Sauer Energy 10-Q21 Jul 142014 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
Document and Entity Information	31-May-14
Document and Entity Information:	'
Entity Registrant Name	'SAUER ENERGY, INC.
Document Type	'10-Q
Document Period End Date	31-May-14
Amendment Flag	'false
Entity Central Index Key	'0001446152
Current Fiscal Year End Date	'--08-31
Entity Common Stock, Shares Outstanding	109,526,296
Entity Filer Category	'Smaller Reporting Company
Entity Current Reporting Status	'Yes
Entity Voluntary Filers	'No
Entity Well-known Seasoned Issuer	'No
Document Fiscal Year Focus	'2014
Document Fiscal Period Focus	'Q3

Statement_of_Financial_Positio

Statement of Financial Position (USD $)	31-May-14	Aug. 31, 2013
Balance Sheets	'	'
Cash and Cash Equivalents, at Carrying Value	$462,792	$19,179
Prepaid Expense, Current	911	'
Assets, Current	463,703	19,179
Property, Plant and Equipment, Gross	66,202	62,782
Indefinite-Lived Intangible Assets (Excluding Goodwill)	1,905,000	1,905,000
Other Assets, Noncurrent	14,000	14,000
Assets, Noncurrent	1,985,202	1,981,782
Assets	2,448,905	2,000,961
Accrued Liabilities, Current	6,510	5,267
Loans Payable, Current	600,000	344,240
Liabilities, Current	606,510	349,507
Liabilities	606,510	349,507
Common Stock, Value, Issued	10,953	9,374
Additional Paid in Capital, Common Stock	7,892,434	6,329,522
Retained Earnings (Accumulated Deficit)	-6,060,992	-4,687,442
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,842,395	1,651,454
Liabilities and Equity	$2,448,905	$2,000,961

Statement_of_Income

Statement of Income (USD $)	3 Months Ended		9 Months Ended		70 Months Ended
Statement of Income (USD $)	31-May-14	31-May-13	31-May-14	31-May-13	31-May-14
Operating Expenses	'	'	'	'	'
Professional Fees	$42,224	$12,541	$133,922	$53,445	$517,643
Consulting	49,375	96,395	101,578	155,090	1,314,885
Other Cost and Expense, Operating	'	'	-325,000	445,000	120,000
Research and Development Expense	30,514	3,791	83,547	56,643	997,359
General and Administrative Expense	75,379	57,940	227,492	194,848	1,959,094
Operating Expenses	197,492	170,667	221,539	905,026	4,908,981
Operating Income (Loss)	-197,492	-170,667	-221,539	-905,026	-4,908,981
Nonoperating Income (Expense)	'	'	'	'	'
Other Nonoperating Income (Expense)	-1,024,526	'	-1,152,011	'	-1,152,011
Nonoperating Income (Expense)	-1,024,526	'	-1,152,011	'	-1,152,011
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	-1,222,018	-170,667	-1,373,550	-905,026	-6,060,992
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	-1,222,018	-170,667	-1,373,550	-905,026	-6,060,992
Net Income (Loss) Attributable to Parent	-1,222,018	-170,667	-1,373,550	-905,026	-6,060,992
ComprehensiveIncomeNetOfTax	($1,222,018)	($170,667)	($1,373,550)	($905,026)	($6,060,992)
Earnings Per Share, Basic	($0.01)	$0	($0.01)	($0.01)	'
Weighted Average Number of Shares Outstanding, Basic	103,765,349	85,582,367	98,679,393	91,603,425	'
Earnings Per Share, Diluted	($0.01)	$0	($0.01)	($0.01)	'
Weighted Average Number of Shares Outstanding, Diluted	103,765,349	85,582,367	98,679,393	91,603,425	'

Statement_of_Cash_Flows

Statement of Cash Flows (USD $)	9 Months Ended		70 Months Ended
Statement of Cash Flows (USD $)	31-May-14	31-May-13	31-May-14
Statement of Cash Flows	'	'	'
Net Income (Loss)	($1,373,550)	($905,026)	($6,060,992)
Security Deposit	-14,000	'	-14,000
Depreciation	19,128	24,975	95,535
Allocated Share Based Compensation Expense	29,890	'	29,890
Issuance of Stock and Warrants for Services or Claims	'	'	2,875,140
Adjustment of Warrants Granted for Services	18,094	'	18,094
Other Noncash Income (Expense)	778,125	'	778,125
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities	-528,313	-880,051	-2,278,208
Increase (Decrease) in Inventories	'	'	1,000
Increase (Decrease) in Prepaid Expense and Other Assets	-911	'	-911
Increase (Decrease) in Operating Assets	-911	'	89
Increase (Decrease) in Accounts Payable and Accrued Liabilities	-2,406	'	7,101
Increase (Decrease) in Operating Capital	-2,406	'	7,101
Net Cash Provided by (Used in) Operating Activities	-531,630	-880,051	-2,271,018
Payments to Acquire Property, Plant, and Equipment	-22,547	'	-136,736
Payments to Acquire Intangible Assets	'	-430,000	-430,000
Net Cash Provided by (Used in) Investing Activities	-22,547	-430,000	-566,736
Payments for (Proceeds from) Deposit on Loan	370,000	461,500	830,022
Proceeds From Issuance Of Other Long Term Debt	'	'	82,256
Proceeds from (Repayments of) Notes Payable	-110,000	-150,000	-230,022
Proceeds from (Repayments of) Other Long-term Debt	'	'	-82,256
Proceeds from Issuance of Common Stock	737,790	1,002,320	2,700,546
Net Cash Provided by (Used in) Financing Activities	997,790	1,313,820	3,300,546
Cash and Cash Equivalents, Period Increase (Decrease)	443,613	3,769	462,792
Cash and Cash Equivalents, at Carrying Value	19,179	46,954	'
Cash and Cash Equivalents, at Carrying Value	$462,792	$50,723	$462,792

Note_1_Organization_and_Summar

Note 1 - Organization and Summary of Significant Accounting Policies	9 Months Ended
	31-May-14
Notes	'
Note 1 - Organization and Summary of Significant Accounting Policies:	'
	Note 1 - Organization and summary of significant accounting policies:

	These unaudited interim financial statements as of and for the three months ended May 31, 2014 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.
	These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end August 31, 2013 report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the six month period ended May 31, 2014 are not necessarily indicative of results for the entire year ending August 31, 2014.
	Following is a summary of our organization and significant accounting policies:

	Organization and nature of business – Sauer Energy, Inc. (formerly: BCO Hydrocarbon Ltd.) (identified in these footnotes as “we” or the “Company”) was incorporated in the State of Nevada, United States of America on August 19, 2008. It was a natural resource exploration stage company and anticipated acquiring, exploring, and if warranted and feasible, developing natural resource assets. BCO had the right to acquire a 50% working interest in an oil and gas lease in Alberta, Canada.

	Sauer Energy, Inc. (the “Old Sauer”) was incorporated in California on August 7, 2008. The Company is a development stage company engaged in the design and manufacture of vertical axis wind turbine (VAWT) systems.

	On July 25, 2010, the Company, the president and sole director Malcolm Albery (“MA”) and Dieter Sauer, Jr. (“DS”) completed a closing (the “Closing”) under an Agreement and Plan of Reorganization, dated as of June 23, 2010 (the “Agreement”). The Agreement provided: (a) for the purchase by DS of all of the 39,812,500 shares of the Company owned by MA for $55,200; (b) the contribution by DS of all of the shares of Old Sauer, a California corporation (“SEI”) to the Company; (c) the assignment of certain patent rights related to wind turbine technology held by DS to the Company; and (d) the election of DS to the Company’s board of directors. In connection with the Closing, Mr. Sauer was elected President and CEO of the Company and two former shareholders of the Company agreed to (i) indemnify the Company against any claims resulting from breaches of representations and warranties by the Company in the Agreement; (ii) to acquire and cause to be returned for cancellation an aggregate of 67,437,500 shares of the Company’s common Stock, including all of the shares owned by former officer and director Daniel Brooks and; (3) assume all of the Company’s obligations in connection with certain oil and gas leases in Canada.

	The agreement was executed on July 25, 2010. Sauer Energy, Inc. became a wholly-owned subsidiary of the Company. On August 29, Malcolm Albery resigned as President and was replaced by Dieter Sauer. In the following month, the Company changed its name from BCO Hydrocarbon Ltd. to Sauer Energy, Inc.

	Note 1 - Organization and summary of significant accounting policies (continued):

	The Company’s fiscal year-end is August 31.

	Basis of consolidation – Not applicable.

	Basic of presentation – Our accounting and reporting policies conform to U.S. generally accepted accounting principles applicable to development stage enterprises.

	Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

	Cash and cash equivalents - For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents.


	Fixed assets - Property, plant and equipment is valued at cost less accumulated depreciation and impairment losses. If the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item, they are accounted for and depreciated separately Depreciation expense is recognized using the straight-line method for the vehicle and the double declining method for all remaining assets and is amortized over the estimated useful life of the related asset. The following useful lives are assumed:

	Vehicle & Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years

	Furniture & Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Years

	Fair Value of Financial Instruments - The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820- 10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:


	- Level 1: Quoted prices in active markets for identical assets or liabilities.


	- Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.


	- Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

	The carrying amounts of the Company’s financial instruments as of May 31, 2014, reflect:


	- Cash: Level One measurement based on bank reporting.
	- Cash: Level One measurement based on bank reporting.
	- Loan receivable and loans from Officers and related parties: Level 2 based on promissory notes.

	Federal income taxes -The Company utilizes FASB ACS 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. When, in the opinion of management, it is more likely than not that some part or all of the deferred tax assets will not be realized.

	Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

	Research and development costs - The Company expenses costs of research and development cost as incurred. Research and development costs for the three months ended May 31, 2014, and May 31, 2013, was $30,514 and $3,791 respectively.

	Advertising. Advertising and marketing expenses for the three months ended May 31, 2014, and May 31, 2013, was $2,540 and $650 respectively.


	Basic and Diluted Earnings (Loss) Per Share - Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The Company has potentially dilutive securities outstanding consisting of warrants to purchase common stock, (see Note 10). However their exercise would be anti-dilutive, since the Company is in a loss position, and they are not counted in the calculation of loss per share.

	Development Stage Company - The Company is considered a development stage company, with no operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915. ACS 915 requires companies to report their operations, shareholders’ deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as August 7, 2008. Since inception, the Company has incurred an operating loss of $4,870,685. The Company’s working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has provided financial data since August 7, 2008 in the financial statements, as a means to provide readers of the Company’s financial information to be able to make informed investment decisions.
Fair Value—In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." The amendments in this update generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in this update are to be applied prospectively. The amendments are effective for interim and annual periods beginning after December 15, 2011. Early application is not permitted. The Company does not expect this guidance to have a significant impact on its consolidated financial position, results of operations or cash flows.
Comprehensive Income —In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." This update was amended in December 2011 by ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." This update defers only those changes in update 2011-05 that relate to the presentation of reclassification adjustments. All other requirements in update 2011-05 are not affected by this update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. ASU No. 2011-05 and 2011-12 are effective for fiscal years
(including interim periods) beginning after December 15, 2011. The Company does not expect this guidance to have a significant impact on its financial position, results of operations or cash flows.

Offsetting Assets and Liabilities—In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities." The amendments in this update require enhanced disclosures around financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The amendments are effective during interim and annual periods beginning on or after January 1, 2013. The Company does not expect this guidance to have any impact on its consolidated financial position, results of operations or cash flows.
A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and Page preliminary nature of those proposed standards, the Company’s management has not determined whether implementation of such standards would be material to its financial statements.

Share based payments and awards
The company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation, or Topic 718), which supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date, (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black- Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of Topic 718; however the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility; however, due to the thinly traded nature of our stock, we have chosen to use an average of the annual volatility of like companies in our industry. For the “risk-free interest rate”, we use the Constant Maturity Treasury rate on 90 day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20 trading day average. At the time of grant, the share based-compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. The expense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates. For the three months ended November 30, 2013, we recognized

Note_3_Going_Concern

Note 3 - Going Concern	9 Months Ended
Note 3 - Going Concern	31-May-14
Notes	'
Note 3 - Going Concern	'
	Note 3 – Going Concern

	The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has accumulated a deficit of $6,060,992 as of May 31, 2014.

	In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management plans to raise additional capital through the sale of stock to pursue business development activities.

Note_4_Property_and_Equipment

Note 4 - Property and Equipment	9 Months Ended
	31-May-14
Notes	'
Note 4 - Property and Equipment	'
	Note 4 – Property and Equipment


	Property and Equipment consisted of the following at May 31, 2014 and August 31, 2013	31-May-14	31-Aug-13
	Computer, equipment & truck	$ 139,189	$ 139,189
	Less: Accumulated depreciation/amortization	(87,683)	(76,407)
	Property and equipment, net	$ 51,506	$ 62,782

Note_5_Asset_Purchase

Note 5 - Asset Purchase	9 Months Ended
	31-May-14
Notes	'
Note 5 - Asset Purchase	'
	Note 5 – Asset Purchase

	On May 11, 2012, the Company entered into an Asset Purchase Agreement with St. George Investments LLC, an Illinois limited liability company, to acquire certain assets in foreclosure for 6,000,000 common shares. The assets were formerly owned by Helix Wind, Inc., a Nevada corporation in the same business as the Company. In the future, the Company plans to amortize the intellectual property. The assets and agreed prices were:



	Asset Purchase	11-May-12
	Tangible Assets
	Equipment	$ 23,000
	Supplies	1,000
	Inventory	1,000
	Total Tangible Assets	$ 25,000

	Intangible Assets
	Goodwill	$ 5,000
	Intellectual Property (10 patents, 2 trademarks, network system, wind turbine monitoring system, URL	1,467,500
	Restrictive Covenant	$ 2,500
	Total intangible assets acquired	$ 1,475,000

	Total Assets acquired	$ 1,500,000


	Note 5 – Restricted Covenant

	In January, 2013, the Company entered into an amendment to the Asset Purchase Agreement of May 11, 2012 with the Seller of the assets. The Agreement contained the Company’s guarantee to indemnify the Seller against a certain drop in stock price of stock received in payment for the assets. The “Protection Period” in the agreement lasts until the Company receives cash consideration of five million dollars (the “Protection Amount”) from the issuance of common stock. Such a contingency could not be quantified by the Company and none was recorded at the fiscal year ended August 31, 2012. The Protection Period was amended with a new beginning time: nine months from August 2, 2012 or the date that an S1 stock registration statement is recorded, (the earlier). It was further agreed that Seller would forbear enforcement of the guarantee prior to the beginning of the Protection Period for the payment of 2,000,000 common shares of the Company. The stock was issued on January 7, 2013. The cost of the issue was recorded as a Restricted Covenant. The Company entered into a settlement on February 3, 2014, which ended this restricted covenant.

Note_6_Related_Party_Transacti

Note 6 - Related Party Transactions	9 Months Ended
Note 6 - Related Party Transactions	31-May-14
Notes	'
Note 6 - Related Party Transactions:	'
	Note 6 – Related Party Transactions:

Note_7_Commitments_and_Conting

Note 7 - Commitments and Contingencies	9 Months Ended
	31-May-14
Notes	'
Note 7 - Commitments and Contingencies:	'
	Note 7 – Commitments and Contingencies:

	In September 2012, the Company leased office and laboratory space in Camarillo, California, for three years for monthly rental payments of $7,000 per month.

	Lease Commitments – for the following two fiscal years from June 1, 2014, through the end of the lease:

	For the period through
	Fiscal year ended
	August 31,

	2014	$ 21,000
	2015	$ 84,000
		$ 105,000

Note_8_Federal_Income_Tax

Note 8 - Federal Income Tax	9 Months Ended
Note 8 - Federal Income Tax	31-May-14
Notes	'
Note 8 - Federal Income Tax:	'
	Note 8 - Federal income tax:

	No provision was made for federal income tax, since the Company had a significant net operating loss. Net operating loss carryforwards may be used to reduce taxable income through the year 2033. The availability of the Company’s net operating loss carryforwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock, unless the same or similar business is carried on. The net operating loss carryforward for federal and state income tax purposes was approximately $151,532 for the six months ended May 31, 2014. The Company has net operating losses carried forward of approximately $4,838,974 for tax purposes which will expire in 2028 through 2034 if not utilized.

	No provision was made for federal income tax, since the Company had an operating loss and has accumulated net operating loss carryforwards. .

Note_9_Capital_Stock

Note 9 - Capital Stock

9 Months Ended

31-May-14

Notes

Note 9 - Capital Stock

Note 9 – Capital Stock

During the period September 1 to October 17, 2011, the Company entered into a series of private placement agreements with various investors involving issuing units of securities at $0.30 per unit. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each, expiring July 31, 2013. The private placement was oversubscribed and the Company accepted additional private placement funds.

On October 17, 2011 the Company issued 1,275,337 units of the securities in consideration of funds received of $382,601.

On October 17, 2011, the Company issued a total of 522,900 shares of restricted common stock to certain consultants as compensation for services. The fair value of the stock was $0.51. Based on the fair value of the common stock on the day of issuance, $20,462 was charged to consulting expense for the three months ended November 30, 2011, which was pro-rated for the six month period of the restriction.

On October 17, 2011, the Company issued 200,000 shares of common stock to a consulting firm for services to be provided. The fair value of the common stock on the day it was issued was $0.51 per share. Based on the fair value of the stock on the day of issuance, $8,046 less $200 contributed was charged to consulting, which was pro-rated for the six month period of the restriction.

On October 17, 2011, the Company issued 200,000 shares of common stock to a consulting firm for services to be provided. The fair value of the common stock on the day it was issued was $0.51 per share. Based on the fair value of the stock on the day of issuance, $20,988 was charged to consulting, which was pro-rated for the six month period of the restriction.

On November 10, 2011, the Company issued 3,350 units of securities at $0.30 per unit for $1,002 cash. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each. The common stock purchase warrants expired July 31, 2013.

On December 1, 2011, the Company issued 650,000 units of securities to seven investors at $0.30 per unit for $195,000 cash. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each, expiring July 31, 2013.

On December 1, 2011, a correction was made to a common stock certificate, reducing shares by 3,330.

On December 1, 2011, the Company issued 24,000 units of securities to an investor at $0.25 per unit for $6,000 cash. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.60 each. The common stock purchase warrants expired July 31, 2013.

On January 24, 2012, the Company issued 125,000 shares of common stock at the closing price of $0.60 per share for legal fees of $75,000.

On January 26, 2012, the Company issued 25,000 shares of common stock at the closing price of $0.60 per share for legal fees of $15,000.

On April 30, 2012, the Company issued 363,000 shares of common stock at the closing price of $0.34 per share for services by six providers.

On May 11, 2012 the Company issued 6,000,000 shares of common stock pursuant to an Asset Purchase Agreement for certain wind turbine assets including intangible assets the price of which was $1,500,000, representing a stock price of $0.25 per share.

On July 31, 2012, the Company issued 808,000 units of securities at $0.25 per unit for $202,000 cash. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and one (1) common stock purchase warrant with an exercise price of $0.50 each, expiring July 31, 2014.

On July 31, 2012, the Company issued 100,000 shares of common stock at $0.12 per share for legal fees of $12,000.

On July 31, 2012, the Company issued 1,000,000 shares of common stock at $0.12 per share for contract services of $120,000.

On October 10, 2012, the Company issued 950,980 shares of common stock at $0.126 per share to St George Investments LLC for $120,000 pursuant to an investment agreement.

On November 28, 2012, the Company issued 200,000 shares of common stock at $0.25 per share for $50,000.

On December 14, 2012, the Company issued 100,000 shares of common stock at $0.21 per share for consulting services of $21,000.

On December 14, 2012, the Company issued 1,479,963 shares of common stock at $0.2196 per share for commitment fees of $325,000.

On December 14, 2012, the Company issued 12,000 shares of common stock at $0.21 per share for consulting services of $2,520.

On January 7, 2013, the Company issued 2,000,000 shares of common stock at $0.215 per share for a restricted covenant.

On March 12, 2013, the Company issued 240,000 shares of common stock at $0.12 per share for consulting services of $28,800.

On April 5, 2013, the Company issued 250,000 shares of common stock at $0.10 per share for consulting services of $25,000.

On June 4, 2013, the Company entered into a private placement agreement that involved issuing 400,000 units of securities at $0.25 per unit for a total amount of cash of $100,000. Each unit consisted of one (1) share of common stock, par value $0.0001 per share and two (2) common stock purchase warrants for a total of 800,000 warrants expiring July 31, 2015 with an exercise price of $0.40 each.

On July 12, 2013, the Company issued 220,000 shares of common stock for $0.34 per share for consulting services of $74,800.

On July 12, 2013, the Company issued 50,000 shares of common stock for $0.34 per share for consulting services of $17,000.

On July 12, 2013, the Company issued 200,000 shares of common stock for $0.34 per share for consulting services of $68,000.

On July 12, 2013, the Company issued 50,000 shares of common stock for $0.34 per share for a bonus for consulting services of $17,000.

On July 12, 2013, the Company issued 35,000 shares of common stock for $0.34 per share for a bonus for consulting services of $11,900.

On July 12, 2013, the Company issued 100,000 shares of common stock for $0.34 per share for consulting services of $34,000.

On July 12, 2013, the Company issued 35,000 shares of common stock for $0.34 per share for consulting services of $11,900.

On August 16, 2013, the Company issued 151,515 shares of common stock for $0.132 per share as a conversion of $20,000of a Note Payable.

On October 2, 2013, the Company issued 200,000 shares of common stock for $0.068 per share as a conversion of $13,600 of a Note Payable.

On October 9, 2013, the Company issued 500,000 shares of common stock for $0.056 per share as a conversion of $28,000 of a Note Payable.

On October 17, 2013, the Company issued 555,720 shares of common stock for $0.13 per share for Equity Line funding of $75,000.

On November 13, 2013, the Company issued 250,000 shares of common stock for $0.1056 per share for Equity Line funding of $26,400.

On November 14, 2013, the Company issued 300,000 shares of common stock for $0.10288 per share for Equity Line funding of $30,864.

On November 19, 2013, the Company issued 300,000 shares of common stock for $0.056 per share as a conversion of $16,800 of a Note Payable.

On November 19, 2013, the Company issued 300,000 shares of common stock for $0.1071 per share for Equity Line funding of $32,136.

On December 3, 2013, the Company issued 300,000 shares of common stock for $0.09888 per share for Equity Line funding of $29,664.

On December 10, 2013, the Company issued 300,000 shares of common stock for $0.09584 per share for Equity Line funding of $28,752.

On December 17, 2013, the Company issued 290,000 shares of common stock for $0.06660 per share as a conversion of $19,314 of a Note Payable.

On January 9, 2014, the Company issued 332,742 shares of common stock for $0.0902 per share for Equity Line funding of $30,000.

On January 17, 2014, the Company issued 300,000 shares of common stock for $0.06060 per share as a conversion of $18,180 of a Note Payable.

On January 22, 2014, the Company issued 349,097 shares of common stock for $0.0859 per share for Equity Line funding of $30,000.

On January 31, 2013, the Company issued 310,000 shares of common stock for $0.0486 per share as a conversion of $15,066 of a Note Payable.

On February 4, 2014, the Company issued 500,000 shares of common stock for $0.0830 per share for Equity Line funding of $30,000.

On February 18, 2014, the Company issued 500,741 shares of common stock for $0.0486 per share as a conversion of $24,336 of a Note Payable.

On February 27, 2014, the Company issued 330,235 shares of common stock for $0.08176 per share

for Equity Line funding of $27,000, which was received by the Company on March 3, 2014.

On March 20, 2014, the Company issued 312,500 shares of common stock for $0.0800 per share for Equity Line funding of $25,000.

On March 31, 2014, the Company issued 577,741 shares of common stock for $0.0900 per share for Equity Line funding of $50,000.

On April 2, 2014, the Company issued 371,645 shares of common stock for $0.0942 per share for Equity Line funding of $35,000.

On April 9, 2014, the Company issued 400,000 shares of common stock for $0.950 per share for Equity Line funding of $38,016.

On April 17, 2014, the Company issued 352,936 shares of common stock for $0.0992 per share for Equity Line funding of $35,000.

On April 21, 2014, the Company issued 5,000,000 shares of common stock pursuant to settlement terms of the Sauer v. St George civil action filed in Ventura County Court.

On April 21, 2014, the Company entered into a private placement agreement that involved issuing 2,000,000 units of securities at $0.15 per unit for a total amount of cash of $300,000 with no warrants issued.

On April 25, 2014, the Company issued 320,000 shares of common stock for $0.1010 per share for Equity Line funding of $32,332.80.

On May 8, 2014, the Company issued 310,000 shares of common stock for $0.0880 per share for Equity Line funding of $27,325.

On May 21, 2014, the Company issued 310,000 shares of common stock for $0.0826 per share for Equity Line funding of $25,613.

On May 30, 2014, the Company issued 500,000 shares of common stock for $0.0500 per share for consulting of $25,000.

As of May 31, 2014, the Company was authorized to issue 650,000,000 shares of par value $0.0001 common stock, of which 109,526,296 shares of common stock were issued and outstanding.

Note 10 – Warrants

No warrants were issued during the three months ended May 31, 2013. No warrants were issued in the three months ended May 31, 2014.

During the previous fiscal year, the Company entered into a series of private placement agreements with various investors. (Refer to Note 9– Capital Stock).

The following table is a summary of information about the warrants outstanding at May 31, 2014:

Shares Underlying Warrants Outstanding

Range of Exercise Price

Shares Underlying \Warrants Outstanding

Weighted Average Remaining Contractual Life

Weighted Average

Exercise Price

$0.18 ~ $0.50

2,632,000

0.71 years

0.35

The following table is a summary of activity of outstanding stock warrants:

Number of

Weighted Average Exercise Price

Warrants

Balance, February 28, 2014

2,832,000

0.36

Warrants expired

-200,000-

-0-

Warrants cancelled

-0-

Warrants granted

-0-

Warrants exercised

-0-

0.35

Balance, May 31, 2014

2,632,000

Note_1_Organization_and_Summar1

Note 1 - Organization and Summary of Significant Accounting Policies: Nature of Operations (Policies)	9 Months Ended
	31-May-14
Policies	'
Nature of Operations	'
	Organization and nature of business – Sauer Energy, Inc. (formerly: BCO Hydrocarbon Ltd.) (identified in these footnotes as “we” or the “Company”) was incorporated in the State of Nevada, United States of America on August 19, 2008. It was a natural resource exploration stage company and anticipated acquiring, exploring, and if warranted and feasible, developing natural resource assets. BCO had the right to acquire a 50% working interest in an oil and gas lease in Alberta, Canada.

	Sauer Energy, Inc. (the “Old Sauer”) was incorporated in California on August 7, 2008. The Company is a development stage company engaged in the design and manufacture of vertical axis wind turbine (VAWT) systems.

	On July 25, 2010, the Company, the president and sole director Malcolm Albery (“MA”) and Dieter Sauer, Jr. (“DS”) completed a closing (the “Closing”) under an Agreement and Plan of Reorganization, dated as of June 23, 2010 (the “Agreement”). The Agreement provided: (a) for the purchase by DS of all of the 39,812,500 shares of the Company owned by MA for $55,200; (b) the contribution by DS of all of the shares of Old Sauer, a California corporation (“SEI”) to the Company; (c) the assignment of certain patent rights related to wind turbine technology held by DS to the Company; and (d) the election of DS to the Company’s board of directors. In connection with the Closing, Mr. Sauer was elected President and CEO of the Company and two former shareholders of the Company agreed to (i) indemnify the Company against any claims resulting from breaches of representations and warranties by the Company in the Agreement; (ii) to acquire and cause to be returned for cancellation an aggregate of 67,437,500 shares of the Company’s common Stock, including all of the shares owned by former officer and director Daniel Brooks and; (3) assume all of the Company’s obligations in connection with certain oil and gas leases in Canada.

	The agreement was executed on July 25, 2010. Sauer Energy, Inc. became a wholly-owned subsidiary of the Company. On August 29, Malcolm Albery resigned as President and was replaced by Dieter Sauer. In the following month, the Company changed its name from BCO Hydrocarbon Ltd. to Sauer Energy, Inc.

	Note 1 - Organization and summary of significant accounting policies (continued):

	The Company’s fiscal year-end is August 31.

Note_1_Organization_and_Summar2

Note 1 - Organization and Summary of Significant Accounting Policies: Basis of Consolidation - Not Applicable. (Policies)	9 Months Ended
	31-May-14
Policies	'
Basis of Consolidation - Not Applicable.	'
	Basis of consolidation – Not applicable.

	Basic of presentation – Our accounting and reporting policies conform to U.S. generally accepted accounting principles applicable to development stage enterprises.

Note_1_Organization_and_Summar3

Note 1 - Organization and Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies)	9 Months Ended
	31-May-14
Policies	'
Use of Estimates, Policy	'
	Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note_1_Organization_and_Summar4

Note 1 - Organization and Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)	9 Months Ended
	31-May-14
Policies	'
Cash and Cash Equivalents	'
	Cash and cash equivalents - For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents.

Note_1_Organization_and_Summar5

Note 1 - Organization and Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy (Policies)	9 Months Ended
	31-May-14
Policies	'
Property, Plant and Equipment, Policy	'
	Fixed assets - Property, plant and equipment is valued at cost less accumulated depreciation and impairment losses. If the costs of certain components of an item of property, plant and equipment are significant in relation to the total cost of the item, they are accounted for and depreciated separately Depreciation expense is recognized using the straight-line method for the vehicle and the double declining method for all remaining assets and is amortized over the estimated useful life of the related asset. The following useful lives are assumed:

	Vehicle & Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years

	Furniture & Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Years

Note_1_Organization_and_Summar6

Note 1 - Organization and Summary of Significant Accounting Policies: Fair Value Measurement, Policy (Policies)	9 Months Ended
	31-May-14
Policies	'
Fair Value Measurement, Policy	'
	Fair Value of Financial Instruments - The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820- 10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:


	- Level 1: Quoted prices in active markets for identical assets or liabilities.


	- Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.


	- Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

	The carrying amounts of the Company’s financial instruments as of May 31, 2014, reflect:


	- Cash: Level One measurement based on bank reporting.
	- Cash: Level One measurement based on bank reporting.
	- Loan receivable and loans from Officers and related parties: Level 2 based on promissory notes.

Note_1_Organization_and_Summar7

Note 1 - Organization and Summary of Significant Accounting Policies: Income Tax, Policy (Policies)	9 Months Ended
	31-May-14
Policies	'
Income Tax, Policy	'
	Federal income taxes -The Company utilizes FASB ACS 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. When, in the opinion of management, it is more likely than not that some part or all of the deferred tax assets will not be realized.

	Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

Note_1_Organization_and_Summar8

Note 1 - Organization and Summary of Significant Accounting Policies: Research and Development (Policies)	9 Months Ended
	31-May-14
Policies	'
Research and Development	'
	Research and development costs - The Company expenses costs of research and development cost as incurred. Research and development costs for the three months ended May 31, 2014, and May 31, 2013, was $30,514 and $3,791 respectively.

Note_1_Organization_and_Summar9

Note 1 - Organization and Summary of Significant Accounting Policies: Advertising (Policies)	9 Months Ended
	31-May-14
Policies	'
Advertising	'
	Advertising. Advertising and marketing expenses for the three months ended May 31, 2014, and May 31, 2013, was $2,540 and $650 respectively.

Recovered_Sheet1

Note 1 - Organization and Summary of Significant Accounting Policies: Earnings Per Share, Policy (Policies)	9 Months Ended
	31-May-14
Policies	'
Earnings Per Share, Policy	'
	Basic and Diluted Earnings (Loss) Per Share - Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The Company has potentially dilutive securities outstanding consisting of warrants to purchase common stock, (see Note 10). However their exercise would be anti-dilutive, since the Company is in a loss position, and they are not counted in the calculation of loss per share.

Recovered_Sheet2

Note 1 - Organization and Summary of Significant Accounting Policies: Development Stage Enterprise General Disclosures (Policies)	9 Months Ended
	31-May-14
Policies	'
Development Stage Enterprise General Disclosures	'
	Development Stage Company - The Company is considered a development stage company, with no operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915. ACS 915 requires companies to report their operations, shareholders’ deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as August 7, 2008. Since inception, the Company has incurred an operating loss of $4,870,685. The Company’s working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has provided financial data since August 7, 2008 in the financial statements, as a means to provide readers of the Company’s financial information to be able to make informed investment decisions.
	Fair Value—In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." The amendments in this update generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in this update are to be applied prospectively. The amendments are effective for interim and annual periods beginning after December 15, 2011. Early application is not permitted. The Company does not expect this guidance to have a significant impact on its consolidated financial position, results of operations or cash flows.
	Comprehensive Income —In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." This update was amended in December 2011 by ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." This update defers only those changes in update 2011-05 that relate to the presentation of reclassification adjustments. All other requirements in update 2011-05 are not affected by this update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. ASU No. 2011-05 and 2011-12 are effective for fiscal years
	(including interim periods) beginning after December 15, 2011. The Company does not expect this guidance to have a significant impact on its financial position, results of operations or cash flows.

	Offsetting Assets and Liabilities—In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities." The amendments in this update require enhanced disclosures around financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The amendments are effective during interim and annual periods beginning on or after January 1, 2013. The Company does not expect this guidance to have any impact on its consolidated financial position, results of operations or cash flows.
	A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and Page preliminary nature of those proposed standards, the Company’s management has not determined whether implementation of such standards would be material to its financial statements.

Recovered_Sheet3

Note 1 - Organization and Summary of Significant Accounting Policies: Share Based Payments and Awards (Policies)	9 Months Ended
	31-May-14
Policies	'
Share Based Payments and Awards	'
	Share based payments and awards
	The company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation, or Topic 718), which supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and its related implementation guidance and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date, (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black- Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of Topic 718; however the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility; however, due to the thinly traded nature of our stock, we have chosen to use an average of the annual volatility of like companies in our industry. For the “risk-free interest rate”, we use the Constant Maturity Treasury rate on 90 day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20 trading day average. At the time of grant, the share based-compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. The expense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates. For the three months ended November 30, 2013, we recognized

Note_4_Property_and_Equipment_

Note 4 - Property and Equipment: Property, Plant and Equipment (Tables)	9 Months Ended
	31-May-14
Tables/Schedules	'
Property, Plant and Equipment	'


	Property and Equipment consisted of the following at May 31, 2014 and August 31, 2013	31-May-14	31-Aug-13
	Computer, equipment & truck	$ 139,189	$ 139,189
	Less: Accumulated depreciation/amortization	(87,683)	(76,407)
	Property and equipment, net	$ 51,506	$ 62,782

Note_5_Asset_Purchase_Schedule

Note 5 - Asset Purchase: Schedule of Purchase Price Allocation (Tables)	9 Months Ended
	31-May-14
Tables/Schedules	'
Schedule of Purchase Price Allocation	'



	Asset Purchase	11-May-12
	Tangible Assets
	Equipment	$ 23,000
	Supplies	1,000
	Inventory	1,000
	Total Tangible Assets	$ 25,000

	Intangible Assets
	Goodwill	$ 5,000
	Intellectual Property (10 patents, 2 trademarks, network system, wind turbine monitoring system, URL	1,467,500
	Restrictive Covenant	$ 2,500
	Total intangible assets acquired	$ 1,475,000

	Total Assets acquired	$ 1,500,000

Note_7_Commitments_and_Conting1

Note 7 - Commitments and Contingencies: Lease Commitments (Tables)	9 Months Ended
	31-May-14
Tables/Schedules	'
Lease Commitments	'

	2014	$ 21,000
	2015	$ 84,000
		$ 105,000

Note_9_Capital_Stock_Schedule_

Note 9 - Capital Stock: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables)

9 Months Ended

31-May-14

Tables/Schedules

Schedule of Stockholders' Equity Note, Warrants or Rights

Shares Underlying Warrants Outstanding

Range of Exercise Price

Shares Underlying \Warrants Outstanding

Weighted Average Remaining Contractual Life

Weighted Average

Exercise Price

$0.18 ~ $0.50

2,632,000

0.71 years

0.35

Note_9_Capital_Stock_Schedule_1

Note 9 - Capital Stock: Schedule of Stockholders Equity (Tables)	9 Months Ended
	31-May-14
Tables/Schedules	'
Schedule of Stockholders Equity	'


		Number of		Weighted Average Exercise Price
		Warrants
	Balance, February 28, 2014		2,832,000	$	0.36
	Warrants expired		-200,000-		-0-
	Warrants cancelled		-0-		-0-
	Warrants granted		-0-		-0-
	Warrants exercised		-0-		-0-
				$	0.35
	Balance, May 31, 2014		2,632,000

Note_4_Property_and_Equipment_1

Note 4 - Property and Equipment: Property, Plant and Equipment (Details) (USD $)	31-May-14	Aug. 31, 2013
Details	'	'
Machinery and Equipment, Gross	$139,189	$139,189
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	-87,683	-76,407
Property, Plant, and Equipment, Owned, Net	$51,506	$62,782

Note_5_Asset_Purchase_Schedule1

Note 5 - Asset Purchase: Schedule of Purchase Price Allocation (Details) (USD $)	11-May-12
Details	'
Business Acquisition, Purchase Price Allocation, Equipment	$23,000
Business Acquisition, Purchase Price Allocation, Current Assets, Asset to be Disposed of	1,000
Business Acquisition, Purchase Price Allocation, Current Assets, Inventory	1,000
Business Acquisition, Purchase Price Allocation, Tangible Assets	25,000
Business Acquisition, Purchase Price Allocation, Goodwill Amount	5,000
Business Acquisition, Purchase Price Allocation, Intangible Assets Other than Goodwill	1,467,500
Business Acquisition, Purchase Price Allocation, Other Assets	2,500
Acquired Indefinite-lived Intangible Asset, Amount	1,475,000
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net	$1,500,000

Note_7_Commitments_and_Conting2

Note 7 - Commitments and Contingencies: Lease Commitments (Details) (USD $)	Aug. 31, 2015	Aug. 31, 2014
Details	'	'
Commitments and Contingencies	$84,000	$21,000

Note_8_Federal_Income_Tax_Deta

Note 8 - Federal Income Tax (Details) (USD $)	31-May-14
Details	'
Deferred Tax Assets, Gross	$151,532
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration	$4,838,974