary. Pursuant to the terms of the stock option agreement between us and Mr. Conklin, if the Employment Agreement is terminated, as of the date of the termination of the Employment Agreement (the “Termination Date”), no further installments of the stock option shall vest and the maximum number of option shares that Mr. Conklin may purchase is limited to the number of options that were vested as of the Termination Date. Mr. Conklin has the right, at any time within 120 days of the Termination Date (the “Termination Exercise Period”) to exercise the vested options. Any unexercised vested options will terminate following the expiration of the Termination Exercise Period.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of December 1, 2012, by (i) each person (or group of affiliated persons) who is known by us to beneficially own more than 5% of our common stock; (ii) each of our directors; (iii) each of our Named Executive Officers; and (iv) all of our directors and executive officers as a group.

Unless otherwise stated below, each such person has sole voting and investment power with respect to all such shares.

Name and Address of Beneficial Owner (1)	Number of shares Beneficially Owned (2)		Percent of Class Owned (2)
Directors and Officers
John A. Conklin (3)		233,333	1.1%
Jatinder Bhogal (4)		38,333	*
Alastair Livesey (5)		41,666	*
Joseph Sierchio (6)		38,333	*
Javier Jimenez (7)		11,667	*
Peter Fusaro (8)		11,667	*
All Directors and Officers as a Group		374,999	1.8%

5% shareholders
Kalen Capital Corporation (9) 216 – 1628 West 1st Avenue Vancouver, BC V6J 1G1		8,991,534	43.6%

* less than 1%

(1) Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of Company common stock and except as indicated the address of each beneficial owner is 9192 Red Branch Road, Suite 110, Columbia, MD 21045

(2) Calculated pursuant to rule 13d-3(d) of the Exchange Act. Beneficial ownership is calculated based on 20,638,360 shares of Common Stock issued and outstanding on a fully diluted basis as of December 1, 2012. Under Rule 13d-3(d) of the Exchange Act, shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.

(3) Represents stock options to purchase 233,333 shares of our common stock which have fully vested.

(4) Represents stock options to purchase 38,333 shares of our common stock which have fully vested.

(5) Represents stock options to purchase 41,666 shares of our common stock which have fully vested.

(6) Includes stock options to purchase 38,333 shares of our common stock which have fully vested.

(7) Represents stock options to purchase 11,667 shares of our common stock which have fully vested.

(8) Represents stock options to purchase 11,667 shares of our common stock which have fully vested.

(9) Kalen Capital Corporation is a private Alberta corporation wholly owned by Mr. Harmel Rayat (our former director and officer). In such capacity, Mr. Rayat may be deemed to have beneficial ownership of these shares. The number of shares reflected above is as of November 15, 2012 and based upon the review of the Company's transfer records as of said date.

Transactions With Related Persons, Promoters

and Certain Control Persons

We do not have a formal written policy for the review and approval of transactions with related parties. However, our Code of Ethics and Corporate Governance Principles require actual or potential conflict of interest to be reported to the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board and outside legal counsel review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director’s independence. If the transaction is deemed to present a conflict of interest, the Board will determine the appropriate action to be taken.

Review, Approval or Ratification of Transactions with Related Persons

Our unwritten policy with regard to transactions with related persons is that all material transactions are to be reviewed by the entire Board for any possible conflicts of interest. In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms and conditions of the transaction; and (v) the terms available to unrelated parties or the employees generally. The Board will then document its findings and conclusion in written minutes

Transactions with Related Persons

The Board is responsible for review, approval, or ratification of "related-person transactions" involving New Energy Technologies, Inc. or its subsidiaries and related persons. Under SEC rules (Section 404 (a) of Regulation S-K), a related person is a director, officer, nominee for director, or 5% stockholder of the company since the beginning of the previous fiscal year, and their immediate family members. New Energy Technologies, Inc. is required to report any transaction or series of transactions in which the company or a subsidiary is a participant, the amount involved exceeds $120,000, and a related person has a direct or indirect material interest.

The Board has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:

any transaction with another company for which a related person's only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company's shares, if the amount involved does not exceed the greater of $1 million or 2% of that company's total annual revenue;

·	compensation to executive officers determined by the Board;

·	compensation to directors determined by the Board;

·	transactions in which all security holders receive proportional benefits; and

·	banking-related services involving a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar service.

The Board reviews transactions involving related persons who are not included in one of the above categories and makes a determination whether the related person has a material interest in a transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. The Board reviews all material facts related to the transaction and takes into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent of the related person's interest in the transaction; and, if applicable, the availability of other sources of comparable products or services.

The following are related party transactions for the years ended August 31, 2012 and 2011:

The law firm of Sierchio & Company, LLP (“S&C LLP”), of which Joseph Sierchio, one of our directors, is a principal, has provided counsel to us since the Company’s inception. In July 2008, the Company asked Mr. Sierchio to join the Company’s Board. During the years ended August 31, 2012 and 2011, the law firm of S&C LLP provided $176,404 and $198,142, respectively, of legal services. At August 31, 2012, the Company owed S&C LLP $22,198 which is included in accounts payable.

Description of Our Securities

Our authorized capital stock consists of 300,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.10 per share. As of December 1, 2012, there were 20,638,360 shares of our common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Reverse Stock Split

On March 16, 2011, pursuant to a February 7, 2011, written consent signed by the shareholders owning a majority of our issued and outstanding shares and a February 24, 2011, unanimous written consent of our Board, we underwent a one-for-three reverse stock split whereby holders of three shares of our common stock as of March 15, 2011, received one share of our common stock after the reverse stock split with all fractional shares being rounded up to the nearest whole share; the reverse stock split was declared effective by the Financial Industry Regulatory Authority as of March 21, 2011.

Offering

We are offering up to a maximum of 1,875,000 Units at a purchase price of $0.64 per Unit. Each Unit consists of one (1) share of our common stock, $0.001 par value per share and one-half (1/2) Series H Warrant. Each full Series H Warrant entitles the holder to purchase one additional share of our common at a purchase price of $0.83 for a period of three years from the date of issuance; no fractional shares will be sold. Upon issuance, the shares underlying the Units will be validly issued, fully paid and non-assessable.

Common Stock

Subject to any special voting rights of any series of preferred stock that we may issue in the future, each holder is entitled to one vote for each share held on all matters to be voted upon by the stockholders, including the election of directors. The shares of common stock do not have cumulative voting rights. This means that the holders of more than 50% of the shares of common stock can elect all of our directors, subject to the rights of any outstanding series of preferred stock.

The holders of common stock are entitled to receive a pro-rata share of dividends, if any, as may be declared from time to time by the board out of funds legally available for the payment of dividends, subject to any preferential dividend rights of any outstanding series of preferred stock.

In the event of our liquidation, dissolution, or winding up, the holders of common stock are entitled to share pro-rata in all assets remaining after payment of our liabilities and subject to the prior rights of any outstanding series of preferred stock. Shares of common stock have no preemptive, conversion, or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

Our Board is authorized, subject to certain limitations prescribed by law, without further stockholder approval, to issue from time to time up to an aggregate of 1,000,000 shares of preferred stock in one or more series and to fix or alter the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of each such series thereof, including the dividend rights, dividend rates, conversion rights, voting rights and terms of redemption of shares constituting any series or designations of such series The rights of holders of our common stock may be subject to, and adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change of control and may adversely affect the voting and other rights of holders of our common stock.

Warrants

As of the date of this prospectus, there are 625,000 Series G Warrants outstanding allowing the holder thereof (the “Holder”) to purchase up 625,000 shares of our common stock. The Series G Warrants are exercisable through April 17, 2016, with an initial exercise price of 84% of the average of the closing price for our common stock as reported on the OTCQB for the five trading days immediately preceding the closing of the April 17, 2012 Bridge Loan, or $1.92 per share, subject to adjustment as provided therein. Additionally, the Series G Warrants contain a cashless exercise provision and require us to file a registration statement with the SEC for the shares issuable upon exercise of the Series G Warrants within 60 days receipt of a written request by the Holder. In addition, we are offering up to 937,500 Series H Warrants as part of the Units. Each full Series H Warrant entitles the holder to purchase one additional share of our common at a purchase price of $0.83 for a period of three years from the date of issuance; no fractional shares will be sold.

Options

As of the date of this prospectus, there are options outstanding to purchase an aggregate of 861,671 shares of our common stock issued to various persons and entities at prices ranging between $1.32 and $6.51, 385,666 of which have vested. If issued, the shares underlying these options would increase the number of shares of our common stock currently outstanding and will dilute the holdings and voting rights of our then-existing shareholders.

Shares Eligible for Resale

A liquid trading market for our common stock may not develop or be sustained after the completion of this offering. Future sales of substantial amounts of common stock, including shares of common stock issued upon exercise of outstanding options and exercise of the warrants offered in this Prospectus in the public market after this offering or the anticipation of those sales could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of our equity securities.

Rule 144

There were 20,638,360 shares of our common stock issued and outstanding at December 1, 2012, of which 7,599,868 shares are deemed “restricted securities,” within the meaning of Rule 144. Absent registration under the Securities Act, the sale of such shares is subject to Rule 144, as promulgated under the Securities Act.

In general, under Rule 144, subject to the satisfaction of certain other conditions, a person deemed to be one of our affiliates, who has beneficially owned restricted shares of our common stock for at least one year is permitted to sell in a brokerage transaction, within any three-month period, a number of shares that does not exceed the greater of 1% of the total number of outstanding shares of the same class, or, if our common stock is quoted on a stock exchange, the average weekly trading volume during the four calendar weeks preceding the sale, if greater.

Rule 144 also permits a person who presently is not and who has not been an affiliate of ours for at least three months immediately preceding the sale and who has beneficially owned the shares of common stock for at least nine months to sell such shares without restriction other than the requirement that there be current public information as set forth in Rule 144. To the extent that Rule 144 is otherwise available, this provision is currently applicable to all of the restricted shares. If a non-affiliate has held the shares for more than one year, such person may make unlimited sales pursuant to Rule 144 without restriction.

The possibility that substantial amounts of our common stock may be sold under Rule 144 into the public market may adversely affect prevailing market prices for the common stock and could impair our ability to raise capital in the future through the sale of equity securities. Please refer to “Risk Factors.”

Plan of Distribution

We are offering up to 1,875,000 Units at a purchase price of $0.64 per Unit ($1,200,000 in the aggregate). Each Unit consists of one (1) share of our common stock, $0.001 par value per share and one-half (1/2) Series H Warrant. Each full Series H Warrant entitles the holder to purchase one additional share of our common at a purchase price of $0.83 for a period of three years from the date of issuance; no fractional shares will be sold.

We are offering the Units directly to the public through our Chief Executive Officer and President on a “best efforts, no minimum,” basis. This means that:

·	we will have no requirement to sell any specific number of Units;

·	we will not return any funds received from investors in the event that we do not sell all of the securities being offered, or if the funds received are insufficient for the purposes set forth herein; and

·	we will not deposit the proceeds from this offering in an escrow, trust, or similar account

Accordingly, the proceeds from this offering will be immediately available to us for our use.

Offering Price

The offering price of $0.64 per Unit was arbitrarily determined by us and does not bear any significant relationship to our assets and is not necessarily reflective of the inherent or current price, potential market or resale value, of our shares. Please refer to “Determination of Offering Price.”

Number of Shares Outstanding

There were 20,638,360 shares of our common stock issued and outstanding at December 1, 2012. If all of the Units offered are sold, and without giving effect to the exercise of outstanding options and warrants, there will be 22,513,360 shares issued and outstanding.

Duration of Offering

The Offering will terminate 180 days following the effectiveness of this registration statement. We have the right to extend the Offering, at our sole discretion and without notice, for an additional 90 days.

In order to buy our shares, you must complete and execute the subscription agreement accompanying this prospectus and make payment of the purchase price for each Share purchased either in cash, by check payable to the order of “New Energy Technologies, Inc.” or by wire transfer pursuant to instruction from us.

Solicitation for purchase of the Units will be made only by means of this prospectus and communications with our President and Chief Executive Officer, Mr. John Conklin:

·	will not receive any commission in connection with the sale of any securities registered in this offering;

·	is not and has not been an associated person of a broker-dealer within the preceding 12 months;

·	does not participate in selling an offering of securities for any issuer more than once every 12 months;

·	has not been subject to any statutory disqualifications as defined in Section 3(a)(39) of the Exchange Act; and

·	intends to primarily perform, at the end of this offering, substantial duties on behalf of the issuer otherwise than in connection with transactions in securities.

As a result, Mr. Conklin will not register as a broker-dealer with the SEC pursuant to Section 15 of the Securities Act in reliance of Rule 3a4-1 of the Exchange Act which sets forth the above mentioned conditions under which a person associated with an issuer may participate in the offering of the issuer’s securities and not be deemed a broker-dealer.

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for the Units will be accepted or rejected within 48 hours after we receive them.

How To Invest

Subscriptions for purchase of Units offered by this prospectus can be made by completing, signing and delivering to us, the following:

·	an executed copy of the Subscription Agreement; and

·	a check, or money wire, payable to the order of “New Energy Technologies, Inc.” in the aggregate amount equal to $0.64 multiplied by the number of Units you wish to purchase.

Resale of our Shares

There is presently only a limited public market for our shares of common stock on the OTCQB. Please refer to “Market Price of and Dividends on Our Common Stock and Related Stockholder Matters” and “Risk Factors.”

Legal Matters

The validity of the shares of common stock offered hereby will be passed upon for New Energy Technologies, Inc. by Sierchio & Company LLP, 430 Park Avenue, Suite 702, New York, New York 10022. Joseph Sierchio, a member of Sierchio & Company LLP, is one of our directors and the beneficial owner of 41,668 shares of our common stock.

Experts

Our consolidated financial statements for the fiscal years ended August 31, 2012 and 2011, appearing herein, have been audited by Peterson Sullivan, LLP, an independent registered public accounting firm, as set forth in its report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Where You Can Find Additional Information

We file periodic reports with the SEC, including quarterly reports and annual reports which include our audited financial statements. This registration statement, including exhibits thereto, and all of our periodic reports may be inspected without charge at the Public Reference Room maintained by the SEC at 100 F Street, NE, Washington, D.C. 20549. You may obtain copies of the registration statement, including the exhibits thereto, and all of our periodic reports after payment of the fees prescribed by the SEC. For additional information regarding the operation of the Public Reference Room, you may call the SEC at 1-800-SEC-0330. The SEC also maintains a website which provides on-line access to reports and other information regarding registrants that file electronically with the SEC at the address: http://www.sec.gov. In addition, you may request a copy of any of our periodic reports filed with the Securities and Exchange Commission at no cost, by writing us at: New Energy Technologies, Inc., 9192 Red Branch Road, Suite 110, Columbia, Maryland 21045, or telephoning us at: (800) 213-0689.

Index to Consolidated Financial Statements

	Page #
Report of Peterson Sullivan LLP		F-1
Consolidated Balance Sheets as of August 31, 2012 and 2011		F-2
Consolidated Statements of Operations for the Years Ended August 31, 2012 and 2011 and the Cumulative Period from Inception (May 5, 1998) to August 31, 2012		F-3
Consolidated Statements of Stockholders’ Equity (Deficit) from Inception (May 5, 1998) to August 31, 2012		F-4
Consolidated Statements of Cash Flows for the Years Ended August 31, 2012 and 2011 and the Cumulative Period from Inception (May 5, 1998) to August 31, 2012		F-5
Notes to Consolidated Financial Statements		F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

New Energy Technologies, Inc.

Columbia, Maryland

We have audited the accompanying consolidated balance sheets of New Energy Technologies, Inc. and Subsidiaries ("the Company") (a development stage company) as of August 31, 2012 and 2011, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and for the cumulative period from May 5, 1998 (inception), to August 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of New Energy Technologies, Inc. and Subsidiaries as of August 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended, and for the cumulative period from May 5, 1998 (inception), to August 31, 2012, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has experienced recurring losses from operations since inception, and has a substantial accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ PETERSON SULLIVAN LLP

Seattle, Washington

November 28, 2012

F-1

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

AUGUST 31, 2012 and 2011

	August 31,			August 31,
	2012			2011
ASSETS
Current assets
Cash and cash equivalents	$	1,046,918		$	2,320,185
Deferred research and development costs		32,595			156,279
Deferred offering costs		-			20,000
Prepaid expenses and other current assets		28,233			49,382
Total current assets		1,107,746			2,545,846

Equipment, net of accumulated depreciation of $5,882 and $463 at August 31, 2012 and 2011		19,966			927
Total assets	$	1,127,712		$	2,546,773

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	63,403		$	119,868
Accrued liabilities		26,231			161,009
Convertible promissory note, net of discount of $999,485 and $0 at August 31, 2012 and 2011		515			-
Total current liabilities		90,149			280,877

Commitments and contingencies

Stockholders' equity
Preferred stock: $0.10 par value; 1,000,000 shares authorized, no shares issued and outstanding at August 31, 2012 and 2011		-			-
Common stock: $0.001 par value; 300,000,000 shares authorized, 20,638,360 shares issued and outstanding at August 31, 2012 and 2011		20,638			20,638
Additional paid-in capital		13,798,282			12,593,184
Deficit accumulated during the development stage		(12,781,357	)		(10,347,926	)
Total stockholders' equity		1,037,563			2,265,896
Total liabilities and stockholders' equity	$	1,127,712		$	2,546,773

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

F-2

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED AUGUST 31, 2012 AND 2011 AND FOR THE

PERIOD FROM INCEPTION (MAY 5, 1998) TO AUGUST 31, 2012

							Cumulative
							May 5, 1998
	Year Ended August 31,						(Inception) to
	2012			2011			August 31, 2012

Revenue	$	-		$	-		$	-

Operating expense
Selling, general and administrative		1,648,086			3,173,558			11,385,992
Research and development		672,443			451,372			2,590,139
Total operating expense		2,320,529			3,624,930			13,976,131

Loss from operations		(2,320,529	)		(3,624,930	)		(13,976,131	)

Other income (expense)
Interest income		-			-			98,582
Interest expense - other		(26,231	)		(1,391	)		(38,624	)
Interest expense - accretion of debt discount		(515	)		-			(515	)
Loss on disposal of fixed assets		-			-			(5,307	)
Gain on dissolution of foreign subsidiary		-			-			59,704
Foreign exchange loss		(55	)		(1,488	)		(86,428	)
Change in fair value of warrant liability		-			8,059			2,128,331
Payable written off		156,109			-			186,109
Total other income (expense)		129,308			5,180			2,341,852

Loss from continuing operations		(2,191,221	)		(3,619,750	)		(11,634,279	)

Loss from discontinued operations		(242,210	)		-			(404,307	)

Net loss	$	(2,433,431	)	$	(3,619,750	)	$	(12,038,586	)

Basic and Diluted Loss per Common Share:
Continuing operations	$	(0.11	)	$	(0.18	)
Discontinued operations	$	(0.01	)	$	-
Total	$	(0.12	)	$	(0.18	)

Weighted average number of common shares outstanding - basic and diluted		20,638,360			20,396,362

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

F-3

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FROM MAY 5, 1998 (INCEPTION) TO August 31, 2012

	Common Stock					Additional			Accumulated Other Comprehensive			Deficit Accumulated During the Development			Comprehensive			Total Stockholders'
	Shares			Amount		Paid-in Capital			Income (Loss)			Stage			Income (Loss)			Equity (Deficit)
Restricted common stock issued to related parties for management services at $0.001 per share		3,000,000		$	3,000	$	-		$	-		$	-		$	-		$	3,000
Unrestricted common stock sales to third parties at $0.40 per share		375,000			375		149,625			-			-			-			150,000
Net loss for the year ended August 31, 1998													(12,326	)		(12,326	)		(12,326	)
Balance, August 31, 1998		3,375,000			3,375		149,625			-			(12,326	)		(12,326	)		140,674

Net loss for the year ended August 31, 1999													(77,946	)		(77,946	)		(77,946	)
Balance, August 31, 1999		3,375,000			3,375		149,625			-			(90,272	)		(77,946	)		62,728

Net loss for the year ended August 31, 2000													(12,446	)		(12,446	)		(12,446	)
Balance, August 31, 2000		3,375,000			3,375		149,625			-			(102,718	)		(12,446	)		50,282

Net loss for year ended August 31, 2001													(12,904	)		(12,904	)		(12,904	)
Balance, August 31, 2001		3,375,000			3,375		149,625			-			(115,622	)		(12,904	)		37,378

Net loss for the year ended August 31, 2002													(54,935	)		(54,935	)		(54,935	)
Balance, August 31, 2002		3,375,000			3,375		149,625			-			(170,557	)		(54,935	)		(17,557	)

Restricted common stock issued at $.001 per share to two related parties to satisfy outstanding management fees.		10,333,200			10,333		92,999			-			-			-			103,332
Net loss for the year ended August 31, 2003													(97,662	)		(97,662	)		(97,662	)
Balance, August 31, 2003		13,708,200			13,708		242,624			-			(268,219	)		(97,662	)		(11,887	)

Net loss for the year ended August 31, 2004													(19,787	)		(19,787	)		(19,787	)
Balance, August 31, 2004		13,708,200			13,708		242,624			-			(288,006	)		(19,787	)		(31,674	)

Net loss for the year ended August 31, 2005													(103,142	)		(103,142	)		(103,142	)
Balance, August 31, 2005		13,708,200			13,708		242,624			-			(391,148	)		(103,142	)		(134,816	)

Issuance of common stock and warrants at $0.50 per share		1,000,000			1,000		499,000			-			-			-			500,000
Net loss for the year ended August 31, 2006													(157,982	)		(157,982	)		(157,982	)
Balance, August 31, 2006		14,708,200			14,708		741,624			-			(549,130	)		(157,982	)		207,202

Exercise of Class A Warrants at $0.50 per share		1,000,000			1,000		499,000			-			-			-			500,000
Exercise of Class B Warrants at $0.55 per share		1,000,000			1,000		549,000			-			-			-			550,000
Exercise of Class C Warrants at $1.50 per share		326,667			327		489,673			-			-			-			490,000
Exercise of Class D Warrants at $1.65 per share		293,333			293		483,707			-			-			-			484,000
Exercise of Class E Warrants at $1.80 per share		293,333			293		527,707			-			-			-			528,000
Issuance of common stock and warrants at $1.50 per share		333,333			333		499,667			-			-			-			500,000
Dividend paid - spin off of MircoChannel Technologies Corporation		-			-		-			-			(400,000	)		-			(400,000	)
Comprehensive income (loss)
Foreign currency translation adjustments										(1,811	)		-			(1,811	)		(1,811	)
Net loss for the year ended August 31, 2007													(1,442,769	)		(1,442,769	)		(1,442,769	)
Balance, August 31, 2007		17,954,866			17,955		3,790,377			(1,811	)		(2,391,899	)		(1,444,580	)		1,414,622

Common stock and warrants issued for cash and services at $3.00 per Unit		1,225,000			1,225		3,394,730			-			-			-			3,395,955
Exercise of Class C Warrants at $1.50 per share		6,667			7		9,993			-			-			-			10,000
Exercise of Class D Warrants at $1.65 per share		6,667			7		10,993			-			-			-			11,000
Exercise of Class F Warrants at $3.75 per share		58,333			58		218,692			-			-			-			218,750
Stock based compensation		-			-		3,600,303			-			-			-			3,600,303
Comprehensive income (loss)
Foreign currency translation adjustments										12,504			-			12,504			12,504
Net loss for the year ended August 31, 2008													(5,721,545	)		(5,721,545	)		(5,721,545	)
Balance, August 31, 2008		19,251,533			19,251		11,025,089			10,693			(8,113,444	)		(5,709,041	)		2,941,589

Exercise of Class E Warrants at $1.80 per share		6,667			7		11,993			-			-			-			12,000
Exercise of Class F Warrants at $3.75 per share		275,333			275		1,032,225			-			-			-			1,032,500
Stock based compensation		-			-		183,312			-			-			-			183,312

Reversal of stock based compensation due to forfeiture of stock options		-			-		(3,591,093	)		-			-			-			(3,591,093	)
Comprehensive income
Foreign currency translation adjustments										(10,693	)		-			(10,693	)		(10,693	)
Net loss for the year ended August 31, 2009													1,961,175			1,961,175			1,961,175
Balance, August 31, 2009		19,533,533			19,533		8,661,526			-			(6,152,269	)		1,950,482			2,528,790

Stock based compensation		-			-		661,040			-			-			-			661,040

Reversal of stock based compensation due to forfeiture of stock options		-			-		(478,971	)		-			-			-			(478,971	)
Cumulative adjustment upon adoption of ASC 815-40		-			-		(1,785,560	)		-			(342,771	)		-			(2,128,331	)
Net loss for the year ended August 31, 2010													(233,136	)		(233,136	)		(233,136	)
Balance, August 31, 2010		19,533,533			19,533		7,058,035			-			(6,728,176	)		(233,136	)		349,392

Rounding due to reverse one for three stock split effective March 16, 2011		(3	)		-		-			-			-			-			-
Exercise of Class F Warrants at $3.75 per share		1,054,512			1,055		3,953,320			-			-			-			3,954,375
Exercise of stock options		50,318			50		30,750			-			-			-			30,800
Stock based compensation		-			-		2,855,630			-			-			-			2,855,630

Reversal of stock based compensation due to forfeiture of stock options		-			-		(1,304,551	)		-			-			-			(1,304,551	)
Net loss for the year ended August 31, 2011													(3,619,750	)		(3,619,750	)		(3,619,750	)
Balance, August 31, 2011		20,638,360		$	20,638	$	12,593,184		$	-		$	(10,347,926	)		(3,619,750	)	$	2,265,896

Stock based compensation		-			-		237,046			-			-			-			237,046

Reversal of stock based compensation due to forfeiture of stock options		-			-		(31,948	)		-			-			-			(31,948	)
Discount on convertible promissory note due to detachable warrants		-			-		547,050			-			-			-			547,050
Discount on convertible promissory note due to beneficial conversion feature		-			-		452,950			-			-			-			452,950
Net loss													(2,433,431	)		(2,433,431	)		(2,433,431	)
Balance, August 31, 2012		20,638,360		$	20,638	$	13,798,282		$	-		$	(12,781,357	)	$	(2,433,431	)	$	1,037,563

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

F-4

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED AUGUST 31, 2012 AND 2011 AND FOR THE

PERIOD FROM INCEPTION (MAY 5, 1998) TO AUGUST 31, 2012

							Cumulative
							May 5, 1998
	Year Ended August 31,						(Inception) to
	2012			2011			August 31, 2012
Cash flows from operating activities
Loss from continuing operations	$	(2,191,221	)	$	(3,619,750	)	$	(11,634,279	)
Add: loss from discontinued operations		(242,210	)		-			(404,307	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		5,419			463			10,364
Stock based compensation expense		237,046			2,855,630			7,537,331
Reversal of stock based compensation expense due to forfeiture of
stock options		(31,948	)		(1,304,551	)		(5,406,563	)
Change in fair value of warrant liability		-			(8,059	)		(2,128,331	)
Loss on disposal of fixed assets		-			-			5,307
Payable written off		(156,109	)		-			(186,109	)
Common stock issued for services		-			-			3,000
Common stock issued for debt settlement		-			-			103,332
Accretion of debt discount		515			-			515
Changes in operating assets and liabilities:
Decrease (increase) in deferred research and development costs		123,684			(92,072	)		(32,595	)
Decrease (increase) in prepaid expenses and other current assets		41,149			(55,004	)		(28,233	)
Increase (decrease) in accounts payable		(56,465	)		52,315			93,403
Increase (decrease) in accrued liabilities		21,331			4,900			182,340

Net cash used in operating activities		(2,248,809	)		(2,166,128	)		(11,884,825	)

Cash flows from investing activity
Purchase of equipment		(24,458	)		(1,390	)		(35,637	)
Net cash used in investing activity		(24,458	)		(1,390	)		(35,637	)

Cash flows from financing activities
Proceeds from the issuance of common stock, exercise of warrants and stock options, net		-			3,985,175			12,367,380
Repayment of promissory note		-			-			(155,000	)
Proceeds from promissory notes		1,000,000			-			1,155,000
Dividend paid		-			-			(400,000	)
Net cash provided by financing activities		1,000,000			3,985,175			12,967,380

Increase (decrease) in cash and cash equivalents		(1,273,267	)		1,817,657			1,046,918

Cash and cash equivalents at beginning of period		2,320,185			502,528			-

Cash and cash equivalents at end of period	$	1,046,918		$	2,320,185		$	1,046,918

Supplemental disclosure of cash flow information:
Interest paid in cash	$	-		$	1,391		$	12,393
Income taxes paid in cash	$	-		$	-		$	-

Supplemental disclosure of non-cash transactions:
Accrued management fees converted to equity	$	-		$	-		$	103,332
Debt discount recorded for value of warrants issued	$	547,050		$	-		$	547,050
Debt discount recorded for beneficial conversion feature	$	452,950		$	-		$	452,950
Warrants issued for broker commissions	$	-		$	-		$	642,980

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

F-5

NEW ENERGY TECHNOLOGIES, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2012 AND 2011

NOTE 1 - Organization, Going Concern and Summary of Significant Accounting Policies

Organization

New Energy Technologies, Inc. (the “Company”) was incorporated in the State of Nevada on May 5, 1998, under the name “Octillion Corp.” On December 2, 2008, the Company amended its Articles of Incorporation to effect a change of name to New Energy Technologies, Inc. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Sungen Energy, Inc. (“Sungen”), Kinetic Energy Corporation (“KEC”), and New Energy Solar Corporation (“New Energy Solar”).

Sungen was incorporated on July 11, 2006, in the State of Nevada and is currently inactive.

KEC was incorporated on June 19, 2008, in the State of Nevada and holds the patents related to the Company’s MotionPower™ Technology. The Company’s business activities related to the MotionPower™ Technology are conducted through KEC.

New Energy Solar was incorporated on February 9, 2009, in the State of Florida and has entered into a License Agreement, an Addendum to the License Agreement, an Option Agreement and a Sponsored Research Agreement with the University of South Florida Research Foundation, Inc.

On March 16, 2011, pursuant to the Consents, the Company filed a Certificate of Amendment to its Certificate of Incorporation increasing its authorized shares of common stock, $0.001 par value, from 100,000,000 to 300,000,000.

On August 19, 2011, the Company established Nakoda, a California corporation and wholly-owned subsidiary of the Company, which began operations in September 2011. Nakoda is an energy savings and management corporation that provides a broad range of energy solutions and savings projects with the goal of implementing energy conservation, load management, and reducing building energy consumption in target markets. Due to the high costs associated with growing operations and difficult financing environment, management suspended all Nakoda related operations as of November 30, 2011. On January 20, 2012, management completed the sale of Nakoda Energy, Inc. as described pursuant to a Stock Purchase Agreement. The Company did not recognize any revenue from Nakoda related operations nor were there any recorded assets or liabilities as of and during the years ended August 31, 2012 and 2011. During the year ended August 31, 2012, The Company recognized a loss of $242,210 from discontinued operations, of which $102,250 of this loss resulted from the disposition.

The Company is a renewable and alternative energy company, actively developing two novel technologies for generating sustainable electricity, one of which harvests solar energy of the sun and artificial light, and the other harvests kinetic energy present in moving vehicles. The Company’s proprietary, patent-pending technologies and products, which are the subjects of fifty-six (56) patent-filings, have been invented, designed, engineered, and prototyped in preparation for further field testing, product development, and commercial deployment.

The Company’s SolarWindow™ Technology generates electricity when glass surfaces are sprayed with electricity-generating coatings, creating, semi-transparent, see-through solar cells. If successfully developed, SolarWindow™ could potentially be used on any of the more than 85 million commercial and residential buildings in the United States alone (U.S. Census Bureau, 2007 American Housing Survey & U.S. Energy Information Administration, 2003 Commercial Buildings Energy Consumption Survey).

The Company’s MotionPower™ Technology harvests the available "kinetic" or "motion" energy of cars, trucks, buses, and heavy commercial vehicles when they slow down before coming to a stop. MotionPower™ converts this captured energy into electricity. If successfully developed, MotionPower™ could potentially be used to harvest kinetic energy generated by any of the estimated 250 million vehicles registered in America (U.S. Department of Transportation Federal Highway Administration, 2008 Highway Statistics), which drive approximately six billion miles on our nation’s roadways every day (U.S. Environmental Protection Agency).

F-6

The Company’s product development programs involve ongoing research and development efforts, and the commitment of significant resources to support the extensive invention, design, engineering, testing, prototyping, and intellectual property initiatives carried-out by its contract engineers, scientists, and consultants.

Going Concern

The Company is a development stage company, does not have any commercialized products and has not generated any revenue since inception. The Company has an accumulated deficit of $12,781,357 as of August 31, 2012, and does not have positive cash flows from operating activities. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business.

In its report with respect to the Company’s financial statements for the year ended August 31, 2012, the Company’s independent auditors expressed substantial doubt about the Company’s ability to continue as a going concern. Because the Company has not yet generated revenues from its operations and does not expect to do so in the near future, its ability to continue as a going concern is wholly dependent upon its ability to obtain additional financing. Currently, the Company is seeking additional financing but has no commitments to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all.

As of August 31, 2012, the Company had cash and cash equivalents of $1,046,918. The Company will remain engaged in research and product development activities at least through February, 2013. Based upon its current and near term anticipated level of operations and expenditures, the Company believes that, absent any modification or expansion of its existing research, development and testing activities, cash on hand should be sufficient to enable it to continue operations for the next six months. However, any significant expansion in scope or acceleration in timing of the Company’s current research and development activities, or commencement of any marketing and sales activities, will require additional funds.

If adequate funds are not available on reasonable terms or at all, it would result in a material adverse effect on the Company’s business, operating results, financial condition and prospects. In particular, the Company may be required to delay, reduce the scope of or terminate one or more of its research programs, sell rights to its SolarWindow™ Technology and/or MotionPowerTM Technology or other technologies or products based upon such technologies, or license the rights to such technologies or products on terms that are less favorable to the Company than might otherwise be available.

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

Summary of Significant Accounting Policies

Principles of Consolidation

These consolidated financial statements presented are those of the Company and its wholly-owned subsidiaries, Sungen, KEC, and New Energy Solar. All significant intercompany balances and transactions have been eliminated.

F-7

Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions.

Cash and Cash Equivalents

Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. The Company has amounts deposited with financial institutions in excess of federally insured limits.

Fair Value Measurement

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of our notes payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Research and Development

Research and development costs represent costs incurred to develop the Company’s technology, including salaries and benefits for research and development personnel, allocated overhead and facility occupancy costs, supplies, equipment purchase and repair and other costs. Research and development costs are expensed when incurred, except for nonrefundable advance payments for future research and development activities which are capitalized and recognized as expense as the related services are performed.

Stock-Based Compensation

The Company measures all employee stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The Company uses the Black-Scholes-Merton formula to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes-Merton formula requires management to make assumptions regarding the option lives, expected volatility, and risk free interest rates. See “Note 6 - Capital Stock” and “Note 7 - Stock Options” for additional information on the Company’s stock-based compensation plans.

F-8

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

Segment Reporting

The Company’s business is considered to be 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.

Net Income (Loss) Per Share

The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See “Note 8 - Net Loss Per Share” for further discussion.

All share and per share amounts reflect the 1-for-3 reverse stock split declared effective on March 21, 2011, by FINRA.

Recently Adopted Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company believes that none of the new standards will have a significant impact on its consolidated financial statements.

NOTE 2 - Accounts Payable

At August 31, 2012, accounts payable totaling $63,403 consisted of $24,863 of professional services and $38,540 of trade payables. Accrued liabilities consisted of $26,231 of accrued interest on the Company's $1,000,000 outstanding bridge Loan agreement dated April 17, 2012.

At August 31, 2011, accounts payable totaling $119,868 consisted of $52,029 of professional services and $67,839 of trade payables. Accrued liabilities consisted of $156,109 due to the University of Illinois that was written off in 2012 (See “Note 4 - SolarWindow™ Technology;” University of Illinois at Urbana-Champaign Sponsored Research Agreement), $1,900 due an investor relations firm and $3,000 due to Veryst Engineering LLC.

F-9

NOTE 3 - Convertible Promissory Note

On April 17, 2012, the Company entered into a Bridge Loan Agreement (the “Loan Agreement”) with 1420524 Alberta Ltd. (the “Creditor”) pursuant to which the Company borrowed $1,000,000 at an annual interest rate of 7% (the “Loan”), compounded quarterly; following the occurrence of an event of default, as further specified in the Loan Agreement, the annual interest rate would increase to 15%. The Loan was evidenced by a promissory note with a maturity date of the earlier of: (a) the closing of any equity financing by us in excess of $1,000,000, or (b) April 16, 2013. As a condition to the Creditor’s entry into the Loan Agreement, we issued the Creditor 625,000 Series G Stock Purchase Warrants (the “Series G Warrants”), which are exercisable through April 17, 2016, with an initial exercise price of 84% of the average of the closing price for our common stock as reported on the OTCQB for the five trading days immediately preceding the closing of the Loan, or $1.92 per share, subject to adjustment as provided therein. Additionally, the Series G Warrants contain a cashless exercise provision and require us to file a registration statement with the SEC for the shares issuable upon exercise of the Series G Warrants within 60 days receipt of a written request by the Creditor. The Creditor may elect, in its sole discretion, to convert all or any portion of the outstanding principal amount of the Loan, and any or all accrued and unpaid interest thereon into shares of our common stock at an initial fixed conversion price equal to seventy (70%) percent of the average of the closing price for the Company’s common stock as reported on the OTCQB for the five trading days immediately preceding the closing of the Loan, or $1.60 per share subject to adjustment as provided therein.

The Company first allocated between the Loan and the warrants based upon their relative fair values. The estimated fair value of the warrants issued with the Loan of $1,207,750 was calculated using the Black-Scholes option pricing model and the following assumptions: market price of common stock - $2.12 per share; estimated volatility - 167%; risk free interest rate - 0.88%; expected dividend rate - 0% and expected life - 3.0 years. This resulted in allocating $547,050 to the warrants and $452,950 to the Loan.

Next, the intrinsic value of the beneficial conversion feature was computed as the difference between the fair value of the common stock issuable upon conversion of the Loan and the total price to convert based on the effective conversion price. The calculated intrinsic value was $872,050. As this amount resulted in a total debt discount that exceeds the loan proceeds, the amount recorded for the beneficial conversion feature was limited to $452,950. The resulting $1,000,000 discount to the Loan is being accreted over the one year term of the Loan using the effective interest method.

During the year ended August 31, 2012, the Company recognized $26,231 of interest expense related to this Note and $515 of accretion related to the debt discount. The remaining debt discount of $999,485 will be amortized through April 16, 2013.

NOTE 4 - SolarWindow™ Technology

Stevenson-Wydler Cooperative Research and Development Agreement with the Alliance for Sustainable Energy

On March 18, 2011, in efforts to advance the commercial development of the SolarWindow™ Technology, the Company entered into a Stevenson-Wydler Cooperative Research and Development Agreement (the “CRADA”) with the Alliance for Sustainable Energy, LLC, which is the operator of The National Renewable Energy Laboratory (“NREL”) under its U.S. Department of Energy contract. Under terms of the CRADA, NREL researchers will make use of the Company’s exclusive intellectual property and NREL’s background intellectual property in order to work towards specific product development goals.

Pursuant to the CRADA, during the years ended August 31, 2012 and 2011, we recorded $161,170 and $125,909, respectively, as research and development expense. From inception (May 5, 1998) to August 31, 2012, the Company recorded $287,079 as research and development expense.

University of South Florida Research Foundation, Inc. License Agreement, Option Agreement and Sponsored Research Agreement

Through New Energy Solar, we are a party to a License Agreement, an Addendum to the License Agreement, an Option Agreement and a Sponsored Research Agreement with the University of South Florida Research Foundation, Inc. These agreements provide for the Company's support of a project relating to the development of the SolarWindow™ Technology and grant it an exclusive worldwide commercial license under certain patents relating to the SolarWindow™ Technology.

F-10

On July 5, 2011, the Company entered into a letter agreement pursuant to which it agreed to reimburse the University of South Florida (“USF”) for filing fees associated with USF’s Provisional Patent and future PCT Applications (the “Applications”) for certain identified technologies (the “Letter Agreement”). Pursuant to the terms of the Letter Agreement, the Company committed to reimburse USF for all documented, out-of-pocket costs directly related to the filing and maintenance of the Applications. In return, USF granted the Company the exclusive right to negotiate a definitive option or license agreement with USF for the technologies underlying the Applications for a period of time after USF files a Provisional Patent for an identified technology (the “Negotiation Period”). Should the Negotiation Period expire without us entering into an agreement with USF, the Company could extend the Negotiation Period for an additional period of time by paying USF a one-time payment of a specified sum. If after this additional time the Company fails to enter into an agreement with USF, USF is free to enter into negotiations and license the underlying technologies to a third-party. The No-Cost Extension to the Sponsored Research Agreement extends SolarWindow™ R&D through December 2012.

During the years ended August 31, 2012 and 2011, and from inception (May 5, 1998) to August 31, 2012, the Company recorded the following as research and development and patent related expense pursuant to these agreements:

	Year Ended August 31,				May 5, 1998 (Inception) to
	2012		2011		August 31, 2012
University of South Florida:
Research and development expense	$	117,683	$	123,762	$	408,553
Patent and PCT application expense		11,788		36,294		49,204
Total	$	129,471	$	160,056	$	457,757

University of Illinois at Urbana-Champaign Sponsored Research Agreement

Through Sungen, the Company was a party to a Sponsored Research Agreement with the University of Illinois at Urbana-Champaign (“UIUC”) that provided for our support of the development of a new technology to integrate films of silicon nanoparticle material on glass substrates. This agreement expired on August 22, 2008. As of such date, the Company advanced a total of $266,709 to UIUC pursuant to the terms of the agreement. Pursuant to the terms of the agreement, the Company was to advance an additional $156,109 to UIUC, which is included in other accrued liabilities at August 31, 2011. The Company has not made the advance as the advance was contingent on the determination as to whether funds previously paid to UIUC under the terms of the agreement had been fully expended. The Company was of the opinion that to the extent these funds were not expended by UIUC, it was not obligated to make any further payments to UIUC. The Company evaluated the status of the aforementioned agreement and related contingent liability to UIUC and determined that the $156,109 liability is no longer valid and has been reclassified to other income.

NOTE 5 - MotionPower™ Technology

Veryst Agreement

Through KEC, the Company was party to certain agreements with Veryst Engineering LLC, a Boston area engineering and consulting firm with experience in product development and energy harvesting; one dated November 4, 2008, two dated September 9, 2009 and one dated July 6, 2010 (collectively, the “Veryst Agreements”), all relating to the development of the Company’s MotionPowerTM technologies. As of August 31, 2012, Veryst Engineering LLC has successfully completed its contracted services associated with the Veryst Agreements.

During the years ended August 31, 2012 and 2011, the Company recorded $2,564 and $48,225, respectively, as research and development expense pursuant to these agreements. From inception (May 5, 1998) to August 31, 2012, the Company recorded $560,880 as research and development expense pursuant to these agreements.

F-11

Sigma Design Agreement

Through KEC, the Company continues to be a party to certain consulting agreements with Sigma Design Company, a Middlesex, New Jersey based engineering and design firm, pursuant to which Sigma Design provides ongoing engineering, product development and testing services primarily relating to the development of the MotionPower™ technology. On January 12, 2012, Sigma Design proposed, and the Company agreed, to have Sigma design, fabricate and perform initial testing of the MotionPower™ technology. The estimated cost to perform this work was $185,000 to $205,000 with a 20%, or $37,000 down payment and monthly billings. During the year ended August 31, 2012, the Company expensed $210,918 related to this work.

Including the January 12, 2012 agreement, during the years ended August 31, 2012 and 2011, the Company recorded $314,205 and $147,423, respectively, as research and development expense pursuant to these agreements. From inception (May 5, 1998) to August 31, 2012, the Company recorded $727,898 as research and development expense pursuant to these agreements. The Company continues to utilize Sigma Design Company on a consulting basis to further test, calibrate, and develop the MotionPower™ technology.

NOTE 6 - Capital Stock

Reverse Stock Split

On March 16, 2011, pursuant to a February 7, 2011, written consent signed by the shareholders owning a majority of the Company’s issued and outstanding shares and a February 24, 2011, unanimous written consent of the Company’s Board, the Company underwent a one-for-three reverse stock split whereby holders of three shares of the Company’s common stock as of March 15, 2011, received one share of its common stock after the reverse stock split, with all fractional shares being rounded up to the nearest whole share.

All share and per share amounts have been retrospectively restated to reflect the one-for-three reverse stock split effected March 16, 2011. FINRA declared the reverse stock split effective as of March 21, 2011.

Common Stock

On February 12, 2008, the Company consummated the sale of an aggregate of 1,225,000 shares of its common stock and Class F Callable Warrants to purchase up to an additional 1,225,000 shares of the Company’s common stock for aggregate gross 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. The Class F Callable Warrants were exercisable for a period of three years from the date of issuance at an initial exercise price of $3.75 per share.

The Company determined that its Class F Callable Warrants contained a dilutive issuance provision. As a result, the Company reclassified 1,062,833 of its Class F Callable Warrants to a long-term warrant liability. The Company’s Class F Callable Warrants were considered derivative financial liabilities and were therefore required to be adjusted to fair value each quarter. During the year ended August 31, 2011, investors exercised 1,054,512 Class F Callable Warrants for aggregate gross proceeds of $3,954,375. all unexercised Class F Callable Warrants expired resulting in the adjustment to their fair value to $0 during the year ended August 31, 2011.

NOTE 7 - Stock Options

On October 10, 2006, the Board adopted and approved the 2006 Incentive Stock Option Plan (the “2006 Stock Plan”) that provides for the grant of stock options to employees, directors, officers and consultants. The 2006 Stock Plan provides for the granting of stock options to purchase a maximum of 5,000,000 shares of the Company’s common stock. Stock options granted to employees under the Company’s 2006 Stock Plan generally vest over two to five years or as otherwise determined by the plan administrator. Stock options to purchase shares of the Company’s common stock expire no later than ten years after the date of grant.

F-12

The per share exercise price for each stock option is determined by the Board and may not be below the underlying stock price on the date of grant as listed on the OTC Markets Group, Inc. QB tier (the “OTCQB”).

The Company measures all stock-based compensation awards using a fair value method on the date of grant and recognizes such expense in its consolidated financial statements over the requisite service period. The grant date fair value of stock options is calculated using the Black-Scholes-Merton formula which requires management to make assumptions regarding option time to expiration, expected volatility, and risk-free interest rates, all of which impact the fair value of the option and, ultimately, the expense that will be recognized over the life of the option.

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a bond with a similar term. The Company does not anticipate declaring dividends in the foreseeable future. Volatility is calculated based on the historical weekly closing stock prices for the same period as the expected life of the option. The Company uses the “simplified” method for determining the expected term of its “plain vanilla” stock options. The Company recognizes compensation expense for only the portion of stock options that are expected to vest. Therefore, the Company applies an estimated forfeiture rate that is derived from historical employee termination data and adjusted for expected future employee turnover rates. If the actual number of forfeitures differs from those estimated by the Company, additional adjustments to compensation expense may be required in future periods.

A summary of the Company’s stock option activity for the years ended August 31, 2012 and 2011, and related information follows:

	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value ($)

Outstanding at August 31, 2010		900,003			1.71
Grants		610,002			5.97
Exercises		(73,334	)		1.61
Forfeitures		(476,666	)		5.59
Outstanding at August 31, 2011		960,005			2.49
Forfeitures		(98,334	)		5.93
Outstanding at August 31, 2012		861,671			2.10		7.41 years	$	0

Exercisable at August 31, 2012		385,666			2.39		6.80 years	$	0

Available for grant at August 31, 2012		4,064,995

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 fiscal 2012 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 August 31, 2012. The intrinsic value of the option changes based upon the fair market value of the Company’s common stock. Since the closing stock price was $1.29 on August 31, 2012 and no outstanding options have an exercise price below $1.32 per share, as of August 31, 2012, there is no intrinsic value to our outstanding stock options.

The following table sets forth the share-based compensation cost resulting from stock option grants, including those previously granted and vesting over time, that were recorded in the Company’s Consolidated Statements of Operations for the years ended August 31, 2012 and 2011, and from May 5, 1998 (inception) to August 31, 2012:

F-13

					Cumulative
	Year Ended				May 5, 1998
	August 31,				(Inception) to
	2012		2011		August 31, 2012
Stock Compensation Expense:
Selling general and administrative expense	$	205,098	$	1,551,079	$	2,130,768

As of August 31, 2012, the Company had $131,347 of unrecognized compensation cost related to unvested stock options which is expected to be recognized over a period of 2.75 years.

Stock Option Activity During the Years Ended August 31, 2012

On December 8, 2011, Mr. Todd Pitcher resigned from the Board. Mr. Pitcher had vested 6,667 stock options and forfeited 10,000 unvested stock options. During the year ended August 31, 2011, the Company recorded stock based compensation of $27,784 for the amortization of the fair value of his stock option. Since the stock option was forfeited prior to 10,000 options vesting, $8,243 previously recognized for stock based compensation was reversed on November 30, 2011, resulting in total stock based compensation expense related to Mr. Pitcher’s stock option grant of $19,541. Mr. Pitcher has until December 8, 2013, to exercise his 6,667 vested stock options.

On August 12, 2012, 83,334 vested options held by Mr. Andrew Farago, the Company's former Chief Operating Officer expired unexercised.

On September 30, 2012, Mr. Javier Jimenez resigned from the Board. As a result of his resignation, Mr. Jimenez forfeited 5,000 unvested stock options and had vested 11,667 stock options. During the years ended August 31, 2012 and 2011, the Company recorded stock based compensation of $66,252 and $25,528, respectively for the amortization of the fair value of his stock option of which $9,117 and $14,588 relate to the forfeited options. Since the stock option was forfeited prior to 5,000 options vesting, $23,705 previously recognized for stock based compensation was reversed on August 31, 2012, resulting in total stock based compensation expense related to Mr. Jimenez's stock option grant of $68,075. Mr. Jimenez has until September 30, 2014, to exercise his 11,667 vested stock options.

Stock Option Activity During the Year Ended August 31, 2011

On April 5, 2011, the Company granted a stock option to purchase up to 10,000 shares of the Company’s common stock at an exercise price of $2.50 per share, the fair market value of the Company’s common stock on the date of grant, to an employee as partial compensation for services. The stock options expire ten years from the date of grant, on April 5, 2021 and vests as follows: (a) 2,000 shares on December 1, 2011, and (b) 2,000 shares on each of April 1 of 2012, 2013, 2014, and 2015. The stock option is further subject to the terms and conditions of a stock option agreement between the Company and the employee. Under the terms of the stock option agreement, the stock option agreement will terminate and there will be no further vesting of stock options effective as of the date that employee ceases to be one of the Company’s employee. Upon termination of such service, the employee will have a specified period of time to exercise vested stock options, if any. The grant date fair value of the stock option granted was $23,536, estimated using the Black-Scholes-Merton formula containing the following assumptions: dividend yield of 0%, volatility of 133.0%, risk-free rate of 2.9%, and a term of 7.67 years. During the years ended August 31, 2012 and 2011, the Company recognized $7,028 and $16,639 of expense related to this issuance.

F-14

On March 21, 2011, the Board appointed Mr. Todd Pitcher and Mr. Peter Fusaro as directors and granted them each a stock option to purchase 16,667 shares of the Company’s common stock at an exercise price of $3.27 per share, the fair market value of the Company’s common stock on the date of grant. The stock options expire ten years from the date of grant, on March 21, 2021 and vests as follows: (a) 6,667 shares on March 21, 2011; (b) 5,000 shares on March 21, 2012; and (c) 5,000 shares on March 21, 2013. The stock options are further subject to the terms and conditions of a stock option agreement between the Company and each of Mr. Pitcher and Mr. Fusaro. Under the terms of the stock option agreement, the stock option agreement will terminate and there will be no further vesting of stock options effective as of the date that either Mr. Pitcher or Mr. Fusaro ceases to be one of the Company’s directors. Upon termination of such service, Mr. Pitcher or Mr. Fusaro will have a specified period of time to exercise vested stock options, if any. The grant date fair value of each of the stock options granted to Mr. Pitcher and Mr. Fusaro was $48,850, estimated using the Black-Scholes-Merton formula containing the following assumptions: dividend yield of 0%, volatility of 133.3%, risk-free rate of 2.0%, and a term of 5.75 years. On December 8, 2011, Mr. Pitcher resigned from the Board. Mr. Pitcher had vested 6,667 stock options and forfeited 10,000 unvested stock options. During the year ended August 31, 2011, the Company recorded stock compensation of $27,784 for the amortization of the fair value of his stock option. Since the stock option was forfeited prior to 10,000 options vesting, $8,243 previously recognized for stock compensation was reversed on November 30, 2011 resulting in total stock compensation expense related to Mr. Pitcher’s stock option grant of $19,541. During the years ended August 31, 2012 and 2011, the Company recognized net expense of $8,243 and $55,568, respectively related to Mr. Pitcher and Mr. Fusaro’s option grants described above.

On January 17, 2011, the Board appointed Mr. Javier Jimenez as a director and granted him a stock option to purchase 16,667 shares of the Company’s common stock at an exercise price of $6.51 per share, the fair market value of the Company’s common stock on the date the stock option agreement was executed by Mr. Jimenez, January 19, 2011. The stock option vested as follows: (a) 6,667 shares on January 19, 2011; (b) 5,000 shares on January 19, 2012; and (c) 5,000 shares on January 19, 2013. The grant date fair value of the stock option granted to Mr. Jimenez was $97,250 estimated using the Black-Scholes-Merton formula containing the following assumptions: dividend yield of 0%, volatility of 133.4%, risk-free rate of 2.0%, and a term of 5.75 years. On September 30, 2012, Mr. Javier Jimenez resigned from the Board. As a result of his resignation, Mr. Jimenez forfeited 5,000 unvested stock options and had vested 11,667 stock options. During the years ended August 31, 2012 and 2011, the Company recorded stock compensation of $66,252 and $25,528, respectively for the amortization of the fair value of his stock option of which $9,117 and $14,588 relate to the forfeited options. Since the stock option was forfeited prior to 5,000 options vesting, $23,705 previously recognized for stock compensation was reversed on August 31, 2012, resulting in total stock compensation expense related to Mr. Jimenez's stock option grant of $68,075. Mr. Jimenez has until September 30, 2014, to exercise his 11,667 vested stock options.

On December 23, 2010, the Board approved, and the Company granted, a stock option to each of the Company’s three non-employee directors to purchase 16,667 shares of its common stock at an exercise price of $5.94 per share, the fair market value of the Company’s common stock on the date of grant. Each stock option expires ten years from the date the applicable stock option agreement was executed, on January 17, 2021, and vests as follows: (a) 6,667 shares on January 17, 2011; (b) 5,000 shares on January 17, 2012; and (c) 5,000 shares on January 17, 2013. The stock options are further subject to the terms and conditions of a stock option agreement between the Company and each director. Under the terms of the stock option agreement, the stock option agreement will terminate and there will be no further vesting of stock options effective as of the date that the director ceases to be one of the Company’s directors. Upon termination of such service, the director will have a specified period of time to exercise vested stock options, if any. The grant date fair value of each of the stock options granted to each of the Company’s three non-employee directors was $89,228 ($267,683 total) estimated using the Black-Scholes-Merton formula containing the following assumptions: dividend yield of 0%, volatility of 134.4%, risk-free rate of 2.8%, and a term of 5.75 years. During the years ended August 31, 2012 and 2011, the Company recognized $66,921 and $187,378 of expense related to these issuances.

On December 17, 2010, the Board approved, and the Company granted, Mr. Andrew Farago, the Company's former Chief Operating Officer, a stock option to purchase 500,000 shares of the Company’s common stock at an exercise price of $6.21 per share, the fair market value of the Company’s common stock on the date of grant. The grant date fair value of the stock option granted to Mr. Farago was $2,878,274 estimated using the Black-Scholes-Merton formula containing the following assumptions: dividend yield of 0%, volatility of 134.4%, risk-free rate of 2.7%, and a term of 6.8 years. The stock option expired ten years from the date of grant and vested in certain blocks based on Mr. Farago achieving certain milestones. Effective as of August 12, 2011, Mr. Andrew Farago resigned as the Chief Operating Officer. On the date of his resignation Mr. Farago had vested 83,334 as a result of the Company appointing two new directors to its Board, who were recommended by Mr. Farago. During the year ended August 31, 2011, the Company recognized $479,712 as stock based compensation expense related to Mr. Farago’s 83,334 vested options which expired unexercised on August 12, 2012.

F-15

Stock Option activity During the Year Ended August 31, 2010

On December 15, 2009, the Board approved, and the Company granted, a stock option to each of three of its non-employee directors permitting each to purchase, subject to applicable vesting provisions, 16,667 shares of the Company’s common stock at an exercise price of $1.32 per share, the fair market value of the Company’s common stock on the date of grant. Each stock option expires five years from the date of grant, on December 15, 2014 and vests as follows: (a) as to 6,667 shares on December 16, 2009; (b) as to 5,000 shares on December 16, 2010; and (c) as to 5,000 shares on December 16, 2011. The stock options are further subject to the terms and conditions of a stock option agreement between each director and the Company. Under the terms of the stock option agreement, the stock option agreement will terminate and there will be no further vesting of stock options effective as of the date that the director ceases to be a director of the Company. Upon termination of such service, the director will have a specified period of time to exercise vested stock options, if any. The grant date fair value of each 16,667 stock option was estimated at $1.05 each, for a total of $17,500, using the Black-Scholes-Merton formula with the following weighted average assumptions: 0% dividend yield, expected volatility of 140.41%, risk-free interest rate of 1.38%, and expected life of 3.25 years. During the years ended August 31, 2012 and 2011, the Company recorded stock compensation of $2,297 and $12,469, respectively for the amortization of the fair value of these stock options.

On August 9, 2010 and pursuant to Mr. Conklin’s Employment Agreement, the Board granted a stock option to purchase up to 666,666 shares of the Company’s common stock, subject to certain vesting requirements, at an exercise price of $1.65 per share. The stock option expires ten years from the date of grant, on August 9, 2020. Subject to the restrictions and earlier termination provisions set forth in the stock option agreement, the option vests as follows:

1. as to 166,667 shares or such portion thereof as may be determined by the Board at its sole discretion, when one or more of the following items related to the development, production, manufacturing, and sale of any commercially viable product have been successfully executed: (a) completion of final design and/or engineering; (b) the establishment of manufacturing facilities, whether in-house or outsourced; and (c) the initial filing of any product safety approval applications, if required, in order to allow for the commercial sale of products by the Company;

2. as to 166,667 shares upon commencing commercial sales of any of the Company’s products, as reported in the Company's financial statements, whether to retail customers or wholesale customers;

3. 33,333 shares for each calendar year of service in an Executive Position for the next five years (166,667 shares in the aggregate), which shall become exercisable as to 33,333 shares on August 9, 2011 and 33,333 shares on each anniversary thereof through August 9, 2015.

4. as to 166,667 shares when, to the Board’s satisfaction, the Company enters into a favorable business partnership with a third-party commercial organization in the industry segment related to the Company’s product development and sales efforts, under any of the following conditions:

(a) a product development relationship whereby the third-party partner makes a significant financial investment, as determined at the Board’s discretion, directed towards the development of the Company’s products; or

(b) a product development relationship whereby the third-party partner invests significant research and development resources, as determined at the Board’s discretion, directed towards the development of the Company’s products; or

(c) a strategic partnership with the third-party partner where, as determined at the Board’s discretion, such a partnership provides significant business advantages to the Company which it would otherwise not have, whether related to product development, commercial sales, industry position, or business reputation.

The fair market value of the Company’s common stock on the date of grant was $1.62 per share. The grant date fair value of the 666,666 stock options was estimated at $1.50 each, for a total of $1,008,814, using the Black-Scholes-Merton formula with the following assumptions: dividend yield of 0%, expected volatility of 134.81%, risk-free interest rate of 2.21%, and expected life of 7.2 years. During the years ended August 31, 2012 and 2011, the Company recorded stock compensation of $105,190 and $722,909, respectively for the amortization of the fair value of this stock option. Through August 31, 2012, the Company has recognized $906,707 of expense related to Mr. Conklin's option.

F-16

The following table summarizes information about stock options outstanding and exercisable at August 31, 2012:

		Stock Options Outstanding						Stock Options Exercisable
				Weighted		Weighted				Weighted Average		Weighted
Range of		Number of		Average		Average		Number		Remaining		Average
Exercise		Options		Contractual		Exercise		of Options		Contractual		Exercise
Prices		Outstanding		Life (years)		Price		Exercisable		Life (Years)		Price

$	1.32		50,001		2.29	$	1.32		50,001		2.29	$	1.32
$	1.65		666,667		7.95	$	1.65		233,333		7.95	$	1.65
$	2.50		10,000		8.60	$	2.50		4,000		8.60	$	2.50
$	2.55		33,334		6.03	$	2.55		19,998		6.03	$	2.55
$	3.27		23,334		6.48	$	3.27		18,334		5.91	$	3.27
$	4.98		16,667		5.53	$	4.98		13,332		5.53	$	4.98
$	5.94		50,001		8.32	$	5.94		35,001		8.32	$	5.94
$	6.51		11,667		2.08	$	6.51		11,667		2.08	$	6.51

Total			861,671		7.41	$	2.10		385,666		6.80	$	2.39

In addition to stock compensation recorded for the stock option grants and forfeitures discussed above, the Company recorded stock compensation for stock options previously granted and vesting over time of $11,013 and $19,762 during the years ended August 31, 2012 and 2011, respectively.

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.

NOTE 8 - Net Loss Per Share

During the years ended August 31, 2012 and 2011, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects of warrants, stock options and convertible debt on net loss per share for the past two fiscal years because to do so would be antidilutive. Excluded from the computation of diluted net loss per share for the year ended August 31, 2012, are stock options to acquire 861,671 shares of common stock with a weighted-average exercise price of $2.10 per share, warrants to acquire 625,000 shares of common stock with a weighted-average exercise price of $1.92 per share and convertible debt convertible into 625,000 shares of common stock upon conversion at a conversion price of $1.60 per share. Excluded from the computation of diluted net loss per share for the year ended August 31, 2011 are stock options to acquire 960,005 shares of common stock with a weighted-average exercise price of $2.49 per share.

Following is the computation of basic and diluted net loss per share for the years ended August 31, 2012 and 2011:

	Year Ended
	August 31,
	2012			2011
Basic and Diluted EPS Computation
Numerator:
Loss available to common stockholders'	$	(2,433,431	)	$	(3,619,750	)

Denominator:
Weighted average number of common shares outstanding		20,638,360			20,396,362

Basic and diluted EPS	$	(0.12	)	$	(0.18	)

F-17

NOTE 9 - Related Party Transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

For services rendered in the capacity of a Board member, non-employee Board members received $2,500 through our first fiscal quarter ended November 30, 2010, and $3,750 per quarter thereafter. New Board member compensation is pro rated in their first quarter. During the years ended August 31, 2012 and 2011, the Company incurred $91,200 and $64,013, respectively in cash based Board compensation. Additionally, the Company recognized stock based compensation expense related to stock options granted for services rendered by non-employee directors of the Company (See “Note 7 - Stock Options” above) during the years ended August 31, 2012 and 2011 of $90,297 and $341,429, respectively.

March 21, 2011, Todd Pitcher was elected to the Board and received $3,750 per quarter for his Board related services. On May 19, 2011, the Company entered into an Advisory Engagement Agreement (the “Agreement”) with Aspire Clean Tech Communications, Inc., a private corporation wholly owned by Mr. Pitcher. Pursuant to the Agreement Mr. Pitcher provided ongoing corporate advisory and support services - until the parties agree otherwise in writing - in exchange for compensation of $3,500 per month plus reimbursement of business related, out-of-pocket expenses. On July 1, 2011, the Agreement was amended to increase the monthly compensation from $3,500 to $10,000 due to the increased level of time required for Mr. Pitcher to execute his duties. On September 30, 2011, the Agreement was further amended to include the addition of a $1,000 per month health insurance reimbursement retroactively applied to include the month of July 2011. On December 8, 2011, Mr. Pitcher resigned from the Board and ceased performing services for the Company. The Company paid Mr. Pitcher $30,000 upon receipt of an executed Mutual Termination and Release.

On February 2, 2011, the Company entered into an employment agreement with Mr. Scott Taper pursuant to which Mr. Taper was appointed the Company’s Vice President of Business Development. Pursuant to the terms of the employment agreement, Mr. Taper was entitled to an annual salary of $90,000, which would increase to $100,800 if certain milestone were met, and a stipend of $1,000 per month to cover medical insurance premiums until such time as the Company could provide an alternative medical insurance plan. The employment agreement provided that Mr. Taper’s employment by the Company was “at-will employment” and may be terminated by Mr. Taper or the Company at any time, with or without cause, and for any reason whatsoever, upon written notice to the other. On February 28, 2011, Mr. Taper, resigned as the Company’s Vice President of Business Development.

On February 1, 2011, the Company entered into a consultancy agreement with Mr. Elliot Maza pursuant to which Mr. Maza was appointed the Company’s Chief Financial Officer. Pursuant to the terms of the consultancy agreement, Mr. Maza was entitled to a monthly fee of $7,500. The consultancy agreement provides that Mr. Maza’s engagement was on a part-time basis and “at-will” and may be terminated by Mr. Maza or the Company at any time, with or without cause, and for any reason whatsoever upon written notice to the other. On August 31, 2011, Mr. Maza, resigned as the Company’s CFO.

On December 17, 2010, the Company entered into an employment agreement with Mr. Farago pursuant to which Mr. Farago was appointed the Company’s Chief Operating Officer. Pursuant to the employment agreement, Mr. Farago was entitled to an annual salary of $150,000, to increase to $250,000 if the Company consummates either an equity or debt financing or series of financings with net proceeds of at least $7,000,000 and a stipend of $1,000 per month to cover medical insurance premiums until such time as the Company could provide an alternative medical insurance plan. The employment agreement provides that Mr. Farago’s employment by the Company was “at-will employment” and may be terminated by Mr. Farago or the Company at any time, with or without cause, and for any reason whatsoever upon written notice to the other. Also on December 17, 2010, the Board approved, and the Company granted, Mr. Farago a stock option to purchase 500,000 shares of the Company’s common stock at an exercise price of $6.21 per share, the fair market value of the Company’s common stock on the date of grant. The stock option expired ten years from the date of grant and was subject to various vesting terms. Effective as of August 12, 2011, Mr. Andrew Farago resigned as the Chief Operating Officer. On the date of his resignation Mr. Farago had vested 83,334 options which which expired unexercised on August 12, 2012.

F-18

The law firm of Sierchio & Company, LLP, of which Joseph Sierchio, one of the Company's directors, is a principal, has provided counsel to the Company since its inception. In July 2008, the Company asked Mr. Sierchio to join the Company's Board. During the years ended August 31, 2012 and 2011, the law firm of Sierchio & Company, LLP provided $176,404 and $198,142, respectively, of legal services. At August 31, 2012, the Company owed Sierchio & Company LLP $22,198 which is included in accounts payable.

All related party transactions are recorded at the exchange amount established and agreed to between related parties and are in the normal course of business.

NOTE 10 - Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at August 31, 2012 and 2011 are as follows:

	2,012			2,011
Deferred tax assets:
Net operating loss carryforwards	$	2,506,712		$	1,838,010
Capitalized research and development		756,562			554,707
Depreciation		(6,788	)		-
Stock based compensation		659,793			654,728
Accrued research and development fees		-			53,077
Research and development credit carry forward		174,558			120,982
Total deferred tax assets		4,090,837			3,221,504
Less: valuation allowance		(4,090,837	)		(3,221,504	)
Net deferred tax asset	$	-		$	-

The net increase in the valuation allowance for deferred tax assets was $869,333 and $1,267,271 for the years ended August 31, 2012 and 2011, respectively. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2012 available to offset future federal taxable income, if any, of $7,372,681, which will fully expire by the fiscal year ended August 31, 2032. Accordingly, there is no current tax expense for the years ended August 31, 2012 and 2011. In addition, the Company has research and development tax credit carry forwards of $174,558 at August 31, 2012, which are available to offset federal income taxes and begin to expire during the year ended August 31, 2026.

The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The effects of state income taxes were insignificant for the years ended August 31, 2012 and 2011.

F-19

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the years ended August 31, 2012 and 2011:

	2012			2011

Income tax benefit at statutory rate	$	827,367		$	1,230,715
Non-deductible meals and entertainment		(1,280	)		(1,987	)
Change in fair value of warrant liability		-			2,740
Research and development credit		53,576			35,803
Other		(10,330	)		-
Change in valuation allowance		(869,333	)		(1,267,271	)
	$	-		$	-

The fiscal years 2009 through 2012 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

NOTE 11 - Subsequent Events

On September 30, 2012, Mr. Javier Jimenez resigned as a director of the Company.

F-20

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Our estimated expenses in connection with the issuance and distribution of the securities being registered are:

SEC filing fee	$	500
Accounting fees and expenses	$	5,000
Legal fees and expenses	$	15,000
Miscellaneous	$	4,500
Total	$	25,000

ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 78.7502(1) of the Nevada Revised Statutes (“NRS”) authorizes a Nevada corporation to indemnify any director, officer, employee, or corporate agent “who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation” due to his or her corporate role. Section 78.7502(1) extends this protection “against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.”

Section 78.7502(2) of the NRS also authorizes indemnification of the reasonable defense or settlement expenses of a corporate director, officer, employee or agent who is sued, or is threatened with a suit, by or in the right of the corporation. The party must have been acting in good faith and with the reasonable belief that his or her actions were in or not opposed to the corporation's best interests. Unless the court rules that the party is reasonably entitled to indemnification, the party seeking indemnification must not have been found liable to the corporation.

To the extent that a corporate director, officer, employee, or agent is successful on the merits or otherwise in defending any action or proceeding referred to in Section 78.7502(1) or 78.7502(2), Section 78.7502(3) of the NRS requires that he be indemnified “against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.”

Unless ordered by a court or advanced pursuant to Section 78.751(2), Section 78.751(1) of the NRS limits indemnification under Section 78.7502 to situations in which either (1) the stockholders, (2) the majority of a disinterested quorum of directors, or (3) independent legal counsel determine that indemnification is proper under the circumstances.

Section 78.751(2) authorizes a corporation’s articles of incorporation, bylaws or agreement to provide that directors’ and officers’ expenses incurred in defending a civil or criminal action must be paid by the corporation as incurred, rather than upon final disposition of the action, upon receipt by the director or officer to repay the amount if a court ultimately determines that he is not entitled to indemnification.

Section 78.751(3)(a) provides that the rights to indemnification and advancement of expenses shall not be deemed exclusive of any other rights under any bylaw, agreement, stockholder vote or vote of disinterested directors. Section 78.751(3)(b) extends the rights to indemnification and advancement of expenses to former directors, officers, employees and agents, as well as their heirs, executors, and administrators.

Regardless of whether a director, officer, employee or agent has the right to indemnity, Section 78.752 allows the corporation to purchase and maintain insurance on his behalf against liability resulting from his or her corporate role.

Our Bylaws also contain broad indemnification provisions. We have entered into indemnification agreements with each of our directors.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors or officers pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities Exchange Commission, this indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.

There is no pending litigation or proceeding involving any of our directors, officers, employees, or other agents as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director, officer, employee, or other agent.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

On April 6, 2010, the Company entered into an amendment to the Employment Agreement dated June 24, 2009 with Mr. Patel (the “Amended Employment Agreement”), pursuant to which Mr. Patel agreed to continue to serve as the Company’s President and CEO, until March 31, 2011 (the “Employee Employment Commitment”). In consideration of the Employee Employment Commitment, Mr. Patel was granted a stock option to purchase up to 50,000 shares of the Company’s common stock at an exercise price of $1.74 per share. Subject to the terms, restrictions and earlier termination provisions as set forth in the option agreement dated April 6, 2010, between the Company and Mr. Patel, the option vested as follows: 12,500 on June 30, 2010; 12,500 on September 30, 2010; 12,500 on December 31, 2010; and 12,500 on March 31, 2011.

On August 9, 2010, Mr. Patel resigned from all executive positions held with us and as one of our directors. As of the date of Mr. Patel’s resignation, 12,500 of his 50,000 stock options had vested. Pursuant to the stock option agreement, the vesting of this stock option was accelerated when we mutually terminated the Amended Employment Agreement between us and Mr. Patel and Mr. Patel had the right at any time within the then remaining exercise period of such vested stock options to exercise the 50,000 stock options granted to him on April 6, 2010. On November 1, 2010, Mr. Patel exercised all 50,000 of these stock options via the cashless exercise option set forth in the option agreement and we issued 26,984 shares of our common stock in full settlement of this stock option exercise.

The issuance of the common stock pursuant to the above transaction is exempt from registration pursuant to Section 4(2) of the Securities Act, and the stock certificate contained an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or an exemption therefrom.

Exhibit No.		Description of Exhibit

3.1		Articles of Incorporation, as amended (1)

3.2		Certificate of Amendment to the Articles of Incorporation changing name to New Energy Technologies, Inc. (1)

3.3		Certificate of Amendment to the Articles of Incorporation increasing the authorized shares from 100,000,000 to 300,000,000 (2)

3.4		Certificate of Change to the Articles of Incorporation relating to the one-for-threereverse stock split (2)

3.5		Bylaws (1)

4.1		Securities Purchase Agreement dated February 8, 2008 (1)

4.2		Form of Series G Warrant (11)

4.3		Form of Series H Warrant (14)

4.4		Subscription Agreement (14)

5.1		Opinion of Sierchio & Company, LLP regarding the legality of the securities being registered (12)

10.1		Employment Termination Agreement with Mr. Cucinelli (1)

10.2		Employment Agreement dated June 24, 2009 between New Energy Technologies, Inc. and Meetesh Patel (1)

10.3		Amendment to the Employment Agreement dated June 24, 2010, dated April 6, 2010, between New Energy Technologies, Inc. and Meetesh Patel (1)

10.4		Stock Option Agreement Dated April 6, 2010, between New Energy Technologies, Inc. and Meetesh Patel (1)

10.5		Resignation and Mutual Determination to Terminate Employment between New Energy Technologies, Inc. and James B. Wilkinson, dated February 15, 2010 (1)

10.6		Amended Form of Stock Option Agreement dated as of December 15, 2009, between Meetesh Patel and New Energy Technologies, Inc., correcting the grant date (1)

10.7		Amended Form of Stock Option Agreement dated as of December 15, 2009, between New Energy Technologies, Inc. and its non-employee directors, correcting the grant date (1)

10.8		Employment Agreement dated August 9, 2010, between New Energy Technologies, Inc. and John A. Conklin (3)

10.9		Stock Option Agreement dated August 9, 2010, between New Energy Technologies, Inc. and John A. Conklin (3)

10.1		Employment Agreement dated December 17, 2010, between New Energy Technologies, Inc. and Andrew Farago (4)

10.11		Stock Option Agreement dated December 17, 2010, between New Energy Technologies, Inc. and Andrew Farago (4)

10.12		Stock Option Agreement dated January 17, 2011, between New Energy Technologies, Inc. and Jatinder Bhogal (5)

10.13		Stock Option Agreement dated January 17, 2011, between New Energy Technologies, Inc. and Alistair Livesey (5)

10.14		Stock Option Agreement dated January 17, 2011, between New Energy Technologies, Inc. and Joseph Sierchio (5)

10.15		Stock Option Agreement dated January 19, 2011, between New Energy Technologies, Inc. and Javier Jimenez (5)

10.16		Consultancy Agreement dated February 1, 2011, between New Energy Technologies, Inc. and Elliot Maza (6)

10.17		Employment Agreement dated February 2, 2011, between New Energy Technologies, Inc. and Scott Taper (7)

10.18		Redacted USF Sponsored Research Agreement (1) (8)

10.19		Redacted USF Option Agreement (1) (8)

10.2		Redacted Veryst Agreement (1) (8)

10.21		Redacted Sigma Design Agreement (1) (8)

10.22		Redacted Standard Exclusive License Agreement with Sublicensing Terms entered into on June 21, 2010, by and between the University of South Florida Research Foundation, Inc. and New Energy Solar Corporation (6) (8)

10.23		Redacted Addendum 1 dated November 30, 2010, to the License Agreement by and between the University of South Florida Research Foundation, Inc. and New Energy Solar Corporation (8) (9)

10.24		Bridge Loan Agreement dated April 17, 2012 (11)

23.1		Consent of Sierchio & Company, LLP (included in Exhibit 5.1 hereto) (12)

23.2		Consent of Peterson Sullivan LLP (14)

24.1		Power of Attorney (13)

99.1

2006 Incentive Stock Option Plan (10)

____________________________________________________________

(1) Incorporated by reference to the exhibits filed as part of the report on Form 10-Q filed by New Energy Technologies, Inc. on April 16, 2010.

(2) Incorporated by reference to the Form 8-K filed by New Energy Technologies, Inc. on March 21, 2011.

(3) Incorporated by reference to the Form 10-K filed by New Energy Technologies, Inc. on December 13, 2010.

(4) Incorporated by reference to the Form 8-K filed by New Energy Technologies, Inc. on December 23, 2010.

(5) Incorporated by reference to the Form 8-K/A filed by New Energy Technologies, Inc. on January 21, 2011.

(6) Incorporated by reference to the Form 8-K dated February 1, 2011, filed by New Energy Technologies, Inc. on February 4, 2011.

(7) Incorporated by reference to the Form 8-K filed by New Energy Technologies, Inc. on February 8, 2011.

(8)Confidential treatment has been granted with respect to certain portions of this exhibit.

(9) Incorporated by reference to the Form 8-K dated November 30, 2010, filed by New Energy Technologies, Inc. on February 4, 2011.

(10) Incorporated by reference to the Form S-8 filed by New Energy Technologies, Inc. on March 15, 2011.

(11) Incorporated by reference to the Form 8-K filed by New Energy Technologies, Inc. on April 23, 2012.

(12) Filed herewith.

(13) Incorporated by reference to the Form S-1 filed by New Energy Technologies, Inc. on June 21, 2012.

(14) Incorporated by reference to Post-Effective Amendment #1 to the Form S-1 filed by New Energy Technologies, Inc. on December 7, 2012.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any Prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Columbia, State of Maryland, on January 9, 2013.

New Energy Technologies, Inc.

By:	/s/ John A Conklin
Name:	John A. Conklin
Title:	President and Chief Executive Officer, Chief Financial Officer (Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

By:	/s/ John A Conklin	Dated: January 9, 2013
Name:	John A. Conklin
Title:	President and Chief Executive Officer, Chief Financial Officer (Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)

By:	*	Dated: January 9, 2013
Name:	Alastair Livesey
Title:	Director

By:	*	Dated: January 9, 2013
Name:	Jatinder S. Bhogal
Title:	Director

By:	*	Dated: January 9, 2013
Name:	Joseph Sierchio
Title:	Director

*By:	/s/ John Conklin
	John Conklin
	Attorney-In-Fact

Nevada	3674	59-3509694
(State or other jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code number)	Identification No.)

New Energy Technologies, Inc. 9192 Red Branch Road, Suite 110 Columbia, Maryland 21045 (800) 213-0689		John A. Conklin 9192 Red Branch Road, Suite 110 Columbia, Maryland 21045 (800) 213-0689
(Address and telephone number of principal executive offices)		(Name, address and telephone number of agent for service)

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if a smaller reporting company)

Title of each class of securities to be registered	Amount to be registered (1)		Proposed maximum offering price per share		Proposed maximum aggregate offering price (2)		Amount of registration fee
Units, consisting of one share of common stock, $0.001 par value and one-half Series H Stock Purchase Warrant		1,875,000	$	0.64	$	1,200,000
Common stock, $0.001 par value (3)		1,875,000					$	164
Series H Stock Purchase Warrants to purchase common stock included in the Units (3) (4)		937,500
Common stock, $0.001 par value (5)		937,500	$	0.83	$	778,125	$	106
Total		2,812,500			$	1,978,125	$	270	(6)

Securities Being Registered:	Up to 1,875,000 Units. Each Unit consists of one (1) share of our common stock, $0.001 par value per share and one-half (1/2) Series H Warrant. Each full Series H Warrant entitles the holder to purchase one additional share of our common at a purchase price of $0.83 for a period of 3 years from the date of issuance; no fractional shares will be sold.
Offering Price Per Unit:	$0.64 per Unit ($1,200,000 in the aggregate).
Shares Outstanding Prior to Completion of the Offering:	20,638,360
Authorized Capital Stock:	Our authorized capital stock consists of stock of 300,000,000 shares of common stock, each with a par value of $0.001, and 1,000,000 shares of preferred stock, each with a par value of $0.10. No preferred shares were issued and outstanding. See “Description of Our Securities.”
Shares Outstanding upon Closing of the Offering:	If all of the Units offered are sold, upon closing, we will have 22,513,360 shares outstanding, without giving effect to the exercise of any outstanding options or warrants.
OTCQB Symbol:	NENE
Transfer Agent:	Corporate Stock Transfer, 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.
Risk Factors:	Our business operations are subject to numerous risks, including the risk of delays in or discontinuation of our research and development due to lack of financing, inability to obtain necessary regulatory approvals to market the products, unforeseen safety issues relating to the products and dependence on third party collaborators to conduct research and development of the products. Because we are an early stage company with a limited history of operations, we are also subject to many risks associated with early-stage companies. For a more detailed discussion of some of the risks you should consider, you are urged to carefully review and consider the section entitled “Risk Factors” of this prospectus.
Use of Proceeds:	Proceeds received pursuant to this offering will be used to fund the development of our SolarWindow™ Technology; and MotionPower™ Technology, and for working capital and general corporate purposes. See “Use of Proceeds.”
Duration of Offering:	Subject to our right to terminate the offering at any time, the Offering will be conducted by us on a best efforts basis for a period of the earlier of 180 days following the effectiveness of this registration statement, or the date on which we have sold all of the Units. We may, in our sole discretion and without notice, extend the offering for up to an additional 90 days.

	Page #
Prospectus Summary		3
The Offering		6
Risk Factors		8
Note Regarding Forward-Looking Statements		17
Use of Proceeds		18
Determination of Offering Price		19
Market Price and Related Stockholder Matters		19
Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Description of Our Business and Property		28
Directors, Executive Officers and Control Persons		41
Executive Compensation		46
Security Ownership of Certain Beneficial Owners and Management		50
Transactions With Related Persons, Promoters and Certain Control Persons		51
Description of Our Securities		52
Plan Of Distribution		54
Legal Matters		56
Experts		56
Where you Can Find Additional Information		56
Index To Consolidated Financial Statements		57
Consolidated Financial Statements		F-1

Statements of Operations Data	For the Year Ended August 31, 2012			For the Year Ended August 31, 2011
Revenue	$	0		$	0
Loss from operations	$	(2,320,529	)	$	(3,624,930	)
Net loss	$	(2,433,431	)	$	(3,619,750	)
Basic and diluted net loss per share	$	(0.11	)	$	(0.18	)
Weighted average shares outstanding used in basic and diluted net loss per share calculation		20,638,360			20,396,362

Balance Sheet Data	For the Year Ended August 31, 2012		For the Year Ended August 31, 2011
Cash and cash equivalents	$	1,046,918	$	2,320,185
Working capital	$	1,017,597	$	2,264,969
Total assets	$	1,127,712	$	2,546,773
Total liabilities	$	90,149	$	280,877
Total stockholders’ equity	$	1,037,563	$	2,265,896

Fiscal Year Ended August 31, 2012	High		Low
First Quarter (September 1 - November 30, 2011)	$	2.30	$	1.41
Second Quarter (December 1, 2009 - February 29, 2012)	$	2.39	$	1.08
Third Quarter (March 1 – May 31, 2012)	$	4.42	$	1.81
Fourth Quarter (June 1 – August 31, 2012)	$	2.03	$	1.25

Fiscal Year Ended August 31, 2011
First Quarter (September 1 - November 30, 2010)	$	5.13	$	1.59
Second Quarter (December 1, 2009 - February 28, 2011)	$	6.72	$	4.50
Third Quarter (March 1 – May 31, 2011)	$	4.11	$	1.55
Fourth Quarter (June 1 – August 31, 2011)	$	2.40	$	1.25

	Year Ended August 31,				May 5, 1998 (Inception) To
	2012		2011		August 31, 2012
University of South Florida:
Research and development expense	$	117,683	$	113,762	$	408,553
Patent and PCT application expense		36,294		11,788		49,204
Total	$	153,977	$	125,550	$	457,757

	Year Ended
	August 31,						Increase/				Percentage
	2012			2011			(Decrease)				Change
Operating expense
Selling, general and administrative		$	1,442,988		$	1,622,479		$	(179,491	)		-11	%
Stock compensation			205,098			1,551,079			(1,345,981	)		-87	%
Research and development			672,443			451,372			221,071			49	%
Total operating expense		$	2,320,529		$	3,624,930		$	(1,304,401	)		-36

		Year Ended				May 5, 1998
	Development	August 31,				(Inception) to
	Activity	2012		2011		August 31, 2012
University of Illinois	Solar WindowTM	$	-	$	-	$	422,818
Alliance for Sustainable Energy, LLC	Solar WindowTM		161,170		125,909		287,079
University of South Florida	Solar WindowTM		117,683		123,762		408,553
Sigma Design Company, LLC	Motion PowerTM		314,205		147,423		727,898
Veryst Engineering LLC	Motion PowerTM		2,564		48,225		560,880
Other			76,821		6,054		182,911
Total		$	672,443	$	451,372	$	2,590,139

Name	Age	Current Position With Us	Director or Officer Since
John A. Conklin	52	President and Chief Executive Officer, Chief Financial Officer and Director	August 9, 2010(1)
Alastair Livesey	54	Director	September 19, 2007
Joseph Sierchio	63	Director	July 24, 2008
Jatinder S. Bhogal	45	Director	September 9, 2008
Peter Fusaro	61	Director	March 21, 2011

	Director Compensation
	Fees Earned or		Stock
Name	Paid in Cash ($)		Awards ($) (1)		Total ($)
Year Ended August 31, 2012
Alastair Livesey	$	17,100	$	-	$	17,100
Jatinder Bhogal		17,100		-		17,100
Joseph Sierchio		17,100		-		17,100
Javier Jimenez		15,300		-		15,300
Peter Fusaro		17,100		-		17,100
Todd Pitcher		7,500		-		7,500
Total 2012 director compensation	$	91,200	$	-	$	91,200

Year Ended August 31, 2011
Alastair Livesey (2)	$	13,750	$	89,228	$	102,978
Jatinder Bhogal (2)		13,750		89,228		102,978
Joseph Sierchio (2)		13,750		89,228		102,978
Javier Jimenez (3)		13,125		97,250		110,375
Peter Fusaro (4)		6,694		48,850		55,544
Todd Pitcher (5)		6,694		48,850		55,544
Total 2011 director compensation	$	67,763	$	462,634	$	530,397

Name and Principal Position	Year Ended August 31,	Salary ($)		Bonus ($)		Option Awards ($) (6)		All Other Compensation($)(7)		Total ($)
John A. Conklin (1)	2012	$	181,250	$	45,000		-	$	19,982	$	246,232
President, CEO, CFO	2011	$	166,661	$	25,000		-	$	14,996	$	206,657
and Director	2010	$	55,875		-	$	1,128,789	$	742	$	1,185,406

Todd Pitcher (2)	2012	$	67,500		-		-	$	3,000	$	70,500
Former President of Nakoda	2011	$	29,581		-	$	48,850	$	2,000	$	80,431
Energy, Inc.	2010		-		-		-		-		-

Meetesh V. Patel (3)	2012		-		-		-		-		-
Former President, CEO, CFO	2011		-		-		-		-		-
and Former Director	2010	$	166,767		-	$	154,903	$	14,400	$	336,070

Elliot Maza (4)	2012		-		-		-		-		-
Former CFO	2011	$	52,500		-		-		-	$	52,500
	2010		-		-		-		-		-

Andrew Farago (5)	2012		-		-		-		-		-
Former COO	2011	$	125,000		-	$	479,712	$	8,000	$	612,712
	2010		-		-		-		-		-