The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements included in our Form 10-K Annual Report for the year ended November 30, 2008, and notes thereto.

Overview

We are a medical research and development company that is specializing in pharmaceutical, bio-technical and medical gas generating systems. The primary gas our systems will generate is nitric oxide, along with other various combinations of beneficial medical gases suitable for the treatment of human diseases.

Nitric oxide gas is produced and sold commercially by major gas companies as a specialty gas mixture and calibration gas. Nitrogen dioxide is present in all nitric oxide gas currently produced; that limits the size of the dose

of nitric oxide gas that can be administered to humans and animals.

We have developed a proprietary compound formulation that will be utilized to produce nitric oxide gas in our desktop and portable generators. Management believes that with further formulation of our proprietary compound, we can make or filter nitric oxide gas with less toxic amounts of nitrogen dioxide, and that this process can produce nitric oxide gas in ample quantities for any current or prospective use, and at a substantially reduced price compared with all other currently available technologies.

Our current generator model is capable of delivering sufficient quantities of nitric oxide gas for individual laboratory desktop use. We will continue to further develop this and other generators and compound formulation for high production quantities and consistency. The product must have a known shelf life and be available in various configurations to produce known concentrations and known volumes of gas. Packaging is another developmental process that will need to be addressed. Management plans to rely on outside contractors to achieve these objectives.

We estimate that non-clinical laboratory sales could take place prior to the receipt of United States Food and Drug Administration ("FDA") approval.
Management anticipates that selling our generator into the market as laboratory equipment prior to receipt of final FDA approval will pave the way for sales of our medical generator and proprietary tablets, but expected financial contributions from non-medical generator and tablet sales will be too late to help offset the substantial costs of the FDA approval process for human medical uses. We expect that contributions will be able to support our manufacturing and set-up costs and contribute to the overall profitability of our Company in due time, but we believe that they will also require financing. We anticipate entering the non-clinical laboratory market in the next 18 months.

All human medical uses of nitric oxide gas require FDA approval, and the approval of similar international agencies. Approval can be a long and expensive process, with no assurance that any such approval will ever be granted. Management hopes to reduce time to regulatory approval by certain strategic approaches that are proprietary.

Our objectives are to establish GeNOsys (generated nitric oxide systems) as the premier nitric oxide generating pharmaceutical company, and to manufacture and sell medical grade nitric oxide generators and tablets for use in the relief of human diseases, offer value added services such as custom generators adapted for the treatment of various diseases, hire staff both currently identified and unidentified to implement our business model, and to gain FDA approval of our generating system.

Results of Operations

The following table presents our results of operations for the three and six months ended May 31, 2009 and 2008:

                                For the Three Months           For the Six Months
                                    Ended May 31,                 Ended May 31,
                                 2009           2008           2009           2008

Revenues                  $            - $            - $            - $            -

Cost of sales                          -              -              -              -

Gross margin                           -              -              -              -

Operating expenses:
  Research and                   106,199        118,245        205,857        253,827
development
  General and                    131,436         86,265        452,493        198,879
administrative
  Stock based                     65,464         94,115        127,424        187,500
compensation charges

    Total operating              303,099        298,625        785,774        640,206
expenses

Net income (loss) from         (303,099)      (298,625)      (785,774)      (640,206)
operations

Other income (expense):
  Interest income                      -            375              -          2,332
  Gain (loss) on disposal              -              -              -              -
of asset
  Interest expense               (2,032)                       (3,868)
  Other income (expense)               -              -              -              -

    Total other income           (2,032)            375        (3,868)          2,332
(expense), net

Net income (loss) before       (305,131)      (298,250)      (789,642)      (637,874)
income taxes

Provision for income tax             100              -            100              -

Income (loss) from        $    (305,231) $    (298,250)   $  (789,742)   $  (637,874)
continuing operations

For the Three Months Ended May 31, 2009 and 2008

During the three-month period ended May 31, 2009, we had a net loss of $305,231.
This compares to a net loss of $298,250 for the comparable period ended May 31, 2008. Net loss per common share for these periods was $(.01) and $(.01), respectively.

Research and development ("R&D") expenses, excluding stock-based compensation charges, were $106,199 and $118,245, respectively, for the three-month periods ended May 31, 2009 and 2008. The decrease in R&D expenditures results from reduced consulting fees and lower travel expenses. As the documentation preparation and regulatory work for FDA approval intensifies, R&D expenses are expected to increase.

General and administrative expenses were $131,436 and $86,265, respectively, for the three-month periods ended May 31, 2009, and 2008. The increase results primarily from $24,000 in additional consulting fees and $9,000 in additional professional fees, with small increases and decreases in a number of other expense categories. General and administrative expenses are expected to continue to increase in the remaining periods in this fiscal year as expenses are incurred in raising the additional capital needed to bring our products to market.

Non-cash stock based compensation charges of $65,464 were recognized for the three month period ended May 31, 2009. This compares to a charge of $94,115 made for the same period in 2008. The reduction is due to a

Total other expense was $2,032 for the three month period ended May 31, 2009.
This compares to total other income of $375 for the three month period ended May 31, 2008. The charge in 2009 is for interest charges accrued on notes payable. The earnings in 2008 were for interest earned on funds held in a savings account.

For the Six Months Ended May 31, 2009 and 2008

During the six-month period ended May 31, 2009, we had a net loss of $789,742.
This compares to a net loss of $637,874 for the six-month period ended May 31, 2008. Net loss per common share for these periods was $(.02) and $(.02), respectively.

R&D expenses were $205,857 and $253,827, respectively, for the six-month periods ended May 31, 2009 and 2008. The decrease in R&D expenditures results from reduced consulting fees and travel expenses. As the documentation preparation and regulatory work for FDA approval intensifies, R&D expenses are expected to increase through the balance of 2009.

General and administrative expenses were $452,493 and $198,879, respectively, for the six-month periods ended May 31, 2009, and 2008, an increase of $253,614.
Of the increase, $200,000 results from the non-cash charge taken for the issuance of common stock for consulting services. The majority of the remaining increase results from increased consulting and professional fees. General and administrative expenses are expected to continue to increase in the remaining periods in this fiscal year as expenses are incurred in raising the additional capital needed to bring our products to market.

Non-cash stock based compensation charges of $127,424 were made for the six month period ended May 31, 2009. This compares to a charge of $187,500 recognized for the six months ended May 31, 2008. The reduction is due to a number of stock option grants which became fully vested in 2008. As the expense is recorded over the vesting period, there were no 2009 charges relating to those option grants.

Total other expense was $3,868 for the six-month period ended May 31, 2009 compared to other income of $2,332 for the six month period ended May 31, 2008.
The 2009 charge results from interest charges accrued on notes payable. The 2008 earnings were for interest earned from funds in a savings account

Financial Position

We had $354 in cash and cash equivalents as of May 31, 2009, representing a decrease of $4,014 from the $4,368 in cash as of November 30, 2008. Working capital as of May 31, 2009, was a deficit of $830,824 compared to a deficit of $394,885 as of November 30, 2008. This decrease in cash and working capital was primarily due to cash and cash equivalents used to fund our operating loss for the period, coupled with increases in accrued liabilities.

Liquidity and Capital Resources

To date, we have financed our operations principally through private placements of our equity securities. Net cash of $88,563 was used for operating activities during the six months ended May 31, 2009. This is a decrease of $258,690 as compared to the $347,253 used during the same period ended May 31, 2008. Also, during the six months ended May 31, 2009, net cash of $19,601 was used for the purchase of intangible assets. This compares with $28,564 used for the purchase of intangible assets and equipment for the same period ended May 31, 2008. As of May 31, 2009, our current liabilities totaled $898,807, and we had a working capital deficit of $830,824. As of May 31, 2009, we had no long-term debt obligations.

Our working capital requirements for the foreseeable future will vary based upon a number of factors, including the costs to complete development work, the cost of bringing our nitric oxide generator and nitric oxide tablets to commercial viability, the costs associated with obtaining FDA approval, the timing of the market launches of our products and the level of sales of those products when introduced into the market place. As of May 31, 2009, we had accounts payable and accrued liabilities totaling $898,807. At May 31, 2009, we had cash and cash equivalents of $354. We know that existing cash and cash equivalents will be insufficient to execute our business

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to our goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, and regulatory and technical factors affecting our operations, products, services and prices.

Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.