----

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 20-Fo REGISTRATION STATEMENT PURSUANT TO SECTION12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31, 2009OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number 0-30858  VALCENT PRODUCTS INC.(Exact name of Registrant as specified in its charter)Not Applicable(Translation of Registrant's name into English)Alberta, Canada(Jurisdiction of incorporation or organization)789 West Pender Street, Suite 1010, Vancouver, British Columbia V6C 1H2(Address of principal executive offices)George Orr789 West Pender Street, Suite 1010, Vancouver, B.C. Canada V6C 1H2Phone: (800) 877-1626Fax: (604) 606-7980(Name, Telephone, Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act. Title of each class  Name of each exchange    on which registered      Securities registered or to be registered pursuant to Section 12(g) of the Act.Common Stock, no par value(Title of Class)   1    Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.None(Title of Class)Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 3,008,977 common shares, without par value, issued and outstanding at March 31, 2009, after having given effect to the one for eighteen share consolidation effected July 16, 2009, and 49,675,133 common shares, without par value, issued and outstanding as of September 30, 2009. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes o No x If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days.Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was requiredto submit and post such files).        Yes o  No o  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one): Large Accelerated filer     oAccelerated filer     oNon Accelerated filer     x  Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAPoInternational Financial Reporting Standards as issuedoOtherx    by the International Accounting Standards Board        If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.   Item 17 x Item 18 o If this is an annual report, indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)    2  TABLE OF CONTENTS                  PageNumberPART I      4          ITEM 1  Identity of Directors, Senior Management and Advisors  4          ITEM 2  Offer Statistics and Expected Timetable  4          ITEM 3  Key Information  4         ITEM 4  Information on the Company  14          ITEM 5  Operating and Financial Review and Prospects  24          ITEM 6  Directors, Senior Management and Employees  37          ITEM 7  Major Shareholders and Related Party Transactions  41          ITEM 8  Financial Information  46          ITEM 9  The Offer and Listing  47          ITEM 10  Additional Information  48          ITEM 11  Quantitative and Qualitative Disclosures About Market Risk  57          ITEM 12  Description of Securities Other than Equity Securities  57                    PART II      57          ITEM 13  Defaults, Dividends, Arrearages and Delinquencies  57          ITEM 14  Material Modifications to the Rights of Security Holders and Use of Proceeds  57          ITEM 15 T  Control and Procedures  57          ITEM 16  [Reserved]             ITEM 16A  Audit Committee Financial Expert  60          ITEM 16B  Code of Ethics  60          ITEM 16C  Principal Accountant Fees and Services  60          ITEM 16D  Exemptions from the Listing Standards for Audit Committee  60          ITEM 16E  Purchase of Equity Securities by the Issuer and Affiliated Purchasers  60                    PART III      F-1          ITEM 17  Financial Statements  F-1          ITEM 19  Exhibits  61        3  PART I CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS Certain written and oral statements made by our Company and subsidiaries of our Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made in this report, in other filings with the Securities and Exchange Commission (“SEC’),in press releases, and in certain other oral and written presentations. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “should”, “seeks”, “estimates”, “projects”, “predicts”, “potential”, “continues”, “intends”, and other similar words identify forward-looking statements. All statements that address operatingresults, events or developments that we expect or anticipate will occur in the future, including statements related to sales, earnings per share results, and statements expressing general expectations about future operating results, are forward-looking statements and are based upon the Company’s current expectations and various assumptions. The Company believes there is a reasonable basis for its expectations and assumptions, but there can be no assurance that the Company will realize its expectations orthat the Company’s assumptions will prove correct. Forward-looking statements are subject to risks that could cause them to differ materially from actual results. Accordingly, the Company cautions readers not to place undue reliance on forward-looking statements. We believe that these risks include but are not limited to the risks described in this report under Part I, Item 3, Subsection D entitled “Risk Factors” and Part I, Item 5, entitled “Operating and Financial Review and Prospects”and that are otherwise described from time to time in our SEC reports filed after this report. These statements appear in a number of places in this Form 20-F and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of us, our directors or our officers, with respect to, among other things: (i) our liquidity and capital resources, (ii) our financing opportunities and plans, (iii) our ability to attract customers to generate revenues, (iv) competitionin our business segment, (v) market and other trends affecting our future financial condition or results of operations, (vi) our growth strategy and operating strategy, and (vii) the declaration and/or payment of dividends. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differencesinclude, among others, those set forth in this annual report, and we undertake no obligation to update any of the forward-looking statements in this annual report on Form 20-F after the date of this report.  ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable.  ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable.  ITEM 3. KEY INFORMATION SELECTED FINANCIAL DATA We are at present a life sciences development stage company focused primarily on:   (i)the development and commercialization of our “High Density Vertical Growth System” (“VerticropTM” or “HDVG System”)  designed to produce vegetables and other plant crops,   (ii)the development of a commercial algae growing technology via Vertigro Algae Technologies LLC (“Vertigro Algae”) with Global Green Solutions, Inc. (“Global Green”), and   (iii)the development and marketing of the Tomorrow GardenTM consumer retail product.  4   ITEM 3. KEY INFORMATION - continued SELECTED FINANCIAL DATA - continued Due to economic circumstances and to make our Company more conducive to investment the shareholders of the Company approved a special resolution to reorganize the capital structure of the Company by a share consolidation of its common shares on the basis of one new sharefor each eighteen old shares.  This share consolidation became effective July 16, 2009.  Also effective July 16, 2009 our trading symbol changed to “VCTZF” and our CUSIP number changed to 918881202.  Our website is located at www.valcent.net Unless otherwise noted, all references to the number of common shares are stated on a post-consolidation basis. As at September 30, 2009, 49,675,133 common shares were issued and outstanding, the Company had 6,813,795 warrants outstanding, and no options.  In addition, the Company has certain secured promissory notes outstanding that may if not repaid on their due date of December 31, 2009 may then be converted at the election of the holdersinto common shares (see ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS, Liquidity and Capital Resources). All amounts are stated in Canadian dollars unless otherwise noted. The following selected financial data has been derived from our audited financial statements and related notes for the preceding five years and has been prepared and presented in accordance with Canadian generally accepted accounting principles. Effective March 24, 2004, we disposed of our interest in Nettron Media Group, formerly our wholly-ownedsubsidiary. The comparative financial results of Nettron Media Group for the year ended March 31, 2004 have been segregated and presented as deficit from prior operations and discontinued operations in our audited financial statements. For comparative purposes this selected financial data for the years ended March 31, 2005, 2006, 2007, 2008 and 2009 is also presented as though it were prepared under United States generally accepted accounting principles. Our audited financial statements for the year ended March31, 2009 have been prepared in accordance with Canadian generally accepted accounting principles, which, except as noted in Notes 1 and 20, conform in all material respects with those of the United States and with the requirements of the United States Securities and Exchange Commission.

| Valcent Products Inc.                                               |   | March 31, |       |   | March 31, |   |       | March 31, |   |   | March 31, |   |   | March 31, |      |
|---------------------------------------------------------------------|--------|-----------|------------|--------|-----------|--------|------------|-----------|--------|--------|-----------|--------|--------|-----------|-----------|
| Selected Financial Data                                             |   | 2009      |       |   | 2008      |   |       | 2007      |   |   | 2006      |   |   | 2005      |      |
| (Expressed in Canadian Dollars)                                     |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |
| Net Operating Revenues per Canadian and U.S. GAAP                   |   | $         | 0.00       |   |      | $      | 0.00       |      |   | $      | 0.00      |   |   | $         | 0.00      |   |   | $ | 0.00 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from operations                                                |   | $         | 15,337,285 |   |      | $      | 12,028,222 |      |   | $      | 8,171,090 |   |   | $         | 3,442,933 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from operations U.S. GAAP                                      |   | $         | 17,769,901 |   |      | $      | 12,563,451 |      |   | $      | 9,743,414 |   |   | $         | 2,844,879 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from continued operations per Canadian GAAP                    |   | $         | 15,337,285 |   |      | $      | 12,028,222 |      |   | $      | 8,171,090 |   |   | $         | 3,466,888 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from discontinued operations per Canadian GAAP                 |   | $         | 0.00       |   |      | $      | 0.00       |      |   | $      | 0.00      |   |   | $         | 0.00      |   |   | $ | 0.00 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Net loss per Canadian GAAP                                          |   | $         | 17,855,490 |   |      | $      | 12,712,358 |      |   | $      | 8,138,393 |   |   | $         | 3,466,888 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from continued operations per U.S. GAAP                        |   | $         | 18,000,141 |   |      | $      | 13,292,888 |      |   | $      | 9,749,339 |   |   | $         | 2,844,879 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss from discontinued operations per U.S. GAAP                     |   | $         | 0.00       |   |      | $      | 0.00       |      |   | $      | 0.00      |   |   | $         | 0.00      |   |   | $ | 0.00 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Net loss per U.S. GAAP                                              |   | $         | 18,000,141 |   |      | $      | 13,292,888 |      |   | $      | 9,749,339 |   |   | $         | 2,844,879 |   |   | $ | 45,694 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss per share from continued operations, basic, Canadian GAAP |   | $         | 6.43       |   |      | $      | 6.44       |      |   | $      | 7.60      |   |   | $         | 5.92      |   |   | $ | 0.13 |   |
|                                                                |   |      |       |   |      |   |       |      |   |   |      |   |   |      |      |   |   |   |   |   |
| Loss per share from discontinued operations, Canadian GAAP          |   | $         | 0.00       |   |      | $      | 0.00       |      |   | $      | 0.00      |   |   | $         | 0.00      |   |   | $ | 0.00 |   |

----

| Loss per share after discontinued operations, Canadian GAAP            |   | $      | 6.43       |   |   | $      | 6.44       |   |   | $      | 7.60      |   |   | $      | 5.92      |   |   | $      | 0.13      |   |
|------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Loss per share from continued operations, U.S. GAAP                    |   | $      | 6.47       |   |   | $      | 6.73       |   |   | $      | 9.11      |   |   | $      | 4.86      |   |   | $      | 0.13      |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Loss per share from discontinued operations, U.S. GAAP                 |   | $      | 0.00       |   |   | $      | 0.00       |   |   | $      | 0.00      |   |   | $      | 0.00      |   |   | $      | 0.00      |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Loss per share after discontinued operations, U.S.GAAP                 |   | $      | 6.47       |   |   | $      | 6.73       |   |   | $      | 9.11      |   |   | $      | 4.86      |   |   | $      | 0.13      |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Share capital per Canadian GAAP                                        |   | $      | 21,957,516 |   |   | $      | 16,691,282 |   |   | $      | 8,196,982 |   |   | $      | 4,099,870 |   |   | $      | 2,999,420 |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Share capital per U.S. GAAP                                            |   | $      | 22,070,991 |   |   | $      | 16,866,115 |   |   | $      | 8,434,032 |   |   | $      | 4,391,371 |   |   | $      | 2,999,420 |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Common shares issued                                                   |   |   | 3,008,977  |   |   |   | 2,459,636  |   |   |   | 1,703,670 |   |   |   | 877,102   |   |   |   | 357,521   |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Weighted average shares outstanding per Canadian GAAP                  |   |   | 2,782,284  |   |   |   | 1,974,763  |   |   |   | 1,070,066 |   |   |   | 586,002   |   |   |   | 357,521   |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Weighted average shares outstanding per U.S. GAAP                      |   |   | 2,782,284  |   |   |   | 1,974,763  |   |   |   | 1,070,066 |   |   |   | 586,002   |   |   |   | 357,521   |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Total Assets per Canadian GAAP                                         |   | $      | 2,351,963  |   |   | $      | 4,605,914  |   |   | $      | 4,142,485 |   |   | $      | 1,392,801 |   |   | $      | 936       |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Total Assets per U.S. GAAP                                             |   | $      | 2,351,963  |   |   | $      | 4,700,482  |   |   | $      | 4,372,786 |   |   | $      | 1,392,801 |   |   | $      | 936       |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Net assets (liabilities) per Canadian GAAP                             |   | $      | (1,031,226 | )      |   | $      | (4,009,472 | )      |   | $      | (24,376   | )      |   | $      | (441,099  | )      |   | $      | (237,950  | )      |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Net assets (liabilities) per U.S. GAAP                                 |   | $      | (1,031,226 | )      |   | $      | (3,161,013 | )      |   | $      | 665,904   |   |   | $      | (590,697  | )      |   | $      | (237,950  | )      |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Convertible debentures (current and long term portions) per U.S. GAAP) |   | $      | 11,228     |   |   | $      | 5,389,387  |   |   | $      | 2,282,483 |   |   | $      | 0.00      |   |   | $      | 0.00      |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Cash Dividends Declared per common shares, Canadian and U.S. GAAP      |   | $      | 0.00       |   |   | $      | 0.00       |   |   | $      | 0.00      |   |   | $      | 0.00      |   |   | $      | 0.00      |   |
|                                                                   |   |   |       |   |   |   |       |   |   |   |      |   |   |   |      |   |   |   |      |   |
| Exchange Rates (CND to 1 USD) Period Average                           |   | $      | 0.8969     |   |   | $      | 0.9708     |   |   | $      | 0.8789    |   |   | $      | 0.8385    |   |   | $      | 0.7842    |   |

  

| Exchange Rates (CDN to 1 USD)For the five most recent years ended March 31,calculated on the average of 12 month end closing days |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                              |   |   |
| March 31, 2009                                                                                                                    |   | $ | 0.8969 |   |
| March 31, 2008                                                                                                                    |   | $ | 0.9708 |   |
| March 31, 2007                                                                                                                    |   | $ | 0.8789 |   |
| March 31, 2006                                                                                                                    |   | $ | 0.8385 |   |
| March 31, 2005                                                                                                                    |   | $ | 0.7842 |   |

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| Exchange Rates (CDN to 1 USD)for six most recent months |   | PeriodHigh |   |   | PeriodLow |   |
|---------------------------------------------------------|--------|------------|--------|--------|-----------|--------|
|                                                    |   |       |   |   |      |   |
|                                                    |   |       |   |   |      |   |
| August 2009                                             |   | $          | 0.9402 |   |      | $      | 0.8987 |   |
| July 2009                                               |   | $          | 0.9300 |   |      | $      | 0.8527 |   |
| June 2009                                               |   | $          | 0.9269 |   |      | $      | 0.8590 |   |
| May 2009                                                |   | $          | 0.9177 |   |      | $      | 0.8296 |   |
| April 2009                                              |   | $          | 0.8344 |   |      | $      | 0.7861 |   |
| March 2009                                              |   | $          | 0.8202 |   |      | $      | 0.7653 |   |

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|   | • | brand name recognition;                                                                                                                  |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                     |
|   | • | Availability of financial resources;                                                                                                     |
|   |    |                                                                                                                                     |
|   | • | the quality and efficiency of products;                                                                                                  |
|   |    |                                                                                                                                     |
|   | • | reviews received for products from independent reviewers who publish in magazines, websites, newspapers and other industry publications; |
|   |    |                                                                                                                                     |
|   | • | Availability of access to markets;                                                                                                       |
|   |    |                                                                                                                                     |
|   | • | the price of each product; and                                                                                                           |
|   |    |                                                                                                                                     |
|   | • | the number of products then available.                                                                                                   |

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|   | • | general business conditions;                                    |
|--------|---------|-----------------------------------------------------------------|
|   | • | interest rates;                                                 |
|   | • | inflation;                                                      |
|   | • | consumer debt levels;                                           |
|   | • | the availability of consumer credit;                            |
|   | • | taxation;                                                       |
|   | • | fuel prices and electrical power rates;                         |
|   | • | unemployment trends;                                            |
|   | • | natural disasters;                                              |
|   | • | terrorist attacks and acts of war; and                          |
|   | • | other matters that influences consumer confidence and spending. |

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|   | • | the trading volume of our shares;                                                        |
|--------|---------|------------------------------------------------------------------------------------------|
|   | • | the number of securities analysts, market-makers and brokers following our common stock; |
|   | • | changes in, or failure to achieve, financial estimates by securities analysts;           |

|   | • | new products introduced or announced by us or our competitors;                                                  |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|
|   | • | announcements of technological innovations by us or our competitors;                                            |
|   | • | actual or anticipated variations in quarterly operating results;                                                |
|   | • | conditions or trends in our business industries;                                                                |
|   | • | announcements by us of significant acquisitions, strategic partnerships, joint ventures or capital commitments; |
|   | • | additions or departures of key personnel;                                                                       |
|   | • | sales of our common stock; and                                                                                  |
|   | • | general stock market price and volume fluctuations of publicly-traded, and particularly microcap, companies.    |

|   | • | deliver to a prospective investor a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | provide the prospective investor with current bid and ask quotations for the penny stock;                                                                                           |
|   | • | explain to the prospective investor the compensation of the broker-dealer and its salesperson in the transaction;                                                                   |
|   | • | provide investors monthly account statements showing the market value of each penny stock held in their account; and                                                                |
|   | • | make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.        |

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----

----

|   | (i) | the development and commercialization of our “High Density Vertical Growth System” (“VerticropTM” or “HDVG System”)  designed to produce vegetables and other plant crops, |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the development of a commercial algae growing technology via Vertigro Algae with Global Green, and |
|--------|------|----------------------------------------------------------------------------------------------------|

|   | (iii) | the development and marketing of the Tomorrow GardenTM consumer retail product in our UK based subsidiary. |
|--------|-------|------------------------------------------------------------------------------------------------------------|

----

|   | (i) | a master license agreement for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to three unrelated and proprietary potential consumer retail products that had previously been developed (the “Pagic Master License”), certain of which are patent pending by Pagic, including the Nova Skin Care System, the Dust WolfTM,and the Tomorrow GardenTM Kit (collectively, and together with any improvements thereon, the “Initial Products”); |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the Pagic Master License also included a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any ancillary products developed and sold for use by consumers in connection with the Initial Products (the “Initial Ancillaries”); |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | a product development agreement pursuant to which we were granted a right for an initial period of five years to acquire a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any new products developed by Pagic (any such products, collectively, the “Additional Products”, and, the agreement itself, the“Pagic Product Development Agreement”); |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the Pagic Product Development Agreement also included a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any ancillary products developed and sold for use by consumers in connection with the Additional Products (the “Additional Ancillaries”); and |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | a related services agreement pursuant to which Pagic shall provide consulting support in connection with the Initial Products, the Initial Ancillaries, the Additional Products and the Additional Ancillaries (the “Pagic Consulting Agreement”), in exchange for the following: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1) | 1,111,112 shares of our common stock which have been issued; |
|--------|----|--------------------------------------------------------------|

|   | 2) | a one-time US$125,000 license fee (paid); |
|--------|----|-------------------------------------------|

|   | 3) | reimbursement for US$125,000 in development costs associated with each of the Initial Products since March 17, 2005 (paid); |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------|

|   | 4) | consulting fees of US$156,000 per year, payable monthly in advance, which the Company has paid to date; and |
|--------|----|-------------------------------------------------------------------------------------------------------------|

|   | 5) | the greater of the following, payable annually beginning in the second license year (beginning April 1, 2007): |
|--------|----|----------------------------------------------------------------------------------------------------------------|

|   | Ø | US$10.00 US  per Nova Skin Care System unit sold; |
|--------|--------|-------------------------------------------------------------|

|   | Ø | US$2.00 per Dust WolfTM unit sold; |
|--------|--------|------------------------------------|

|   | Ø | 4.5% of annual net sales of the Tomorrow GardenTM Kit; and |
|--------|--------|------------------------------------------------------------|

|   | Ø | 3% of annual net sales of Initial Ancillaries. |
|--------|--------|------------------------------------------------|

|   | 6) | a one-time $50,000 US license fee for each Additional Product licensed (except for one pre-identified product); and |
|--------|----|---------------------------------------------------------------------------------------------------------------------|

----

|   | 7) | subject to a minimum amount of US$50,000 per year commencing with the second year of each corresponding license, continuing royalties of 4.5% of annual net sales and 3% on annual net sales of any Additional Ancillaries. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|         | · | Greenfuel Technologies Corporation         |
|--------------|--------|--------------------------------------------|
|    | · | Aquaflow Bionomic Corporation              |
|    | · | LiveFuels Inc.                             |
|    | · | Green Star Products, Inc.                  |
|    | · | Solazyme, Inc.                             |
|    | · | Aurora BioFuels, Inc.                      |
|    | · | Seambiotic Ltd.                            |
|    | · | Royal Dutch Shell and HR Biopetroleum      |
|         | · | PetroSun Inc.                              |
|    | · | International Energy, Inc.                 |
|    | · | AlgoDyne                                   |
|    | · | Circle Biodiesel & Ethanol Corporation |

----

|   | · | Produces up to 20 times the normal production volume for field crops |
|--------|--------|----------------------------------------------------------------------|

|   | · | Requires approximately 5% of the normal water requirements for field crops |
|--------|--------|----------------------------------------------------------------------------|

|   | · | Can be built on non arable lands and close to major city markets |
|--------|--------|------------------------------------------------------------------|

|   | · | Can work in a variety of environments: urban, suburban, countryside, etc. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | Minimizes or eliminates the need for herbicides and insecticides |
|--------|--------|------------------------------------------------------------------|

|   | · | Will have very significant operating and capital cost savings over field agriculture |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Will drastically reduce transportation costs to market, resulting in further savings, higher quality and fresher foods on delivery and less transportation pollution |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Is modular and easily scalable from small to very large food production situations |
|--------|--------|------------------------------------------------------------------------------------|

|         | · | reduced global transport costs and associated carbon emissions |
|--------------|--------|----------------------------------------------------------------|
|    | · | food and fuel safety, security and sovereignty                 |
|         | · | local food is better for public health                         |
|    | · | building local economies                                       |
|    | · | control of externalities and true costs                        |

----

----

|   | · | a micropropagated plantlet |
|--------|--------|----------------------------|

|   | · | a membrane which enables the plants to grow and stay fresh for 3-6 months in normal light without the need for watering |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | a reusable biome |
|--------|--------|------------------|

|   | · | a coir growing pot and compost |
|--------|--------|--------------------------------|

|   | · | an information leaflet |
|--------|--------|------------------------|

----

|   | • | HerbKits.com – Indoor Herb Gardening Kits; and |
|--------|---------|------------------------------------------------------|
|   | • | New England Herb Company.                            |

|   | • | brand name recognition;                                                                                                                  |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | availability of financial resources;                                                                                                     |
|   | • | the quality of products;                                                                                                                 |
|   | • | reviews received for products from independent reviewers who publish in magazines, websites, newspapers and other industry publications; |
|   | • | availability of access to retail shelf space;                                                                                            |
|   | • | the price of each product; and                                                                                                           |
|   | • | the number of products then available.                                                                                                   |

----

| Division                                  | PatentsGranted                         | U.S. PatentApplications | Foreign PatentApplications |
|-------------------------------------------|----------------------------------------|-------------------------|----------------------------|
|  High Density Vertical Bio-Reactor   |  0                                |  2                 |  15                   |
|  High Density Vertical Growth System |  3 utility patents1 design patent |   3           |   5              |
|  Subtotal                            |  4                                |  5                 |  20                   |

----

|                                                            |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Net Operating Revenues                                          |   | $      | 0          |   |   |   | 0          |   |   |   | 0 |   |
| Loss  from operations                                 |   | $      | 15,337,285 |   |   |   | 12,028,222 |   |   |   | 8,171,090 |   |
| Loss from development stage                                     |   | $      | 17,855,490 |   |   |   | 12,712,358 |   |   |   | 8,138,393 |   |
| Net  loss per Canadian GAAP                           |   | $      | 17,855,490 |   |   |   | 12,712,358 |   |   |   | 8,138,393 |   |
| Loss per share                                                  |   | $      | 6.43       |   |   |   | 6.44       |   |   |   | 7.60 |   |
|                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Share capital                                                   |   | $      | 21,957,516 |   |   |   | 16,691,282 |   |   |   | 8,196,982 |   |
| Common shares issued                                            |   |   | 3,008,977  |   |   |   | 2,459,636  |   |   |   | 1,703,670 |   |
| Weighted average shares outstanding                             |   |   | 2,782,284  |   |   |   | 1,974,763  |   |   |   | 1,070,066 |   |
| Total Assets                                                    |   | $      | 2,351,963  |   |   |   | 4,605,914  |   |   |   | 4,142,485 |   |
| Total Liabilities                                               |   | $      | 3,383,189  |   |   |   | 8,615,386  |   |   |   | 4,166,861 |   |
|                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash Dividends Declared per Common Shares                       |   | $      | 0          |   |   |   | 0          |   |   |   | 0 |   |
|                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Exchange Rates (CDN $ to 1 US $) yearly average                 |   | $      | 0.88839    |   |   |   | 0.97084    |   |   |   | 0.87896 |   |
|                                                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Exchange Rates (CDN $ to 1 British Pound £) yearly average |   | $      | 0.52433    |   |   |   | 0.48368    |   |   |   | n/a |   |

|   | (i) | the development and commercialization of our VerticropTM HDVG System  designed to produce vegetables and other plant crops, |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the development of a commercial algae growing technology via Vertigro Algae with Global Green Solutions, Inc., and |
|--------|------|--------------------------------------------------------------------------------------------------------------------|

|   | (iii) | the development and marketing of the Tomorrow GardenTM consumer retail product by Valcent EU. |
|--------|-------|-----------------------------------------------------------------------------------------------|

----

|   | (i) | the development of a commercial algae growing technology via a joint venture with Global Green, |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (ii) | the development of our VerticropTM HDVG System designed to more efficiently produce certain plant crops, |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | (iii) | the development and test marketing of the Tomorrow Garden TM consumer retail product by Valcent EU, |
|--------|-------|-----------------------------------------------------------------------------------------------------|

|   | (iv) | the development of product inventories and direct test and sales initiatives and product introduction promotion relating to our Nova Skin Care System, and |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | ongoing research and development with tissue culture technologies, plant growth stimulation technologies, and other product and technology development initiatives. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                               |   | US $      |      |   | CDN $     |   |
|------------------------------------|--------|-----------|-----------|--------|-----------|--------|
|                               |   | Balance   |      |   | 2009      |   |   | 2009 |   |   | 2009 |   |   | 2009 |   |   | Balance |   |   | Balance |   |
|                               |   | March 31, |      |   | Issued    |   |   | Equity |   |   | Interest/ |   |   | Conversions/Conversions/ |   |   | March 31, |   |   | March 31, |   |
| Date of Issue                      |   | 2008      |      |   | Principal |   |   | Portion |   |   | Penalty |   |   | Repayments* |   |   | 2009 |   |   | 2009 |   |
|                               |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July/August 2005 (Note 10(a)) |   | $         | 259,825   |   |      | $      | 0 |   |   | $ | 0 |   |   | $ | 15,647 |   |   | $ | (275,472 | ) |   | $ | 0 |   |   | $ | 0 |   |
| April 2006 (Note 10(b))            |   |      | 534,442   |   |      |   | 0 |   |   |   | 0 |   |   |   | 29,287 |   |   |   | (563,729 | ) |   |   | 0 |   |   |   | 0 |   |
| April 2006 (Note 10(c))            |   |      | 85,542    |   |      |   | 0 |   |   |   | 0 |   |   |   | 4,673 |   |   |   | (90,215 | ) |   |   | 0 |   |   |   | 0 |   |
| December 2006 (Note 10(e))    |   |      | 1,659,782 |   |      |   | 0 |   |   |   | 0 |   |   |   | 150,544 |   |   |   | (1,810,326 | ) |   |   | 0 |   |   |   | 0 |   |
| January 2007 (Note 10(f))          |   |      | 1,569,183 |   |      |   | 0 |   |   |   | 0 |   |   |   | 468,170 |   |   |   | (2,037,353 | ) |   |   | 0 |   |   |   | 0 |   |
| August 2007 (Note 10(g))           |   |      | 678,567   |   |      |   | 0 |   |   |   | 0 |   |   |   | 102,260 |   |   |   | (780,827 | ) |   |   | 0 |   |   |   | 0 |   |
| September 2007 (Note 10(h))   |   |      | 297,433   |   |      |   | 0 |   |   |   | 0 |   |   |   | 154,295 |   |   |   | (442,826 | ) |   |   | 8,902 |   |   |   | 11,228 |   |
| July 2008 (Note 10(i))             |   |      | 0         |   |      |   | 2,168,000 |   |   |   | (1,315,003 | ) |   |   | 1,262,529 |   |   |   | (2,115,526 | ) |   |   | 0 |   |   |   | 0 |   |
|                               |   | $         | 5,084,774 |   |      | $      | 2,168,000 |   |   | $ | (1,315,003 | ) |   | $ | 2,187,405 |   |   | $ | (8,116,274 | ) |   | $ | 8,902 |   |   | $ | 11,228 |   |

|           |   | US $      |      |   | CDN $     |   |
|----------------|--------|-----------|-----------|--------|-----------|--------|
|           |   | Balance   |      |   | 2008      |   |   | 2008 |   |   | 2008 |   |   | 2008 |   |   | Balance |   |   | Balance |   |
|           |   | March 31, |      |   | Issued    |   |   | Equity |   |   | Interest/ |   |   |   |   |   | March 31, |   |   | March 31, |   |
| Date of Issue  |   | 2007      |      |   | Principal |   |   | Portion |   |   | Penalty |   |   | Conversions |   |   | 2008 |   |   | 2008 |   |
|           |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| August 2005    |   | $         | 316,957   |   |      | $      | 0 |   |   | $ | 0 |   |   | $ | 22,389 |   |   | $ | (79,521 | ) |   | $ | 259,825 |   |   | $ | 265,583 |   |
| April 2006     |   |      | 495,607   |   |      |   | 0 |   |   |   | 0 |   |   |   | 38,835 |   |   |   | 0 |   |   |   | 534,442 |   |   |   | 546,841 |   |
| April 2006     |   |      | 79,115    |   |      |   | 0 |   |   |   | 0 |   |   |   | 6,427 |   |   |   | 0 |   |   |   | 85,542 |   |   |   | 87,527 |   |
| December 2006  |   |      | 670,486   |   |      |   | 0 |   |   |   | 0 |   |   |   | 989,296 |   |   |   | 0 |   |   |   | 1,659,782 |   |   |   | 1,698,289 |   |
| January 2007   |   |      | 813,084   |   |      |   | 0 |   |   |   | 0 |   |   |   | 967,767 |   |   |   | (211,668 | ) |   |   | 1,569,183 |   |   |   | 1,605,558 |   |
| August 2007    |   |      | 0         |   |      |   | 650,000 |   |   |   | (230,007 | ) |   |   | 258,574 |   |   |   | 0 |   |   |   | 678,567 |   |   |   | 694,310 |   |
| September 2007 |   |      | 0         |   |      |   | 391,000 |   |   |   | (213,249 | ) |   |   | 119,682 |   |   |   | 0 |   |   |   | 297,433 |   |   |   | 304,633 |   |
|           |   | $         | 2,375,249 |   |      | $      | 1,041,000 |   |   | $ | (443,256 | ) |   | $ | 2,402,970 |   |   | $ | (291,189 | ) |   | $ | 5,084,774 |   |   | $ | 5,202,741 |   |

----

| (i) | 70% of the average of the five lowest closing bid prices for the common stock for the ten trading days prior to conversion; or |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| (ii) | US$9.90. The convertible notes carry a redemption feature, which allows the Company to retire them, in whole or in part, for an amount equal to 130% of that portion of the face amount being redeemed, but only in the event that the common shares have a closing price of US$27.00 per share for at least twenty consecutive trading days and there has otherwise been no default. The common stock purchase warrants carry aCashless Conversion Feature. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | · | Issuing a new promissory note with a face value of US$1,323,000 that accrues interest at 12% and is repayable by the Company anytime until maturity on December 31, 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | settled the non-cash portions of the convertible note  including US$524,884 in prepayment penalty, US$260,160 in original issuer discounts and US$371,771 in interest which includes the interest payable on the new note through December 31, 2009 for an aggregate settlement of US$1,156,815 and agreed to issue 2,892,036 common shares that will be restricted from trading and pooled until January 1, 2010; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Repayment of US$400,000 (cash paid May 11, 2009); and |
|--------|--------|-------------------------------------------------------|

|   | · | Conversion of US$250,000 face value of the original note into 312,500 common shares of the Company. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

----

|   | (a) | On April 1, 2009 through June 22, 2009, the Company received subscriptions to a 10% convertible promissory note in the aggregate of US$176,240. The note and accrued interest have been converted into units at the rate of US$0.40 per unit.  Each unit consists of one restricted common share and one share purchase warrant to purchase an additional restricted common share at an exercise price of US$0.60 pershare for a two year term. On July 17, 2009, the Company issued 458,139 common shares pursuant to the conversion of US$179,478 in convertible notes and accrued interest of US$3,777, and also issued 458,139 warrants to purchase 458,139 common shares at an exercise price of US$0.60 per share until July 17, 2011. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | On May 9, 2009, the Company completed a series of debt settlements that settled $10,806,780 in aggregate debt as at March 31, 2009 by issuing 29,516,951 post reverse consolidation shares. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | On May 9, 2009, the Company issued 312,500 common shares at US$0.80 per share pursuant to secured convertible note principal conversions received in the amount of US$250,000. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | On May 22, 2009, the Company received a subscription to a 10% convertible promissory note in the amount of US$1,500,000 from a single subscriber to complete a staged financing by a single subscriber.  The note and accrued interest is convertible into units of equity at the rate of US$0.125 per post consolidated unit.  Each unit is comprised of one restricted common share and one share purchasewarrant to purchase an additional restricted common share at US$0.45 per post reverse consolidated share for a one year term from the date of conversion.  The warrants may be exercised on a cashless basis.  On July 17, 2009, the Company issued 16,303,562 common shares and 5,434,521 warrants to purchase an additional restricted common share at US$0.45 for a one year term from the date of issue pursuant to conversion of the US$1,500,000 and a further US$500,000 received during the year endedMarch 31, 2009 together with accrued interest of US$37,945. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | On May 29, 2009, retroactive to April 1, 2009, the Company executed an agreement to acquire all ownership rights and intellectual property relating to its VertiCropTM vertical plant growing technology and Tomorrow GardenTM plant kit technology, all previously obtained under master license arrangements with Pagic LP, a company controlled by the Company’s past President.  The conditional salesagreement between the Company, Glen Kertz, Pagic LP, and West Peak Ventures of Canada Ltd., provides full ownership of all patents rights, know how, trademarks, research and development, improvements, test and development data, and all other intellectual property rights for VertiCropTM and Tomorrow GardenTM technologies (the “Technologies”). The agreement terminates the previous master license agreements between Valcent and Pagic LP, and replaces all financial obligations the Company hadunder that agreement including annual payments, royalty burden, and all other associated licensing costs.  The Company agreed to pay a total of US$2,000,000 plus issue 3% of its common stock on conclusion of the agreement. The US$2,000,000 is payable on a cumulative basis plus the greater of 3% of the gross monthly product sales less returns from exploitation of the Technologies or US$12,000 per month until US$2,000,000 has been paid.  The Company has up to 10 years to make the total payment,with the ownership of the Technologies remaining in escrow until fully paid or Company defaults in making payments, with the Technologies reverting back to Glen Kertz and Pagic LP.  The Company paid $153,295 since execution of the agreement. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | On July 16, 2009, the Company effected a reverse share consolidation of its common shares on a one new share for eighteen old shares basis. The Company’s trading symbol changed to VCTZF on this date and its CUSIP number changed to 918881202. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | On July 31, 2009, the Company issued an aggregate of 75,000 common shares valued at US$43,500 pursuant to obligations under a public relations agreement and an internet based services agreement. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   | • | The availability of adequate financing;                                                                                                               |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Our ability to develop an organizational infrastructure and effective management systems;                                                             |
|   | • | The success of our advertising and marketing plans;                                                                                                   |
|   | • | Market acceptance and general consumer demand for our products;                                                                                       |
|   | • | The performance of our products;                                                                                                                      |
|   | • | Our ability to effectively distribute our products;                                                                                                   |
|   | • | The introduction of products that compete with our own;                                                                                               |
|   | • | The adoption of new disclosure and/or corporate governance requirements associated with the maintenance of our status as a publicly reporting issuer; |
|   | • | Potential lawsuits involving our products or other matters; and                                                                                       |
|   | • | General business and economic conditions;                                                                                                             |
|   | • | Currency valuation fluctuations                                                                                                                       |

| Year                    |   | Amount |       |
|-------------------------|--------|--------|------------|
| 2007                    |   | $      | 1,562,421  |   |
| 2008                    |   |   | 4,081,435  |   |
| 2009                    |   |   | 8,238,999  |   |
| Total    |   | $      | 13,882,855 |   |

----

| 2010       |   | $      | 96,081  |   |
|------------|--------|--------|---------|--------|
| 2011       |   |   | 96,081  |   |
| 2012       |   |   | 96,081  |   |
| 2013       |   |   | 96,081  |   |
| 2014       |   |   | 96,081  |   |
| Thereafter |   |   | 348,295 |   |
|       |   | $      | 828,700 |   |

| Name                 |   | Age    |   | Position                                                                                               |
|----------------------|--------|--------|--------|--------------------------------------------------------------------------------------------------------|
|                 |   |
| M. Glen Kertz (1)    |   | 56     |   | Former Chief Executive Officer, President, Chairman of the Board and Directors(resigned April 9, 2009) |
|                 |   |   |   |                                                                                                   |
| F. George Orr (2)(3) |   | 48     |   | Chief Financial Officer, Secretary and Director                                                        |
|                 |   |   |   |                                                                                                   |
| Gerry Jardine        |   | 58     |   | Director                                                                                               |
|                 |   |   |   |                                                                                                   |
| Naveen Aggarwal      |   | 51     |   | Director                                                                                               |
|                 |   |   |   |                                                                                                   |

| George Stapleton |   | 55 |   | Director |
|------------------|--------|----|--------|----------|

----

| (1)    | Appointed President, Chairman of the Board and a director by resolution of the board of directors, in accordance with Section 111 of the Business Corporations Act (Alberta), following the resignation of Douglas E. Ford as President and Secretary, on July 31, 2005. Appointed Chief Executive Officer by resolution of the board of directorsin accordance with Section 121 of the Business Corporations Act (Alberta), and Section 6 of our bylaws on November 30, 2005. Resigned on April 9, 2009.                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (2)    | Appointed director by resolution of the board of directors, in accordance with Section 111 of the Business Corporations Act (Alberta), following the resignation of Larry F. Robb and Malcolm E. Rogers Jr., on July 23, 2005.                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3)    | Appointed Secretary by resolution of the board of directors, in accordance with Section 111 of the Business Corporations Act (Alberta), following the resignation of Douglas E. Ford as acting President and Secretary, on July 31, 2005. Appointed Chief Financial Officer by resolution of the board of directors in accordance with Section 121of the Business Corporations Act (Alberta), and Section 6 of our bylaws on November 30, 2005. As of April 9, 2009, Mr. Orr began serving as our acting Chief Executive Officer. |

----

|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |
|-----------------------------------------------------|--------|---------------------|---------|--------|------------------------|---------|---------|-----------------------------|--------|--------|--------------------------------------|--------|
|                                                |   | Annual Compensation |    |   | Long Term Compensation |    |
|                                                |   |                |    |   |                   |    |
| Name and Principal Position                         |   | Salary              |    |   | Bonus/Fees             |    |    | AwardsRestrictedStockAwards |   |   | SecuritiesUnderlyingOptions/SARs (#) |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |
| M. Glen Kertz (1)Former CEO, President and Director |   |                | — |   |                   | $       | 301,948 |                        |   |   | 16,667                               |   |   |   | — |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |   |   |   |   |
| F. George Orr (2)CFO, acting CEO, and Director      |   |                | — |   |                   | $       | 36,000  |                        |   |   | —                              |   |   |   | — |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |   |   |   |   |
| Gerry Jardine (3)Director                           |   |                | — |   |                   | $       | 108,675 |                        |   |   | —                              |   |   |   | — |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |   |   |   |   |
| Naveen Aggarwal (4)Director                         |   |                | — |   |                   | $  | 93,746  |                        |   |   | —                              |   |   |   | — |   |
|                                                |   |                |    |   |                   |    |    |                        |   |   |                                 |   |   |   |   |   |
| George Stapleton (5)Director                        |   |                | — |   |                   |    | — |                        |   |   | —                              |   |   |   | — |   |

| (1)    | During the year ended March 31, 2008, Pagic LP, a company affiliated with Glen Kertz, was paid or accrued amounts as shown for product development, expenditures inclusive of service related fees and royalties under various license agreements between the Company and Pagic LP. In addition, a further 16,667 common shares were agreed to beissued under the Technology License Agreement dated May 5, 2008 between Pagic LP, West Peak Ventures of Canada Ltd., and the Company. These shares were issued during the year ended March 31, 2009. In addition, additional accrued amounts due as at March 31, 2009 in the amount of US$156,519 were settled on March 29, 2009 for 391,298 common shares to Pagic, with such shares issued on May 11, 2009. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    | Accrued amounts due as at March 31, 2009 for fees, interest, convertible debenture prepayment penalty, original issuer discount on convertible notes, debt advances and promissory notes paid to the Company, and other amounts due aggregating US$336,586 were settled on March 29, 2009 for 1,085,690 common shares to Mr. Orr, with such sharesissued on May 11, 2009.                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (3)    | Mr. Gerry Jardine received amounts owing for consulting services to a related company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)    | Mr. Naveen Aggarwal received amounts for consulting services performed. Partial amounts accrued due as at March 31, 2009 in the amount of $23,428 were settled on March 29, 2009 for 46,875 common shares, with such shares issued on May 11, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (5)    | Amounts owing to Mr. Stapleton from a convertible note and interest due as at March 31, 2009 in the amount of US$73,544 were settled on March 29, 2009 for 183,860 common shares, with such shares issued on May 11, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

Board of Director Committees

| Name                                              |   | Amount andNature of Ownership |      |   | Percent of Class* |   |
|---------------------------------------------------|--------|-------------------------------|-----------|--------|-------------------|--------|
|                                              |   |                          |      |   |              |   |
| M. Glen Kertz (1) (resigned April 7, 2009)        |   |                          | 603,636   |   |              |   | 1.22 | % |
|                                              |   |                          |      |   |              |   |   |   |
| F. George Orr (2)                                 |   |                          | 1,222,480 |   |              |   | 2.46 | % |
|                                              |   |                          |      |   |              |   |   |   |
| Gerry Jardine (3)                                 |   |                          | 136       |   |              |   | ** | % |
|                                              |   |                          |      |   |              |   |   |   |
| Naveen Aggarwal (4)                               |   |                          | 85,763    |   |              |   | ** | % |
|                                              |   |                          |      |   |              |   |   |   |
| George Stapleton (5)                              |   |                          | 205,356   |   |              |   | ** | % |
|                                              |   |                          |      |   |              |   |   |   |
| All officers and directors as a group (5 persons) |   |                          | 2,117,371 |   |              |   | 4.26 | % |

----

| *      | No director or executive officer has different voting rights from any other holder of our common stock. Based on 49,675,133 shares issued and outstanding at September 30, 2009. Includes derivative instruments of holder in numerator and denominator of “Percent” calculation.                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **     | Beneficially owns less than one percent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (1)    | Consists of shares of common stock beneficially owned through Pagic LP, previously MK Enterprises LLC. Voting and/or investment power over all of these securities is held by M. Glen Kertz as to (i) 16,666 shares of common stock issued pursuant to the VerticropTM technologylicense agreement, (ii) 391,298 common shares issued on May 19, 2009 from debt settlements for amounts owed at March 31, 2009, and (iii) 195,672 common shares acquired with reference to the July 29, 2005 technology licensing agreement for Nova Skin Care System, Dust Wolf, and Tomorrow Garden technologies.                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (2)    | Consists of (i) 58,797 shares of common stock directly owned, (ii) 43,234 shares of common stock beneficially owned through this director’s spouse, (iii) 668 shares of common stock and 3,344 warrants exercisable at US$13.50 per share until December 18, 2009 issued pursuant to private placement of units at US$10.80 per share alldirectly owned, (iv) 1,085,690 shares issued on May 19, 2009 from debt settlements for amounts owed at March 31, 2009, and (v) 20,497 warrants exercisable at US$0.40 until July 21, 2013, and 10,248 warrants exercisable at US$0.40 until July 21, 2013. Share options previously issued were cancelled effective March 31, 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (3)    | Share options previously issued were cancelled effective March 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (4)    | Consists of (i) 38,888 shares of common stock beneficially owned through this director’s spouse, and (ii) 46,875 shares issued on May 19, 2009 from debt settlements for certain partial amounts owed at March 31, 2009. Share options previously issued were cancelled effective March 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (5)    | Consists of (i) 16,666 shares of common stock issued pursuant to private placement of units at US$10.80 per unit in a private company affiliated with this director; corresponding warrants to this private placement have expired, (ii) 183,860 shares issued on May 19, 2009 from debt settlements for certain partial amounts owed at March 31,2009, and (iii) 4,830 trading shares purchased in market transactions. Share options previously issued were cancelled effective March 31, 2009.                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

  

|                                                 |   | Shares Beneficially Owned |
|------------------------------------------------------|--------|---------------------------|
|                                                 |   |                      |
| Major Shareholders                                   |   | Number                    |   |   | Percent* |
|                                                 |   |                      |   |   |   |
| Larry Thompson (1)                                   |   |                      | 21,988,080 |   |   |   | 39.84 | % |
|                                                 |   |                      |   |   |   |   |   |   |
| Agosto Corporation Limited (2)                       |   |                      | 9,726,245 |   |   |   | 19.58 | % |
|                                                 |   |                      |   |   |   |   |   |   |
| West Peak Ventures of Canada Limited (3)             |   |                      | 4,738,869 |   |   |   | 9.54 | % |
|                                                 |   |                      |   |   |   |   |   |   |
| Woodburn Holdings Ltd (4)                            |   |                      | 3,639,829 |   |   |   | 7.31 | % |
|                                                 |   |                      |   |   |   |   |   |   |
|  Platinum Long Term Growth VI, LLC (5)          |   |                      | 3,503,090 |   |   |   | 7.01 | % |
|                                                 |   |                      |   |   |   |   |   |   |
| Inspeck Crushing Ltd. (6)                            |   |                      | 2,948,982 |   |   |   | 5.94 | % |
|                                                 |   |                      |   |   |   |   |   |   |
| Total                                                |   |                      | 46,545,095 |   |   |   | 83.73 | % |
|                                                 |   |                      |   |   |   |   |   |   |
|  Total Shares outstanding at September 30, 2009 |   |                      | 49,675,133 |   |   |   |   |   |

| (1)    | Consists of (i) 16,470,227 shares of common stock directly owned, (ii) 13,889 warrants to purchase 13,889 common shares at US$13.50 per share until December 18, 2009, (iii) 69,444 warrants to purchase 69,444 common shares at US$13.50 per share until May 1, 2010, and (iv) 5,434,521 warrants to purchase 5,434,521 common shares at US$0.45until July 17, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (2)    | Consists of (i) 4,863,123 shares held by Dr. Murphy, (ii) 4,752,011 shares held by Agosto Corporation, and (iii) 111,111 shares held by EXOMS Ltd.  J. Gordon Murphy is the sole shareholder and a control person of both Agosto Corporation and EXOMS and therefore for the purposes of Rule 13d-3 Dr. Murphy may be deemed the beneficialowner of the shares beneficially held by Agosto Corporation and EXOMS. 4,602,012 shares of common stock beneficially owned by Agosto were acquired in May 2009 upon the settlement of certain debt owed to Agosto by Valcent Products Inc.  These shares of common stock are subject to a lock-up agreement which prohibits their disposition until January 1, 2010 and thereafter permits Agosto to dispose of up to 25% of these shares in each calendar quarter of 2010.  After December 31, 2010 there areno contractual restrictions on Agosto’s ability to dispose of the shares. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (3)    | Consists of (i) 2,178,184 common shares held by West Peak Ventures of Canada Ltd., a company that Mr. Tim Brock controls, (ii) and 2,560,685 common shares held in the name of Tim Brock. Timothy Brock is the sole shareholder and a control person of West Peak Ventures of Canada Ltd.  These shares were acquired in May 2009 uponthe settlement of certain debts owed to West Peak Ventures of Canada Ltd. and Timothy Brock by Valcent Products Inc.  2,738,869 of these shares of common stock are subject to a lock-up agreement which prohibits their disposition until January 1, 2010 and thereafter permits to dispose of up to 25% of these shares in each calendar quarter of 2010.  After December 31, 2010 there are no contractual restrictions on West Peak Ventures of Canada Ltd.’s and Timothy Brock’s ability to disposeof the shares.                                                                 |

| (4)    | Consists of (i) 3,543,533 common shares, (ii) 48,148 warrants to purchase 48,148 common shares at US$9.00 until December 31, 2009, and (iii) 48,148 warrants to purchase 48,148 common shares at US$18.00 until December 31, 2009. 3,543,533 shares of common stock beneficially owned by Woodburn Holdings Ltd. were acquired in May 2009 uponthe settlement of certain debt owed to Woodburn Holdings Ltd. by Valcent Products Inc.  These shares of common stock are subject to a lock-up agreement which prohibits their disposition until January 1, 2010 and thereafter permits Woodburn Holdings Ltd. to dispose of up to 25% of these shares in each calendar quarter of 2010.  After December 31, 2010 there are no contractual restrictions on Woodburn Holdings Ltd.’s ability to dispose of the shares. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (5)    | Consists of (i) 3,201,130 shares of common stock directly acquired in debt settlements with the Company in May, 2009, (ii) 201,307 warrants to purchase 201,307 common shares until July 21, 2010 at US$0.40 per share, and (iii) 100,654 warrants to purchase 100,654 common shares until July 21, 2013 at US$0.40 per share.   Theseshares of common stock are subject to a lock-up agreement which prohibits their disposition until January 1, 2010.                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (6)    | Consists of (i) 2,948,982 shares of common stock directly acquired in debt settlements with the Company in May, 2009.   These shares of common stock are subject to a lock-up agreement which prohibits their disposition until January 1, 2010 and thereafter permits Inspeck Crushing Ltd. Ltd. to dispose of up to 25% of theseshares in each calendar quarter of 2010.  After December 31, 2010 there are no contractual restrictions on Inspeck Crushing Ltd.’s ability to dispose of the shares.                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

|                                                                             |   | 2009   |    |   | 2008   |   |      | 2007   |   |
|----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|-----------|--------|--------|
| (a)     Pagic                                                |   | $      | 0       |   |   | $      | 189,156   |   |   | $ | 0 |   |
| (b)     CFO                                                  |   |   | 19,105  |   |   |   | 158,370   |   |   |   | 43,500 |   |
| (c)     Consulting services and unsecured loan advances      |   |   | 32,938  |   |   |   | 73,896    |   |   |   | 57,364 |   |
| (d)     Consulting services and unsecured loan advances |   |   | 30,882  |   |   |   | 1,000,165 |   |   |   | 784,362 |   |
| (e)     Advertising                                          |   |   | 0       |   |   |   | 52,145    |   |   |   | 17,319 |   |
| (f)     Operational management consulting                    |   |   | 103,720 |   |   |   | 16,784    |   |   |   | 27,630 |   |
|                                                                             |   |   |    |   |   |   |      |   |   |   |   |   |
|                                                                             |   | $      | 186,645 |   |   | $      | 1,490,516 |   |   | $ | 930,175 |   |

|                                                                                                                                   |   | 2009   |      |   | 2008   |   |    | 2007   |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| (a)    Pagic, a company related by a past common officer and director for:                                         |   |   |      |   |   |   |    |   |   |
| (i)    Net charges for product development expenses including royalties                                            |   | $      | 301,948   |   |   | $      | 565,135 |   |   | $ | 269,455 |   |
| (ii)   Issued 16,667 shares related to technology purchase                                                              |   |   | 190,746   |   |   |   | 0       |   |   |   | 0 |   |
| (iii)  Commitment to issue 391,298 common shares for debt settlement                                                         |   |   | 195,570   |   |   |   | 0       |   |   |   | 0 |   |
|                                                                                                                                   |   |   |      |   |   |   |    |   |   |   |   |   |
| (b)    The Company’s Chief Financial Officer and director for:                                               |   |   |      |   |   |   |    |   |   |   |   |   |
| (i)    Charges for professional fees                                                                               |   |   | 36,000    |   |   |   | 35,370  |   |   |   | 33,000 |   |
| (ii)   Exchange of balances for 12% convertible note (Note 10(i))                                                       |   |   | 188,992   |   |   |   | 0       |   |   |   | 0 |   |
| (iii)  Net short-term advance, at 8-10% interest per annum                                                                   |   |   | 52,605    |   |   |   | 150,000 |   |   |   | 0 |   |
| (iv)  Original issuer discount, prepayment penalty and interest prepaid through December 31, 2009                            |   |   | 128,889   |   |   |   | 0       |   |   |   | 0 |   |
| (v)   Commitment to issue 1,085,690 common shares for debt settlement                                                   |   |   | 370,087   |   |   |   | 0       |   |   |   | 0 |   |
| (c)    Charges from private companies with CFO and director in common for:                                         |   |   |      |   |   |   |    |   |   |   |   |   |
| (i)    Office rent                                                                                                      |   |   | 37,800    |   |   |   | 30,000  |   |   |   | 7,500 |   |
| (ii)   Consulting fee                                                                                                        |   |   | 160,650   |   |   |   | 150,000 |   |   |   | 46,745 |   |
| (iii)  Unsecured loan advances                                                                                                    |   |   | 0         |   |   |   | 57,364  |   |   |   | 57,364 |   |
| (iv)  Commitment to issue 114,826 common shares                                                                                   |   |   | 57,364    |   |   |   | 0       |   |   |   | 0 |   |
| (d)   West Peak and its principal shareholder, a beneficial owner of more than 5% of the Company’s common shares: |   |   |      |   |   |   |    |   |   |   |   |   |
| (i)    Unsecured loan advances, at 8% interest per annum                                                                |   |   | 2,587,638 |   |   |   | 977,665 |   |   |   | 784,837 |   |
| (ii)   Consulting fees                                                                                                       |   |   | 653,290   |   |   |   | 52,500  |   |   |   | 0 |   |
| (iv)  Convertible notes purchased                                                                                                 |   |   | 85,460    |   |   |   | 162,305 |   |   |   | 0 |   |
| (v)   Exchange of amounts owed at March 31, 2009 for  future issuance of 4,722,204 common shares                   |   |   | 1,601,528 |   |   |   | 0       |   |   |   | 0 |   |
| (e)   Advertising services provided by a private company with a director in common                                      |   |   | 0         |   |   |   | 244,861 |   |   |   | 377,749 |   |
| (f)    A director for:                                                                                             |   |   |      |   |   |   |    |   |   |   |   |   |
| (i)    Operational management consulting and investor relations services                                                |   |   |      |   |   |   |    |   |   |   |   |   |
| (ii)   Commitment to issue 46,875 common shares                                                                         |   |   | 202,421   |   |   |   | 151,825 |   |   |   | 0 |   |
| (g)   Bonus of 5,555 restricted common shares to a retiring director                                                    |   |   |      |   |   |   |    |   |   |   |   |   |
| (h)   A director for:                                                                                                   |   |   | 0         |   |   |   | 52,889  |   |   |   | 0 |   |
| (i)     Loans received/repaid during the year with 10%  interest                                         |   |   | 99,390    |   |   |   | 0       |   |   |   | 0 |   |
| (ii)   Convertible notes purchased                                                                                           |   |   | 91,893    |   |   |   | 0       |   |   |   | 0 |   |
| (iii)  Commitment to issue 183,860 common shares                                                                                  |   |   | 191,293   |   |   |   | 0       |   |   |   | 0 |   |

----

|   | (i) | a master license agreement for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to three unrelated and proprietary potential consumer retail products that had previously been developed (the “Pagic Master License”), certain of which are patent pending by Pagic, including the Nova Skin Care System, the Dust WolfTM,and the Tomorrow GardenTM Kit (collectively, and together with any improvements thereon, the “Initial Products”); |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | the Pagic Master License also includes a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any ancillary products developed and sold for use by consumers in connection with the Initial Products (the “Initial Ancillaries”); |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | a product development agreement pursuant to which we were granted a right for an initial period of five years to acquire a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any new products developed by Pagic (any such products, collectively, the “Additional Products”, and, the agreement itself, the“Pagic Product Development Agreement”); |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | the Pagic Product Development Agreement also includes a license for a term continuing so long as royalty payments continue to be made as required for the exclusive worldwide marketing and distribution rights to any ancillary products developed and sold for use by consumers in connection with the Additional Products (the “Additional Ancillaries”); and |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | a related services agreement pursuant to which Pagic shall provide consulting support in connection with the Initial Products, the Initial Ancillaries, the Additional Products and the Additional Ancillaries (the “Pagic Consulting Agreement”), in exchange for the following: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 20,000,000 shares of our common stock which have been issued; |
|--------|--------|---------------------------------------------------------------|

|   | · | a one-time US$125,000 license fee (paid); |
|--------|--------|-------------------------------------------|

|   | · | reimbursement for US$125,000 in development costs associated with each of the Initial Products since March 17, 2005 (paid); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | consulting fees of US$156,000 per year, payable monthly in advance, which the Company has paid to date; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | the greater of the following, payable annually beginning in the second license year (beginning April 1, 2007): |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | Ø | US$10.00 US  per Nova Skin Care System unit sold; |
|--------|--------|-------------------------------------------------------------|

|   | Ø | US$2.00 per Dust WolfTM unit sold; |
|--------|--------|------------------------------------|

|   | Ø | 4.5% of annual net sales of the Tomorrow GardenTM Kit; and |
|--------|--------|------------------------------------------------------------|

|   | Ø | 3% of annual net sales of Initial Ancillaries. |
|--------|--------|------------------------------------------------|

|   | · | a one-time $50,000 US license fee for each Additional Product licensed (except for one pre-identified product); and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | subject to a minimum amount of US$50,000 per year commencing with the second year of each corresponding license, continuing royalties of 4.5% of annual net sales and 3% on annual net sales of any Additional Ancillaries. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   |  • | Effective April 1, 2009, the Company executed a new purchase agreement (the “Purchase Agreement”) to acquire all ownership rights and intellectual property relating to its VertiCrop vertical plant growing technology and Tomorrow Garden Kit technology (the “Technologies”) from Glen Kertz, Pagic and West Peak. Pursuantto the Purchase Agreement, the Company agreed to pay a total of US $2,000,000 plus issue 3% of its common shares on conclusion of the purchase agreement.  The US $2,000,000 is payable on a cumulative basis as to US $65,000 on signing (paid) plus the greater of 3% of the gross monthly product sales less returns from exploitation of the technologies or US $12,000 per month until US $2,000,000 has been paid.  The ownership of the Technologies will remain in escrow until fully paid or if the Companydefaults in making payments.  The issuance of 3% of its common shares is payable upon release of the Technologies from escrow to the Company.  The Company may at any time elect to pay out the remaining balance due.  Should the Company default under this agreement the Technologies will revert back to the vendors.  |
|--------|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  • | In conjunction with certain restructuring initiatives, effective March 27, 2009, the Company entered into a series of debt settlement agreements whereby it agreed to issue restricted common shares in settlement of convertible debentures, debenture related interest, original issuer discounts, prepayment penalties, future interest, certainaccounts payable and related party amounts owing, certain advances, unpaid finders’ fees and demand and term promissory notes.  An aggregate of US $10,806,780 representing these balances was settled in exchange for 29,516,951 common shares issued on May 11, 2009.  Included in these shares are 24,232,816 common shares which are subject to lock up restrictions with quarterly equal releases beginning on January 1, 2010, and a further 2,634,135 common shares are subject to lock up restrictionsuntil January 1, 2010.                                                                                                                                                                                                                                                                                                                                      |
|   |  • | On April 1, 2009 through June 22, 2009, the Company received subscriptions to a 10% convertible promissory note in the aggregate of US$176,240. The note and accrued interest have been converted into units at the rate of US$0.40 per unit.  Each unit consists of one restricted common share and one share purchase warrant to purchasean additional restricted common share at an exercise price of US$0.60 per share for a two year term from the date of conversion. On July 17, 2009, the Company issued 458,139 common shares pursuant to the conversion of US$179,478 in convertible notes and accrued interest of US$3,777, and also issued 458,139 warrants to purchase 458,139 common shares at an exercise price of US$0.60 per share until July 17, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |  • | On May 22, 2009, the Company received a subscription to a 10% convertible promissory note in the amount of US$1,500,000 from a single subscriber to complete a staged financing by a single subscriber.  The note and accrued interest is convertible into units of equity at the rate of US$0.125 per post consolidated unit on the date upon which the Company effects a reverse share consolidation onthe basis of 18 old shares for each 1 new share.  Each unit is comprised of one restricted common share and one share purchase warrant to purchase an additional restricted common share at US$0.45 per post reverse consolidated share for a one year term from the date of conversion.  The warrants may be exercised on a cashless basis.  On July 17, 2009, the Company issued 16,303,562 common shares and 5,434,521 warrants to purchase an additional restricted common share at US$0.45 fora one year term from the date of issue pursuant to conversion of the US$1,500,000 and a further US$500,000 received during the year ended March 31, 2009 together with accrued interest of US$37,945.                                                                                              |
|   |  • | On July 16, 2009, the Company effected a reverse share consolidation of its common shares on a one new share for eighteen old shares basis. The Company’s trading symbol changed to VCTZF on this date and its CUSIP number changed to 918881202.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

| Period                        |   | OTC Bulletin Board(USD) |                                                                   |
|-------------------------------|--------|-------------------------|------------------------------------------------------------------------|
|                          |   | High                    |                                                                   |   | Low |   |
|                          |   |                    |                                                                   |   |   |   |
| Fiscal year ended March 31,   |   |                    |                                                                   |   |   |   |
| 2005                          |   | $                       | 10.80                                                                  |   |   | $ | 0.54 |   |
| 2006                          |   | $                       | 17.10                                                                  |   |   | $ | 4.50 |   |
| 2007                          |   | $                       | 15.20                                                                  |   |   | $ | 7.20 |   |
| 2008                          |   | $                       | 16.74                                                                  |   |   | $ | 8.10 |   |
| 2009                          |   | $                       | 13.32                                                                  |   |   | $ | 0.90 |   |
|                          |   |                    |                                                                   |   |   |   |   |   |
| Quarter ended                 |   |                    |                                                                   |   |   |   |   |   |
| June 30, 2007                 |   | $                       |          12.06            |   |   | $ |            9.18 |   |
| September 30, 2007            |   | $                       |          13.86            |   |   | $ |            9.00 |   |
| December 31, 2007             |   | $                       |          16.74            |   |   | $ |            9.90 |   |
| March 31, 2008                |   | $                       |          16.20            |   |   | $ |            8.10 |   |
| June 30, 2008                 |   | $                       |          13.32            |   |   | $ |            9.00 |   |
| September 30, 2008            |   | $                       |          12.06            |   |   | $ |            6.12 |   |
| December 31, 2008             |   | $                       |            8.10 |   |   | $ |            3.60 |   |
| March 31, 2009                |   | $                       |            5.40 |   |   | $ |            0.90 |   |
| June 30, 2009                 |   | $                       | 2.34                                                                   |   |   | $ | 0.54 |   |
| Stock split 18 - 1 July 16-09 |   |                    |                                                                   |   |   |   |   |   |
| September 30, 2009            |   | $                       | 2.50                                                                   |   |   | $ | 0.02 |   |
|                          |   |                    |                                                                   |   |   |   |   |   |
| Month ended                   |   |                    |                                                                   |   |   |   |   |   |
| April 30, 2009                |   | $                       | 1.62                                                                   |   |   | $ | 0.450 |   |
| May 31, 2009                  |   | $                       | 2.16                                                                   |   |   | $ | 0.670 |   |
| June 30, 2009                 |   | $                       | 2.34                                                                   |   |   | $ | 0.550 |   |
| July 31, 2009                 |   | $                       | 0.80                                                                   |   |   | $ | 0.02 |   |
| Stock split 18 - 1 July 16-09 |   |                    |                                                                   |   |   |   |   |   |
| August 31, 2009               |   | $                       | 1.00                                                                   |   |   | $ | 0.50 |   |
| September 30, 2009            |   | $                       | 2.50                                                                   |   |   | $ | 1.00 |   |

----

----

----

----

----

|   | · | an individual citizen or resident of the United States; |
|--------|--------|---------------------------------------------------------|

|   | · | a corporation, or entity taxable as a corporation, that is created or organized under the laws of the United States or of any political subdivision thereof or the District of Columbia; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an estate whose income is taxable in the United States irrespective of source; or |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | a trust if: (a) a court within the United States is able to exercise primary supervision over the administration of the trust; and (b) one or more United States persons have the authority to control all substantial decisions of the trust. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | to the extent such distributions are paid out of our current or accumulated earnings and profits, as determined for United States federal income tax purposes, subject to any applicable foreign tax credit, and without a reduction for any Canadian income tax withheld from such distributions, such holders would generally be required to include, in their gross income for United States federal income tax purposes, anamount equal to the United States Dollar value of such distributions on the date of receipt (based on the exchange rate on such date). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to the extent such dividend distributions exceed our current or accumulated earnings and profits, as determined for United States federal income tax purposes, the amount of any distribution so received will:  (i) first be applied to reduce a U.S. Holder's adjusted basis in our common stock, and, as a return of basis, will not be subject to United States federal income tax; and (ii) thereafter, any residualamount of such distribution will be treated as a gain from the sale or exchange of our common stock, which amount is taxable as a capital gain. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Any taxable dividends received on shares of our common stock by a U.S. Holder who is an individual, a trust or an estate (an "Individual Holder") will be treated as qualified dividend income, which is subject to tax at preferential rates through December 31, 2010, provided that: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we are a qualified foreign corporation—one eligible for the benefits of a comprehensive income tax treaty with the United States, which the United States Treasury Department has determined to be satisfactory for this purpose and which includes an exchange of information program—for which purposes the Canada-US Income Tax Convention (1980) qualifies; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are, have been or anticipate that we will be); |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the Individual Holder has held the common stock for more than 60 days during the 121-day period beginning 60 days prior to the date on which the common stock become ex-dividend; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the Individual Holder is not obligated to make related payments with respect to positions in substantially similar or related property. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | a non-resident of Canada; |
|--------|--------|---------------------------|

|   | · | holds our common shares as capital property; |
|--------|--------|----------------------------------------------|

|   | · | deals with us at arm's length; and |
|--------|--------|------------------------------------|

|   | · | does not use or hold our common shares in or in the course of carrying on business in Canada. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

|   | · | to the extent such holder beneficially owns at least 10 percent of our voting stock, 5 percent of the gross amount of such distribution paid; or |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | to the extent such holder beneficially owns less than 10 percent of our voting stock, 15 percent of the gross amount of such distribution paid. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

| (i)  | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)  | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and our directors; and |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (1)  | Lack of an independent audit committee or audit committee financial expert, and no independent directors.  Although our audit committee functions with one officer/director and two other directors who are not corporate officers, the two non-officer directors are paid consultants to the Company and as such may not be deemed trulyindependent.  These factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management; |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)  | Inadequate staffing and supervision within our bookkeeping operations combined with complex accounting transactions. We have three employees or consultants involved in bookkeeping functions in three separate operating subsidiaries where transactional volumes require such services, and we utilize independent consultants on a part-timebasis to supplement our accounting staff.  The relatively small number of people who are responsible for bookkeeping functions makes more difficult segregation of duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews which may result in a failure to detect errors in spreadsheets, calculations,or assumptions used to compile the financial statements and related disclosures as filed with the SEC.  In addition complex transactions encountered in the year relating to convertible debentures, and revaluation issues in conjunction with re-structuring initiatives made the accounting function more complex requiring the services of third party outside accounting consultants; |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3)  | Outsourcing of significant portions of the accounting operations of our Company.  Because there are no employees at the corporate level in our administration, we have outsourced a portion of the accounting functions of our Company to an independent accounting firm where particular skills are required due to the nature of complexfinancial transactions especially relating to convertible debenture financings. The employees of this accounting firm are managed by supervisors within the accounting firm, and are not answerable to the Company's management. This is a material weakness because it could result in disconnect between the accounting policies adopted by our Board of Directors and the accounting practices applied by the accounting firm; |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4)  | Insufficient installation of information technology to assist in our accounting functions.  Because of a lack of working capital and personnel, we have been unable to upgrade our information technology software and hardware to assist in providing effective controls; |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5)  | Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.  A lack of country specific controls and written protocols leading to timely reporting of previously budgeted expenditures; |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6)  | Ineffective controls over period end financial disclosure and reporting processes; |
|--------|-----------|------------------------------------------------------------------------------------|

|   | (7)  | Infrequent ongoing monitoring and a lack of separate evaluations when an effective monitoring and evaluative system is deemed necessary for corporate integrity; |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Index                                                       | Page        |
|------------------------------------------------------------------|-------------|
|                                                             |        |
| Auditors' Report to the Shareholders              | F-2         |
|                                                             |        |
| Consolidated Financial Statements                                | F-3         |
|                                                             |        |
| Consolidated Balance Sheets                                 | F-3         |
|                                                             |        |
| Consolidated Statements of Operations and Deficit                | F-4         |
|                                                             |        |
| Consolidated Statements of Cash Flows        | F-5         |
|                                                             |        |
| Notes to the Consolidated Financial Statements    | F-6 to F-44 |

----

----

----

|                                                    |   | March 31,    |        |
|---------------------------------------------------------|--------|--------------|-------------|
|                                                    |   | 2009         |        |   | 2008 |   |
| ASSETS                                                  |   | (Note 10(i)) |        |
| Current                                                 |   |         |        |   |   |   |
| Cash and cash equivalents                               |   | $            | 224,769     |   |   | $ | 163,437 |   |
| Accounts receivable (Note 8)                            |   |         | 920,235     |   |   |   | 462,156 |   |
| Prepaid expenses (Note 7)                               |   |         | 102,670     |   |   |   | 2,119,546 |   |
| Inventories (Note 9)                                    |   |         | 34,072      |   |   |   | 617,195 |   |
|                                                    |   |         |        |   |   |   |   |   |
|                                                    |   |         | 1,281,746   |   |   |   | 3,362,334 |   |
| Restricted Cash (Note 13)                               |   |         | 0           |   |   |   | 108,471 |   |
| Property and Equipment (Notes 5 and 13)                 |   |         | 1,070,216   |   |   |   | 1,135,108 |   |
| Product License (Note 6)                                |   |         | 1           |   |   |   | 1 |   |
|                                                    |   |         |        |   |   |   |   |   |
|                                                    |   | $            | 2,351,963   |   |   | $ | 4,605,914 |   |
|                                                    |   |         |        |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY) |   |
|                                                    |   |         |        |   |   |   |   |   |
| Current                                                 |   |         |        |   |   |   |   |   |
| Accounts payable and accrued liabilities                |   | $            | 541,802     |   |   | $ | 536,563 |   |
| Current portion of long-term debt (Note 13)             |   |         | 0           |   |   |   | 16,250 |   |
| Promissory notes payable (Note 18)                      |   |         | 2,643,514   |   |   |   | 270,167 |   |
| Due to related parties (Note 11)                        |   |         | 186,645     |   |   |   | 1,490,516 |   |
| Convertible notes (Note 10)                             |   |         | 11,228      |   |   |   | 5,202,741 |   |
| Derivative liability (Note 10)                          |   |         | 0           |   |   |   | 940,537 |   |
|                                                    |   |         |        |   |   |   |   |   |
|                                                    |   |         | 3,383,189   |   |   |   | 8,456,774 |   |
| Long-term debt (Note 13)                                |   |         | 0           |   |   |   | 158,612 |   |
|                                                    |   |         | 3,383,189   |   |   |   | 8,615,386 |   |
| Shareholders' Equity (Deficiency)                       |   |         |        |   |   |   |   |   |
| Share capital (Notes 14 and 19)                         |   |         | 21,957,516  |   |   |   | 16,691,282 |   |
| Contributed surplus (Note 14(f))                        |   |         | 5,462,219   |   |   |   | 4,203,394 |   |
| Commitment to issue shares (Note 14(c))                 |   |         | 16,955,228  |   |   |   | 0 |   |
| Conversion component of convertible notes (Note 10)     |   |         | 4,310       |   |   |   | 2,650,861 |   |
| Accumulated deficit from prior operations               |   |         | (3,237,370  | ) |   |   | (3,237,370 | ) |
| Accumulated deficit during the development stage        |   |         | (42,173,129 | ) |   |   | (24,317,639 | ) |
|                                                    |   |         |        |   |   |   |   |   |
|                                                    |   |         | (1,031,226  | ) |   |   | (4,009,472 | ) |
|                                                    |   |         |        |   |   |   |   |   |
|                                                    |   | $            | 2,351,963   |   |   | $ | 4,605,914 |   |

----

----

|                                                  |   | For Years Ended March 31 |        |   | CumulativeDuring Development Stage(April 1, 2005 to March 31, 2009) |   |
|-------------------------------------------------------|--------|-------------------------------|-------------|--------|---------------------------------------------------------------------|--------|
|                                                  |   | 2009                          |        |   | 2008                                                                |   |   | 2007 |   |   |   |
| Expenses                                              |   |                          |        |   |                                                                |   |   |   |   |   |   |   |
| Product development costs (Note 16)                   |   | $                             | 8,238,999   |   |                                                                | $      | 4,081,435 |   |   | $ | 1,562,421 |   |   | $ | 14,568,287 |   |
| Interest, accretion and financing costs               |   |                          | 3,213,003   |   |                                                                |   | 2,916,958 |   |   |   | 2,732,977 |   |   |   | 10,687,777 |   |
| Loss on settlement of debts (Note 10(i))              |   |                          | 885,292     |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | 885,292 |   |
| Investor relations                                    |   |                          | 782,749     |   |                                                                |   | 871,542 |   |   |   | 287,834 |   |   |   | 1,961,162 |   |
| Professional fees                                     |   |                          | 524,216     |   |                                                                |   | 431,270 |   |   |   | 712,458 |   |   |   | 1,843,777 |   |
| Advertising and media development                     |   |                          | 448,258     |   |                                                                |   | 1,953,998 |   |   |   | 1,092,917 |   |   |   | 3,495,173 |   |
| Office and miscellaneous                              |   |                          | 389,128     |   |                                                                |   | 234,817 |   |   |   | 281,696 |   |   |   | 947,766 |   |
| Stock-based compensation                              |   |                          | 260,530     |   |                                                                |   | 990,305 |   |   |   | 1,127,141 |   |   |   | 2,911,640 |   |
| Travel                                                |   |                          | 236,441     |   |                                                                |   | 291,465 |   |   |   | 156,498 |   |   |   | 754,004 |   |
| Amortization                                          |   |                          | 181,618     |   |                                                                |   | 47,463 |   |   |   | 25,288 |   |   |   | 263,751 |   |
| Rent                                                  |   |                          | 131,038     |   |                                                                |   | 77,918 |   |   |   | 65,693 |   |   |   | 331,420 |   |
| Filing and transfer agent fees                        |   |                          | 22,150      |   |                                                                |   | 44,500 |   |   |   | 38,883 |   |   |   | 131,783 |   |
| Insurance                                             |   |                          | 19,640      |   |                                                                |   | 71,071 |   |   |   | 78,784 |   |   |   | 169,495 |   |
| Interest on long-term debt                            |   |                          | 4,223       |   |                                                                |   | 15,480 |   |   |   | 8,500 |   |   |   | 28,203 |   |
| Loss from Operations                                  |   |                          | 15,337,285  |   |                                                                |   | 12,028,222 |   |   |   | 8,171,090 |   |   |   | 38,979,530 |   |
| Other (Income) Expense                                |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Write-down of product license (Note 6)                |   |                          | 0           |   |                                                                |   | 1,306,074 |   |   |   | 0 |   |   |   | 1,306,074 |   |
| Interest income                                       |   |                          | (19,491     | )      |                                                                |   | (10,805 | ) |   |   | (25,704 | ) |   |   | (56,000 | ) |
| Write-down of property and equipment (Note 5)         |   |                          | 509,892     |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | 509,892 |   |
| Foreign exchange loss (gain)                          |   |                          | 2,027,804   |   |                                                                |   | (611,133 | ) |   |   | (6,993 | ) |   |   | 1,433,633 |   |
| Net Loss and Comprehensive Loss for Period            |   |                          | (17,855,490 | )      |                                                                |   | (12,712,358 | ) |   |   | (8,138,393 | ) |   |   | (42,173,129 | ) |
| Deficit During Development Stage, Beginning of Period |   |                          | (24,317,639 | )      |                                                                |   | (11,605,281 | ) |   |   | (3,466,888 | ) |   |   | 0 |   |
| Deficit During Development Stage, End of Period       |   | $                             | (42,173,129 | )      |                                                                | $      | (24,317,639 | ) |   | $ | (11,605,281 | ) |   | $ | (42,173,129 | ) |
| Loss Per Share - Basic and diluted                    |   | $                             | (6.43       | )      |                                                                | $      | (6.44 | ) |   | $ | (7.60 | ) |   |   |   |   |
| Weighted Average Number of Common Shares Outstanding  |   |                          | 2,782,284   |   |                                                                |   | 1,974,763 |   |   |   | 1,070,066 |   |   |   |   |   |

----

----

|                                                   |   | For Years Ended March 31 |        |   | CumulativeDuring Development Stage(April 1, 2005 to March 31, 2009) |   |
|--------------------------------------------------------|--------|-------------------------------|-------------|--------|---------------------------------------------------------------------|--------|
|                                                   |   | 2009                          |        |   | 2008                                                                |   |   | 2007 |   |   |   |
| Cash Provided By (Used In)                             |   |                          |        |   |                                                                |   |   |   |   |   |   |   |
| Operating Activities                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |
| Net loss for period                                    |   | $                             | (17,855,490 | )      |                                                                | $      | (12,712,358 | ) |   | $ | (8,138,393 | ) |   | $ | (42,173,129 | ) |
| Items not involving cash                               |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Interest, accretion and financing on convertible notes |   |                          | 3,031,746   |   |                                                                |   | 2,839,430 |   |   |   | 2,327,985 |   |   |   | 9,779,638 |   |
| Loss on settlement of debts                            |   |                          | 885,292     |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | 885,292 |   |
| Stock-based compensation                               |   |                          | 260,530     |   |                                                                |   | 990,305 |   |   |   | 1,127,141 |   |   |   | 2,911,640 |   |
| Write-down on property/product license                 |   |                          | 509,892     |   |                                                                |   | 1,306,074 |   |   |   | 0 |   |   |   | 1,815,966 |   |
| Common shares issued for product development           |   |                          | 190,747     |   |                                                                |   | 506,869 |   |   |   | 52,708 |   |   |   | 750,324 |   |
| Common shares issued for services                      |   |                          | 360,038     |   |                                                                |   | 398,397 |   |   |   | 174,924 |   |   |   | 933,359 |   |
| Commitment to issue shares for services                |   |                          | 764,257     |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | 764,257 |   |
| Extension of warrants                                  |   |                          | 181,048     |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | 181,048 |   |
| Shares issued for interest and penalties               |   |                          | 65,333      |   |                                                                |   | 4,195 |   |   |   | 0 |   |   |   | 69,528 |   |
| Amortization                                           |   |                          | 181,618     |   |                                                                |   | 47,463 |   |   |   | 25,288 |   |   |   | 263,751 |   |
| Foreign exchange loss (gain)                           |   |                          | 1,947,142   |   |                                                                |   | (630,984 | ) |   |   | 0 |   |   |   | 1,316,158 |   |
| Changes in non-cash working capital items              |   |                          | 2,255,630   |   |                                                                |   | 732,607 |   |   |   | (1,870,635 | ) |   |   | 1,371,309 |   |
|                                                   |   |                          | (7,222,217  | )      |                                                                |   | (6,518,002 | ) |   |   | (6,300,982 | ) |   |   | (21,130,859 | ) |
| Investing Activities                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Product license                                        |   |                          | 0           |   |                                                                |   | 0 |   |   |   | 0 |   |   |   | (306,075 | ) |
| Property and equipment                                 |   |                          | (626,618    | )      |                                                                |   | (834,084 | ) |   |   | (310,488 | ) |   |   | (1,843,899 | ) |
|                                                   |   |                          | (626,618    | )      |                                                                |   | (834,084 | ) |   |   | (310,488 | ) |   |   | (2,149,974 | ) |
|                                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Financing Activities                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Advances from related parties                          |   |                          | 1,473,880   |   |                                                                |   | 560,341 |   |   |   | 860,902 |   |   |   | 2,811,047 |   |
| Proceeds from issuance of common shares, net           |   |                          | 2,195,785   |   |                                                                |   | 5,448,774 |   |   |   | 1,028,266 |   |   |   | 8,672,825 |   |
| Promissory notes payable                               |   |                          | 2,163,016   |   |                                                                |   | 150,512 |   |   |   | 115,460 |   |   |   | 2,428,988 |   |
| Repayments of long-term debt                           |   |                          | (174,862    | )      |                                                                |   | (34,252 | ) |   |   | (25,440 | ) |   |   | (234,554 | ) |
| Proceeds from issuance of convertible notes            |   |                          | 2,171,686   |   |                                                                |   | 1,100,108 |   |   |   | 4,817,114 |   |   |   | 9,653,977 |   |
| Restricted cash                                        |   |                          | 0           |   |                                                                |   | 0 |   |   |   | 117,327 |   |   |   | 117,327 |   |
|                                                   |   |                          | 7,829,505   |   |                                                                |   | 7,225,483 |   |   |   | 6,913,629 |   |   |   | 21,968,617 |   |
|                                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Foreign Exchange on Cash Held in Foreign Currency      |   |                          | 80,662      |   |                                                                |   | (24,932 | ) |   |   | 0 |   |   |   | 55,730 |   |
| (Decrease) Increase in Cash During Period              |   |                          | 61,332      |   |                                                                |   | (151,535 | ) |   |   | 302,199 |   |   |   | 224,547 |   |
| Cash and Cash Equivalents, Beginning of Period         |   |                          | 163,437     |   |                                                                |   | 314,972 |   |   |   | 12,773 |   |   |   | 222 |   |
|                                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents, End of Period               |   | $                             | 224,769     |   |                                                                | $      | 163,437 |   |   | $ | 314,972 |   |   | $ | 224,769 |   |
|                                                   |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Cash Flow Information                     |   |                          |        |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services                             |   | $                             | 360,030     |   |                                                                | $      | 2,414,233 |   |   | $ | 568,295 |   |   | $ | 3,395,266 |   |
| Shares issued for product license                      |   | $                             | 190,746     |   |                                                                | $      | 0 |   |   | $ | 419,401 |   |   | $ | 610,147 |   |
| Shares issued for promissory note interest             |   | $                             | 65,333      |   |                                                                | $      | 0 |   |   | $ | 0 |   |   | $ | 65,333 |   |
| Shares issued on conversion of convertible notes       |   | $                             | 5,030,345   |   |                                                                | $      | 532,295 |   |   | $ | 1,668,363 |   |   | $ | 7,231,003 |   |
| Shares issued as bonus to director                     |   | $                             | 0           |   |                                                                | $      | 0 |   |   | $ | 52,708 |   |   | $ | 52,708 |   |
| Interest paid                                          |   | $                             | 4,223       |   |                                                                | $      | 15,480 |   |   | $ | 8,500 |   |   | $ | 28,203 |   |

----

----

| 1.  | Nature of Business and Ability to Continue as a Going Concern Valcent Products Inc. (the “Company”) was incorporated under the Alberta Business CorporationsAct on January 19, 1996.  The Company is in the development stage and is engaged principally in the researchand development of consumer and industrial products and processes for global markets. These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) applicable to a going concern, which assumes the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company incurred a net loss of $17,855,490 for the year ended March 31, 2009 (2008- $12,712,358) and as at March 31, 2009, the Company had accumulated deficits of $45,410,499 (2008 - $27,555,009) and a working capital deficiency of $2,101,443 (2008 - $5,094,440).  The Company’s ability to continue as a going concern is dependent upon the economic development of its products, the attainment of profitable operations and the Company’s ability to obtain further financing (Note 4). The Company continues to explore additional funding to finance its operations and obligations. Management is considering all possible financing alternatives, including equity financing, debt financing, joint-venture, corporate collaboration and licensing arrangements. During the year ended March 31, 2009, the Company terminated further development of its Nova Skincare System and Dust Wolf products to focus its efforts on its Vertigro and Verticrop technologies.  In addition, effective March 31, 2009, the Company reached an agreement with significantly all its promissory notes and convertible notes holders, and certain related parties to effecta conversion of the outstanding balances into common shares of the Company (Note 14(c)). These consolidated financial statements do not include any adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. On June 22, 2009, the shareholders of the Company approved a special resolution to reorganize the capital structure of the Company by a share consolidation of its common shares on the basis of eighteen old shares for one new share (18:1), which became effective July 16, 2009. All references to common shares, stock options and warrants and their related pricing in these financial statements give effect to the share consolidation, unless otherwise noted. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.  | Significant Accounting Policies These financial statements have been prepared in accordance with Canadian GAAP and are presented in Canadian dollars.  The significant accounting policies used in these consolidated financial statements are as follows: |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Principles of consolidation These financial statements include the accounts of the Company and its wholly-owned, integrated subsidiaries, Valcent Products EU Limited and Valcent USA, Inc. and Valcent USA’s wholly-owned, integrated subsidiaries, Valcent Management LLC and Valcent Manufacturing Ltd. All significant inter-company transactions and balances have been eliminated. These consolidated financial statements also include the Company’s proportionate share of the assets, liabilities, income and expenses of the Vertigro Joint Venture, as described in Note 8. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (b) | Research and product development costs Research costs are expensed as incurred. Development costs, which meet Canadian GAAP criteria including reasonable assurance regarding recoverability, are capitalized and amortized over the expected economic useful life of the product.  No development costs have been deferred to date.  As the Company is in the development stage, any revenue derived from the test marketing and development of products is considered to be an expense recovery and is, therefore, netted againstproduct development costs. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Intangible assets Intangible assets of the Company include technology and product licenses acquired from third parties. Technology and product licenses are initially recorded at the fair value based on consideration paid and are amortized on a straight-line basis over the estimated useful life of the underlying technologies. The Company reviews the estimated useful lives and carrying values of its technology and productlicenses as part of its periodic assessment for impairment of long-lived assets. The amount shown for technology and product licenses do not necessarily reflect present or future value and the ultimate amount recoverable will be dependent upon the successful development and commercialization of products based on these underlying technologies. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Cash and cash equivalents The Company considers all highly liquid financial instruments with a maturity of 90 days or less from the date purchased to be cash equivalents.  At March 31, 2009 and 2008, cash and cash equivalents consisted of cash on deposit and money market securities. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Inventories The Company records inventory at the lower of cost or net realizable value. Fixed production overhead is allocated by the consistent use of either first-in, first-out or the weighted average method to measure inventory. Any previous write-downs are required to be reversed when the value of the inventory increases. The amount of the reversal is limited to the amount of the original write-down. Inventories are valued at the lower of cost and net realizable value, with cost being determined on an average cost basis. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Property and equipment The Company amortizes its leasehold improvements on a straight-line basis over the life of the lease.  Other assets are amortized using the straight-line method over 10 years for building, 5 years for equipment, 3 1/3 years for computer equipment and 5 years for furniture and fixtures and automobiles. During the year of acquisition, amortization is 50% of amounts otherwise determinable. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (g) | Foreign currency transactions and translation The Company presents its financial statements in Canadian dollars.  Amounts recorded in foreign currencies are translated into Canadian dollars as follows: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Monetary assets and liabilities, at the year-end exchange rates; |
|--------|-----|------------------------------------------------------------------|

|   | (ii) | Non-monetary assets and liabilities, at historical exchange rates; and |
|--------|------|------------------------------------------------------------------------|

|   | (iii) | Income and expense items, at the exchange rate in effect on the date of the transaction. |
|--------|-------|------------------------------------------------------------------------------------------|

|   |   (h) | Gains and losses arising from the translation of foreign currency are included in operations for the year. Use of estimates and measurement uncertainty The preparation of financial statements in conformity with Canadian GAAP 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 amounts of revenues and expenses during the reporting period.  Significant areas requiring the use of estimates include the net realizable value of accounts receivable and inventories, impairmentof property and equipment, rates of amortization, fair value of product license, amount of accrued liabilities, the variables used to calculate interest, accretion and financing costs on convertible notes, the variables used to calculate the fair value of stock-based compensation and the determination of the valuation allowance for future income tax assets. While management believes the estimates are reasonable, actual results could differ from those estimates and could impact future results of operations andcash flows. |
|--------|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Loss per share Loss per share is calculated using the weighted average number of common shares outstanding during the year. The Company uses the treasury stock method for calculating diluted earnings per share.  Under this method, the dilutive effect on earnings per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments.  It assumes that the proceeds would be used to purchase common shares at the average marketprice during the period.  However, the calculation of diluted loss per share excludes the effect of various conversions and the exercise of options and warrants and similar instruments that would be anti-dilutive. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | Stock-based compensation The Company accounts for stock-based compensation expense using the fair value based method with respect to all stock-based awards to directors, employees and non-employees, including awards that are direct awards of stock and call for settlement in cash or other assets or stock appreciation rights that call for settlement by the issuance of equity instruments. Under this method, stock-based payments are recorded as an expense over the vesting period or when the awards or rights are granted,with a corresponding increase to contributed surplus. When stock options are exercised, the corresponding fair value is transferred from contributed surplus to share capital. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (k) | Income taxes The Company follows the asset and liability method of accounting for income taxes.  Under this method of tax allocation, future income tax assets and liabilities are determined based on differences between the financial statement carrying values and their respective income tax basis (temporary differences).  Future income tax assets and liabilities are measured using the tax rates expected to be in effect when the temporary differences are likely to reverse.  Theeffect on future income tax assets and liabilities of a change in tax rates is included in operations in the period in which the change is enacted or substantially assured.  The amount of future income tax assets recognized is limited to the amount of the benefit that is more likely than not to be realized. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (l) | Non-monetary consideration In situations where common shares are issued and the fair value of the goods or services received is not readily determinable, the fair value of the common shares is used to measure and record the transaction. The fair value of the common shares issued in exchange for the receipt of goods and services is based on the share price as of the earliest of: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | the date at which the counterparty’s performance is complete; |
|--------|-----|---------------------------------------------------------------------|

|   | (ii) | the date at which a commitment for performance by the counterparty to earn the common shares is reached; or |
|--------|------|-------------------------------------------------------------------------------------------------------------|

|   | (iii) | the date at which the common shares are issued if they are fully vested and non-forfeitable at that date. |
|--------|-------|-----------------------------------------------------------------------------------------------------------|

|   | (m) | Financial Instruments Financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities, which are measured at amortized cost. Subsequentmeasurement and changes in fair value will depend on their initial classification as follows: held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net income; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is no longer recognized or impaired, at which time the amounts would be recorded in net income. Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as other than held-for-trading, which are expensed as incurred, are included in the initial carrying value of such instruments and amortized using the effective interest method. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (n) | Impairment of long-lived assets Long-lived assets are reviewed whenever events or changes in circumstances indicate that the carrying value may not be recoverable.  An impairment loss is recognized when the carrying amount of a long-lived asset is not recoverable and exceeds its fair value, with fair value generally based on future discounted cash flows. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (o) | Revenue recognition Revenue from the sales of products is recognized when the product has been delivered to the purchaser, the price is fixed or determinable and when collectability is reasonably assured. Sales during the development stage are netted against product development costs (Note 16). Interest income is recognized on an accrual basis as earned at the effective rate of interest of the investment over the term to maturity. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (p) | Changes in accounting policies Effective April 1, 2008, the Company adopted the following standards of the Canadian Institute of Chartered Accountants (“CICA”). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i)  | Capital Disclosures (Section 1535) Section 1535 specifies the disclosure of: (i) an entity’s objectives, policies and procedures for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has complied with any capital requirements; and (iv) if it has not complied, the consequences of such non-compliance. As a result of the adoption of this standard, additional disclosure on the Company’s capital management strategy has been included in note 4. |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii)  | Financial Instruments - Disclosures and Presentation Sections 3862 and 3863 replace Section 3861, “Financial Instruments – Disclosures and Presentation”, revising its disclosure requirements and carrying forward its presentation requirements. These new sections place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how the entity managesthose risks. Section 3862 specifies disclosures that enable users to evaluate: (i) the significance of financial instruments for the entity’s financial position and performance; and (ii) the nature and extent of risks arising from financial instruments to which the entity is exposed and how the entity manages those risks. As a result of the adoption of these standards, additional disclosures on the risks of certain financial instruments have been included in notes 3 and 4. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (p)  | Changes in accounting policies (Continued) |
|--------|-----------|--------------------------------------------|

|   | (iii) | Amendments to Section 1400 – Going Concern |
|--------|-------|--------------------------------------------------|

|   | CICA Section 1400, “General Standards of Financial Statement Presentation”, was amended to include requirements to assess and disclose an entity's ability to continue as a going concern. When financial statements are not prepared on a going concern basis, that fact shall be disclosed together with the basis on which the financial statements are prepared and the reason why the company is not considereda going concern.  The Company’s accounting policies were already in accordance with the requirements of the amended section and there was no effect on the Company’s consolidated financial statements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (q) | Future accounting changes |
|--------|-----|---------------------------|

|   | (i) | International Financial Reporting Standards ("IFRS") In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period.  In February 2008, the AcSB announced that the effective date for publicly-listed companies to use IFRS is for interim and annual financial statements relating to fiscal years beginningon or after January 1, 2011 which will require the restatement for comparative purposes of amounts reported by the Company for the year ended March 31, 2011. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Goodwill and intangible assets In February 2008, the CICA issued Section 3064, “Goodwill and Intangible Assets”. Effective for fiscal years beginning on or after October 1, 2008, this section provides guidance on the recognition, measurement, presentation and disclosure for goodwill and intangible assets, other than the initial recognition of goodwill or intangible assets acquired in a business combination. Retroactive application to prior period financial statements will be required. The Company does not expectthese changes to have an impact on its consolidated financial statements. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Business Combinations In January 2009, the CICA issued Section 1582, “Business Combinations”, Section 1601, “Consolidations” and Section 1602, “Non-Controlling Interests”. These sections replace the former Section 1581, “Business Combinations” and Section 1600, “Consolidated Financial Statements” and establish a new section for accounting for a non-controlling interest in a subsidiary. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 2. | Significant Accounting Policies (Continued) |
|----|---------------------------------------------|

|   | (q)  | Future accounting changes (Continued) |
|--------|-----------|---------------------------------------|

|   | (iii) | Business Combinations (Continued) Sections 1582 and 1602 will require net assets, non-controlling interests and goodwill acquired in a business combination to be recorded at fair value and non-controlling interests will be reported as a component of equity. In addition, the definition of a business is expanded and is described as an integrated set of activities and assets that are capable of being managed to provide a return to investors or economicbenefits to owners. Acquisition costs are not part of the consideration and are to be expensed when incurred. Section 1601 establishes standards for the preparation of consolidated financial statements. These new sections apply to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier adoption of these sections is permitted as of the beginning of a fiscal year. All three sections must be adopted concurrently. Management does not believe these new sections will have an impact on the consolidated financial statements. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.  | Financial Instruments and Risks The Company has designated its cash and cash equivalents and restricted cash as held-for-trading; accounts receivable as loans and receivables; and its accounts payable and accrued liabilities, promissory notes payable, amounts due to related parties, convertible notes and long-term debt as other financial liabilities. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Fair value The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, promissory note payable and amounts due to related parties approximated their fair values because of the short-term maturity of these financial instruments. The carrying values of restricted cash and long-term debt approximated their fair values as these financial instruments bore interest at approximate market rates of interest. Convertible debentures are shown at amortized cost. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Market risk |
|--------|-----|-------------|

|   | (i) | Interest rate risk Interest rate risk consists of two components: |
|--------|-----|------------------------------------------------------------------------|

|   | (a) | To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in prevailing market interest rates, the Company is exposed to interest rate cash flow risk. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | To the extent that changes in prevailing market interest rates differ from the interest rates in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 3. | Financial Instruments and Risks (Continued) |
|----|---------------------------------------------|

|   | (b)  | Market risk (Continued) The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities. The Company is exposed to interest rate cash flow risk on its long-term debt with variable interest rates as the payments on the loan will fluctuate as interest rates fluctuate during the term of the debt. The Company is exposed to interest rate price risk on its promissory and convertible notes with fixed interest rates as the market rate of interest differs from the interest rate of the convertible notes. |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Currency risk The Company operates internationally and is therefore exposed to foreign exchange fluctuations in the value of foreign currencies in relation to the Canadian dollar. The Company’s foreign currency exposures comprise cash, accounts receivable, accounts payable and convertible notes denominated in British pounds and United States dollars as follows: |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Cash                     |   | £ | 17,200 |   | US$    | 146,800   |   |
|--------------------------|--------|--------|--------|--------|--------|-----------|--------|
| Accounts receivable      |   |   | 12,000 |   |   | 637,000   |   |
| Accounts payable         |   |   | 7,000  |   |   | 468,000   |   |
| Promissory notes payable |   |   | 0      |   |   | 2,223,000 |   |
| Convertible notes        |   |   | 0      |   |   | 7,500     |   |
|                     |   |   |   |   |   |      |   |

|   |   | The Company does not use derivatives or other techniques to manage foreign currency risk.  Based on the above net foreign currency exposure as at March 31, 2009 and assuming all other variables remain constant, a 10% weakening or strengthening of the Canadian dollar against the British pound and US dollar would result in the following increases or decreases in the Company’s loss : |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Increase/decrease in net loss – British pound |   | $ | 2,400   |   |
|-----------------------------------------------------|--------|---|---------|--------|
| Increase/decrease in net loss – US dollar     |   | $ | 241,500 |   |

|   | (c) | Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.  The Company is exposed to credit risk with respect to its cash and accounts receivable. The credit risk associated with cash is minimal as cash has been placed with major financial institutions.  The Company is exposed to significant credit risk with respect to accounts receivable as the majority of the amount is duefrom a joint venture partner. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 3. | Financial Instruments and Risks (Continued) |
|----|---------------------------------------------|

|   | (c) | Credit risk (Continued) Concentration of credit risk exists with respect to the Company’s cash as all amounts are held at single major Canadian, American and British financial institutions.  The Company’s concentration of credit risk and maximum exposure thereto is as follows: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                |   | 2009   |      |   | 2008   |   |
|---------------------|--------|--------|-----------|--------|--------|--------|
|                |   |   |      |   |   |   |
| Cash                |   | $      | 224,769   |   |   | $      | 163,437 |   |
| Accounts receivable |   |   | 920,235   |   |   |   | 462,156 |   |
|                |   |   |      |   |   |   |   |   |
|                |   | $      | 1,145,004 |   |   | $      | 625,593 |   |

|   | (d) | Liquidity risk  Liquidity risk is the risk that the Company will encounter difficulty in obtaining funds to meet commitments.  The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities.  At March 31, 2009, the cash balance of $224,769 (2008 - $163,437) is insufficient to meet the Company’s business requirements for the coming year. Therefore, the Company will be required to raise additional capitalor sell one or more of its technologies in order to fund its operations for fiscal 2010.  At March 31, 2009, the Company had the following amounts coming due during the next year: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | Carrying amount |      | Due date |
|---------------------------------|--------|-----------------|-----------|----------|
| Accounts payable                |   | $               | 541,802   |     | 90 days |
| Due to related parties          |   | $               | 186,645   |     | 90 days |
| US$400,000 note payable         |   | $               | 504,520   |     | 90 days |
| Convertible note                |   | $               | 46,512    |     | 90 days |
| US$500,000 subscription advance |   | $               | 630,650   |     | Aug 31, 2009 |
| US$1,323,000 note payable       |   | $               | 1,473,060 |     | Dec 31, 2009 |

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| 3.  | Financial Instruments and Risks (Continued) |
|----------|---------------------------------------------|

|   | (e) | Classification of financial instruments |
|--------|-----|-----------------------------------------|

|                   |   | Loans and Receivables |    |   | Held for Trading |   |      | Other Liabilities |   |
|------------------------|--------|-----------------------|---------|--------|------------------|--------|-----------|-------------------|--------|
|                   |   |                  |    |   |             |   |      |              |   |
| Cash                   |   | $                     | 0       |   |             | $      | 224,769   |              |   | $ | 0 |   |
| Accounts receivable    |   |                  | 920,235 |   |             |   | 0         |              |   |   | 0 |   |
| Accounts payable       |   |                  | 0       |   |             |   | 0         |              |   |   | 541,802 |   |
| Promissory notes       |   |                  | 0       |   |             |   | 2,643,514 |              |   |   | 0 |   |
| Due to related parties |   |                  | 0       |   |             |   | 0         |              |   |   | 186,645 |   |
| Convertible notes      |   |                  | 0       |   |             |   | 11,228    |              |   |   | 0 |   |
| Total                  |   | $                     | 920,235 |   |             | $      | 2,879,511 |              |   | $ | 728,447 |   |
|                   |   |                  |    |   |             |   |      |              |   |   |   |   |

| 4.  | Capital Management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its products. The Company relies mainly on equity and debt instrument issuances to raise new capital. In the management of capital, the Company includes the components of shareholders’ equity and convertible debt, promissory notes and long-termdebt. Management estimates anticipated research and development expenditures to ensure that there is sufficient capital on hand to meet ongoing obligations. Management reviews the Company’s capital management policy regularly. As part of the strategy to preserve liquidity, the Company has restructured its capital structure and agreed to settle convertible notes, certain convertible notes, certain promissory notes and certain related party balances as of March 31, 2009 with shares (Note 14(c)). The Company’sinvestment policy is to invest its excess cash in highly liquid short‐term deposits with terms of one year or less and which can be liquidated after thirty days without interest penalty. The Company currently does not have sufficient capital to cover its administrative costs or fund research and development programs for the next twelve months. The Company will only be able to continue to develop its products with additional equity or debtinstrument financing. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 5.  | Property and Equipment |
|----------|------------------------|

|                   |   | 2009   |      |
|------------------------|--------|--------|-----------|
|                   |   | Cost   |      |   | Accumulated Amortization |   |   | Net Book Value |   |
|                   |   |   |      |   |   |   |   |   |   |
| Land                   |   | $      | 275,240   |   |   | $ | 0 |   |   | $ | 275,240 |   |
| Building               |   |   | 686,750   |   |   |   | 417,930 |   |   |   | 268,820 |   |
| Equipment              |   |   | 394,056   |   |   |   | 162,642 |   |   |   | 231,414 |   |
| Computer equipment     |   |   | 144,154   |   |   |   | 97,528 |   |   |   | 46,626 |   |
| Furniture and fixtures |   |   | 89,429    |   |   |   | 48,361 |   |   |   | 41,068 |   |
| Automobiles            |   |   | 54,696    |   |   |   | 10,254 |   |   |   | 44,442 |   |
| Leasehold improvements |   |   | 199,534   |   |   |   | 36,928 |   |   |   | 162,606 |   |
|                   |   | $      | 1,843,859 |   |   | $ | 773,643 |   |   | $ | 1,070,216 |   |
|                   |   |   |      |   |   |   |   |   |   |   |   |   |
|                   |   |   |      |   |   |   |   |   |   |   |   |   |
|                   |   | 2008   |      |
|                   |   | Cost   |      |   | Accumulated Amortization |   |   | Net Book Value |   |
|                   |   |   |      |   |   |   |   |   |   |   |   |   |
| Land                   |   | $      | 275,240   |   |   | $ | 0 |   |   | $ | 275,240 |   |
| Building               |   |   | 389,348   |   |   |   | 4,951 |   |   |   | 384,397 |   |
| Equipment              |   |   | 134,895   |   |   |   | 3,351 |   |   |   | 131,544 |   |
| Computer equipment     |   |   | 121,320   |   |   |   | 31,605 |   |   |   | 89,715 |   |
| Furniture and fixtures |   |   | 89,134    |   |   |   | 20,684 |   |   |   | 68,450 |   |
| Automobiles            |   |   | 39,711    |   |   |   | 811 |   |   |   | 38,900 |   |
| Leasehold improvements |   |   | 167,593   |   |   |   | 20,731 |   |   |   | 146,862 |   |
|                   |   | $      | 1,217,241 |   |   | $ | 82,133 |   |   | $ | 1,135,108 |   |

|   | During the year ended March 31, 2009, the Company terminated further development of its Nova Skincare Systems and Dust Wolf products and determined that certain capital assets used for development of those products had no continuing value to the Company and therefore   wrote down the carrying value of those assets to their net recoverable amounts based on management’s estimate. The write-down amounting to $509,892 is included in accumulated amortization. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 6. | Product License (Continued) On July 29, 2005, the Company completed a licensing agreement (“Agreement”) for the exclusive worldwide marketing rights to the Nova Skincare System, the Dust Wolf, the Tomorrow Garden Kit and a right of first offer on future products developed by Pagic LP (“Pagic”), formerly MK Enterprises LLC, a private company with a director in common. In conjunction with the Agreement, the Company agreed to issue Pagic and its assignees 1,111,112 common shares at a deemed cost of US $1,000,000, based on the historical cost of the license, of which 645,110 common shares were issued during the year ended March 31, 2006 and the remaining 466.002 common shares were issued during the year ended March 31, 2007. Of the 1,111,112common shares issued, 523,789 common shares were issued to parties that became related parties to the Company. During the year ended March 31, 2008, due to uncertainty in determining future cash flows related to products under license, the Company wrote-down the value of the product license by $1,306,074 to $1. The Agreement required the Company to pay Pagic and its assignees, royalties of US $10 per Nova Skincare System unit sold, US $2 per Dust Wolf unit sold and 4.5% of Tomorrow Garden Kit net sales.  In addition, the Company is required to pay a royalty of 3% of net sales related to ancillary product sales from these products.  In order to keep the productsunder license, the Company was required to pay a minimum royalty for each of the Nova Skincare System, Dust Wolf and Tomorrow Garden Kit products and their related ancillary products of US $37,500 beginning April 1, 2007 and US $50,000 per year thereafter.  To keep the overall master license in good standing, the total of royalties and all other fees paid to Pagic shall be at least US$ 400,000 per year beginning April 1, 2007.  During the year ended March 31, 2009, $318,250 (2008 - $565,135)was paid or accrued to Pagic under the terms of the license. During the year ended March 31, 2009, the Company discontinued development of its Nova Skincare System and Dust Wolf products and allowed the product license rights to revert to Pagic and its assignees.  The Company retains a 3% overriding royalty on gross sales generated by Pagic or its assignees from any future product sales in exchange for system developmentsto date. The outstanding royalty and other accrued amounts owing to Pagic in the amount of US $156,519 were settled via a letter of agreement dated March 29, 2009 for a commitment to issue 391,298 common shares, with such shares subject to quarterly pooling releases beginning January 1, 2010 (Note 14(c)). Effective April 1, 2009, the Company terminated the Agreement and executed a new purchase agreement (the “Purchase Agreement”) to acquire all ownership rights and intellectual property relating to its VertiCrop vertical plant growing technology and Tomorrow Garden Kit technology (the “Technologies”) from Glen Kertz, Pagic and West Peak. Pursuant to the Purchase Agreement, the Company agreed to pay a total of US $2,000,000 plus issue 3% of its common shares on conclusion of the purchase agreement.  The US $2,000,000 is payable on a cumulative basis as to US $65,000 on signing (paid) plus the greater of 3% of the gross monthly product sales less returns from exploitation of the technologies orUS $12,000 per month until US $2,000,000 has been paid.  The ownership of the Technologies will remain in escrow until fully paid or if the Company defaults in making payments.  The issuance of 3% of its common shares is payable upon release of the Technologies from escrow to the Company.  The Company may at any time elect to pay out the remaining balance due.  Should the Company default under this agreement the Technologies will revert back to the vendors. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 7.  | Prepaid Expenses Prepaid expenses as at March 31, 2009 include $16,606 (2008 - $2,015,837) related to the deferred portion of business consulting and investor relations services agreements. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.  | Vertigro Joint Venture On October 2, 2006, as amended June 25, 2007, the Company entered into a letter of agreement (“LOA”) with Pagic, West Peak and Global Green Solutions Inc. (“Global Green”), whereby Global Green agreed to fund the next phase of the development of a high density vertical bio-reactor technology.  Pursuantto the LOA, the Company and Global Green established a commercial joint venture (the “Vertigro JV”), in which Global Green agreed to provide up to US $3,000,000 in initial funding to continue the research and development of the bio-reactor technology, construct a working prototype of the bio-reactor and develop the technology for commercial uses.  The Company is obligated to provide product support, research and development and the non-exclusive use of the Company’s properties andlands for which Global Green has agreed to reimburse the Company as part of its US $3,000,000 initial funding commitment.  Until such time as the joint venture has fully repaid to Global Green the US $3,000,000, Global Green shall receive 70% of the net cash flow generated by anticipated future operations after which each of Global Green and the Company will hold a 50% interest in the Vertigro JV, subject to an aggregate 4.5% royalty based on gross revenue as defined in the Vertigro JV, to Pagic andWest Peak. On May 5, 2008, the Company and Global Green concurrently organized Vertigro Algae Technologies, LLC (“VAT”) and entered into a revised operating agreement (“Operating Agreement”) which replaced the LOA.  Pursuant to the Operating Agreement, Global Green and the Company each hold a 50% interest in VAT and have committed to fund projectdevelopment costs according to ownership allocation.  Further, the Company will retain assets of Vertigro JV, including buildings, laboratory, and equipment.  Global Green will receive 70% of the net cash flow generated by the VAT until it has received US $3,000,000 in excess of its 50% interest in such cash flow, and the Company will receive the remaining 30% net cash flow. Also on May 5, 2008, VAT executed a Technology License Agreement (“Technology License”) together with Pagic and West Peak.  The Technology License licenses certain algae biomass technology and intellectual property to VAT for purposes of commercialization and exploitation for all industrial, commercial and retail applications worldwide (“AlgaeBiomass Technology”).  As consideration for the Technology License, the Company and Global Green agreed to issue 16,667 common shares and 300,000 common shares, respectively, to Pagic and also pay a one-time commercialization fee of US $50,000 upon the Algae Biomass Technology achieving commercial viability.  The Technology License is subject to royalty of 4.5% of gross customer sales receipts for use of the Algae Biomass Technology and aggregate annual royalty minimum amounts of US$50,000 in 2009, US $100,000 in 2010 and US $250,000 in 2011 and each year thereafter in which the Technology License is effective.  The Company issued the 16,667 common shares to Pagic on August 18, 2008 at a fair value of $190,746 which has been expensed to product development and has accrued its share of the US $50,000 payment due on March 31, 2009. For the year ended March 31, 2009, Global Green and the Company incurred a total of US $1,281,712 (2008 – US $5,735,893) in costs related to the Vertigro JV and VAT.  During the year ended March 31, 2009, the Company agreed to settle $964,941, related to the Vertigro JV and VAT, owing from Global Green through a reduction of accounts receivable which hasbeen included in product development expenses.  Accounts receivable as at March 31, 2009 includes a receivable due from Global Green in the amount of $812,048 (2008 - $404,935). |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 9.  | Inventories As at March 31, 2009, inventories in the aggregate of $34,072 (2008 - $nil) consists of product relating to the Company’s Tomorrow Garden project and are valued at lower of cost and net realizable value. During the year ended March 31, 2009, the Company discontinued product development relating to its Nova Skincare System and Dust Wolf products and any inventory related thereto amounting to raw materials of $314,012, and finished goods inventory of $330,451 were expensed to product development. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.  | Convertible Notes Details of the convertible notes are as follows: Convertible note continuity: |
|-----------|-----------------------------------------------------------------------------------------------------------|

|                               |   | US $      |      |   | CDN $     |   |
|------------------------------------|--------|-----------|-----------|--------|-----------|--------|
|                               |   | Balance   |      |   | 2009      |   |   | 2009 |   |   | 2009 |   |   | 2009 |   |   | Balance |   |   | Balance |   |
|                               |   | March 31, |      |   | Issued    |   |   | Equity |   |   | Interest / |   |   | Conversions/ |   |   | March 31, |   |   | March 31, |   |
| Date of Issue                      |   | 2008      |      |   | Principal |   |   | Portion |   |   | Penalty |   |   | Repayments* |   |   | 2009 |   |   | 2009 |   |
|                               |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July/August 2005 (Note 10(a)) |   | $         | 259,825   |   |      | $      | 0 |   |   | $ | 0 |   |   | $ | 15,647 |   |   | $ | (275,472 | ) |   | $ | 0 |   |   | $ | 0 |   |
| April 2006 (Note 10(b))            |   |      | 534,442   |   |      |   | 0 |   |   |   | 0 |   |   |   | 29,287 |   |   |   | (563,729 | ) |   |   | 0 |   |   |   | 0 |   |
| April 2006 (Note 10(c))            |   |      | 85,542    |   |      |   | 0 |   |   |   | 0 |   |   |   | 4,673 |   |   |   | (90,215 | ) |   |   | 0 |   |   |   | 0 |   |
| December 2006 (Note 10(e))    |   |      | 1,659,782 |   |      |   | 0 |   |   |   | 0 |   |   |   | 150,544 |   |   |   | (1,810,326 | ) |   |   | 0 |   |   |   | 0 |   |
| January 2007 (Note 10(f))          |   |      | 1,569,183 |   |      |   | 0 |   |   |   | 0 |   |   |   | 468,170 |   |   |   | (2,037,353 | ) |   |   | 0 |   |   |   | 0 |   |
| August 2007 (Note 10(g))           |   |      | 678,567   |   |      |   | 0 |   |   |   | 0 |   |   |   | 102,260 |   |   |   | (780,827 | ) |   |   | 0 |   |   |   | 0 |   |
| September 2007 (Note 10(h))   |   |      | 297,433   |   |      |   | 0 |   |   |   | 0 |   |   |   | 154,295 |   |   |   | (442,826 | ) |   |   | 8,902 |   |   |   | 11,228 |   |
| July 2008 (Note 10(i))             |   |      | 0         |   |      |   | 2,168,000 |   |   |   | (1,315,003 | ) |   |   | 1,262,529 |   |   |   | (2,115,526 | ) |   |   | 0 |   |   |   | 0 |   |
|                               |   | $         | 5,084,774 |   |      | $      | 2,168,000 |   |   | $ | (1,315,003 | ) |   | $ | 2,187,405 |   |   | $ | (8,116,274 | ) |   | $ | 8,902 |   |   | $ | 11,228 |   |

|                               |   | US $      |      |   | CDN $     |   |
|------------------------------------|--------|-----------|-----------|--------|-----------|--------|
|                               |   | Balance   |      |   | 2008      |   |   | 2008 |   |   | 2008 |   |   | 2008 |   |   | Balance |   |   | Balance |   |
|                               |   | March 31, |      |   | Issued    |   |   | Equity |   |   | Interest / |   |   |   |   |   | March 31, |   |   | March 31, |   |
| Date of Issue                      |   | 2007      |      |   | Principal |   |   | Portion |   |   | Penalty |   |   | Conversions |   |   | 2008 |   |   | 2008 |   |
|                               |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| July/August 2005 (Note 10(a)) |   | $         | 316,957   |   |      | $      | 0 |   |   | $ | 0 |   |   | $ | 22,389 |   |   | $ | (79,521 | ) |   | $ | 259,825 |   |   | $ | 265,583 |   |
| April 2006 (Note 10(b))            |   |      | 495,607   |   |      |   | 0 |   |   |   | 0 |   |   |   | 38,835 |   |   |   | 0 |   |   |   | 534,442 |   |   |   | 546,841 |   |
| April 2006 (Note 10(c))            |   |      | 79,115    |   |      |   | 0 |   |   |   | 0 |   |   |   | 6,427 |   |   |   | 0 |   |   |   | 85,542 |   |   |   | 87,527 |   |
| December 2006 (Note 10(e))    |   |      | 670,486   |   |      |   | 0 |   |   |   | 0 |   |   |   | 989,296 |   |   |   | 0 |   |   |   | 1,659,782 |   |   |   | 1,698,289 |   |
| January 2007 (Note 10(f))          |   |      | 813,084   |   |      |   | 0 |   |   |   | 0 |   |   |   | 967,767 |   |   |   | (211,668 | ) |   |   | 1,569,183 |   |   |   | 1,605,558 |   |
| August 2007 (Note 10(g))           |   |      | 0         |   |      |   | 650,000 |   |   |   | (230,007 | ) |   |   | 258,574 |   |   |   | 0 |   |   |   | 678,567 |   |   |   | 694,310 |   |
| September 2007 (Note 10(h))   |   |      | 0         |   |      |   | 391,000 |   |   |   | (213,249 | ) |   |   | 119,682 |   |   |   | 0 |   |   |   | 297,433 |   |   |   | 304,633 |   |
|                               |   | $         | 2,375,249 |   |      | $      | 1,041,000 |   |   | $ | (443,256 | ) |   | $ | 2,402,970 |   |   | $ | (291,189 | ) |   | $ | 5,084,774 |   |   | $ | 5,202,741 |   |

----

----

| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (a) | US $1,277,200 July – August 2005 Convertible Note To provide working capital for product development, from July 25, 2005 to August 2005 the Company issued one-year, unsecured US $1,277,200 8% per annum convertible notes and three-year Class A and B warrants to acquire: (i) up to 50,741 common shares of the Company at a price per share of US $9.00; and (ii) up to an additional 50,741 common shares of the Company at a price per share of US $18.00. The holders of theconvertible notes may elect to convert the notes into common shares of the Company at the lesser of: (i) 70% of the average of the five lowest closing bid prices for the common shares for the ten trading days prior to conversion; and (ii) US $9.90.  Accrued and unpaid interest may be converted into common shares of the Company at US $9.00 per share.  The Company may, subject to notice provisions and its common shares trading above US $27.00 per share for more than twenty consecutive tradingdays, elect to payout the notes and interest due by paying 130% of the amount due under the notes plus interest.  The share purchase warrants carry a “net cashless” exercise feature (“Cashless Conversion Feature”) allowing the holder thereof, under certain limited circumstances, to exercise the warrants without payment of the stated exercise price, but rather solely in exchange for the cancellation of that number of common shares into which sufficient warrants are exercisable,which will cover the exercise proceeds otherwise payable. These convertible notes are unsecured and as they have passed their maturity date, as at March 31, 2009 are due on demand. In conjunction with this financing, the Company paid consultants an amount equal to 10% of the gross proceeds and issued 23,651 common shares at a deemed value of $285,242. There are 14,192 finders’ A warrants outstanding whereby the holders have the right to purchase 14,192 common shares at US $9.00 per share until August 5, 2008 and 23,652 finders’ B warrants whereby the holdersshall have the right to purchase 23,652 common shares at US $13.50 per share until August 5, 2008.  A total of US $82,200 in registration penalties incurred in the year ended March 31, 2007 were converted to a new convertible debenture in the same amount on April 6, 2007 (Note 10(c)). During the year ended March 31, 2009, principal of US $92,281 and interest of US $9,423 were converted to 14,845 common shares and interest of US $15,647 (2008 – US $22,389) was accrued on the unconverted principal balance of these convertible notes. Effective March 27, 2009, the Company agreed to settle the remaining unpaid principal, accrued interest and prepayment penalties aggregating US $173,768 for 595,006 common shares that will be restricted from trading and pooled with equal quarterly releases beginning in January 2010.  The 595,006 common shares were issued on May 11, 2009 (Note 14(c)). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | US $551,666 April 2006 Convertible Note On April 6, 2006, the Company consummated a private offering transaction with and among a syndicated group of investors, pursuant to which the Company issued, in the aggregate, US $551,666 in 8% per annum convertible notes and three-year Class A and B warrants to acquire: (i) up to 40,864 common shares of the Company at a price per share of US $9.00; and (ii) up to an additional 40,864 common shares of the Company at a price per share of US $18.00. Subject to certain limitations, the principalamount of the notes, together with any accrued interest may be converted into common shares of the Company at the lesser of: |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (b)  | US $551,666 April 2006 Convertible Note (Continued) |
|--------|-----------|-----------------------------------------------------|

|   | (a) | 70% of the average of the five lowest closing bid prices for the common shares for the ten trading days prior to conversion; or |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | US $9.90.  The convertible notes carry a redemption feature, which allows the Company to retire them, in whole or in part, for an amount equal to 130% of that portion of the face amount being redeemed, but only in the event that the common shares have a closing price of US $27.00 per share for at least twenty consecutive trading days and there has otherwise been no default. The warrants carry a CashlessConversion Feature. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | These convertible notes are unsecured and as they have passed their maturity date, as at March 31, 2009 are due on demand.In conjunction with these private offering transactions, the Company paid consultants: (i) US $55,166 cash, representing 10% of the gross proceeds realized; (ii) 10,216 common shares; (iii) three-year warrants to purchase up to 6,129 common shares at a price per share of US $9.00; and (iv) three-year warrants to purchase up to 10,215common shares at a price per share of US $13.50.During the year ended March 31, 2009, convertible notes and interest of US $460,679 were converted to 111,751 common shares and interest of US $21,312 (2008 – US  $38,835) was accrued on the unconverted principal balance of these convertible notes.Effective March 27, 2009, the Company agreed to settle the remaining unpaid principal, accrued interest and prepayment penalties aggregating US $103,050 for 473,101 common shares that will be restricted from trading and pooled with equal quarterly releases beginning in January 2010.  The 473,101 common shares were issuedon May 11, 2009 (Note 14(c)). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | US $82,200 April 2006 Penalty Convertible Note On April 6, 2006, in conjunction with certain private placements, the Company reached a verbal agreement with investors wherein the Company agreed to convert US $82,200 in accrued penalties associated with the July 25, 2005 through August 5, 2005 convertible notes into US$82,200 convertible penalty notes (Note 10(a)) carrying terms similar to the July 25, 2005 through August 5, 2005 convertible notes and6,089 warrants.  These warrants carry a Cashless Conversion Feature and each warrant entitles the holder to purchase additional common shares for three years at a price of US $13.50 per share. These convertible notes are unsecured and as they have passed their maturity date, as at March 31, 2009 are due on demand. During the year ended March 31, 2009, convertible notes and interest of US $64,410 were converted to 17,994 common shares and interest of US $4,673 (2008 – US $6,427) was accrued on the unconverted principal balance of these convertible notes. Effective March 27, 2009, the Company agreed to settle the remaining principal, accrued interest and prepayment penalties aggregating US $25,715 for 106,443 common shares that will be restricted from trading and pooled with equal quarterly releases beginning in January 2010.  The 106,443 common shares were issued on May 11, 2009 (Note 14(c)). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (d) | Warrant Exercise Price Reduction and Registration Penalty Interest Certain of the July and August 2005 and the April 6, 2006 convertible notes contained registration rights whereby the Company agreed to pay a penalty of 2% for every thirty days that elapsed after the Company was required to have a registration statement effective, plus a reduction in the warrant price of certain of the warrants issued of US $1.80. As a result of the Company not filing the required registration statement until April 27, 2006, the Company incurred penalties, which have beenincluded in interest expense.  An aggregate of 189,299 previously issued share purchase warrants relating to certain of the July and August 2005 and the April 6, 2006 convertible notes have reduced exercise prices from US $9.00, US $13.50 and US $18.00 to US $7.20, US $11.70 and US $16.20, respectively.  In 2007, the Company recognized $80,102 in interest expense with the corresponding amount to contributed surplus as a result of re-valuation of the warrants upon the change in the pricing. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | US $1,500,000 December 2006 Convertible Note On December 1, 2006, the Company accepted subscriptions of US $1,500,000 towards a private placement of 8% per annum, unsecured, convertible notes and three-year warrants to acquire: (i) up to an aggregate of 111,112 common shares of the Company at a price per share of US $9.00; and (ii) up to an additional 111,112 common shares of the Company at a price per share of US $18.00.  Subject to certain limitations,the principal amount of the notes, together with any accrued interest may be converted into common shares of the Company, at the lesser of: (i) 70% of the average of the five lowest closing bid prices for the Company’s common shares for the ten trading days prior to conversion; or (ii) US $9.90.  The convertible notes carry a redemption feature, which allows the Company to retire them, in whole or in part, for an amount equal to 130% of that portion of the face amount being redeemed, but onlyin the event that the common shares have a closing price of US $27.00 per share for at least twenty consecutive trading days and there has otherwise been no default.  These convertible notes are unsecured and as they have passed their maturity date, as at March 31, 2009 are due on demand.  The share purchase warrants may be exercised on a cashless basis.  After December 31, 2007, this convertible note accrues interest at the rate of 15% per annum. The right of the note holders to convert into the Company’s common shares is subject to the contractual agreement between the parties that any conversion by the note holders may not lead at the date of such conversion to an aggregate equity interest in the common shares of the Company greater than 9.99%, inclusive of any derivative securities including options, warrants, convertibledebt, any other convertible debt securities or any other financial instruments convertible into common equity. During the year ended March 31, 2009, the Company accrued US $150,544 (2008 – US $989,296) in interest. Effective March 27, 2009, the Company agreed to settle the remaining principal of US $1,500,000 and accrued interest of US $310,326 for 4,525,807 common shares that are restricted from trading and pooled with equal quarterly releases beginning in January 2010. The 4,525,807 common shares were subsequently issued on May 11, 2009 (Note 14(c)). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (f) | US $2,000,000 January 2007 Convertible Note On January 29, 2007, the Company completed a private placement comprised of $2,000,000 convertible notes.  The 6% unsecured convertible notes matured on December 11, 2008. The notes were convertible into “Units” at the note-holders’ discretion at a conversion price of US $9.00 per Unit. Each “Unit” consisted of one common share and one purchase warrant to purchase an additionalcommon share at US $12.60 per share until December 11, 2008.  At the discretion of the note-holders, interest on the notes was payable in either cash or units at US$9.00 per unit. In connection with this financing, the Company paid consultants US $108,000 in cash and issued 7,500 units exercisable at US $9.00 per unit, with each unit consisting of one common share and one share purchase warrant to purchase a further common share at US $12.60 per share until December 11, 2008.  These convertiblenotes are unsecured and as they have passed their maturity date, as at March 31, 2009 are due on demand.  The Company was obligated to file a resale registration statement on the underlying securities within four months of closing, which it failed to do. As a result of the failure to file the registration statement, the Company recorded penalties of US $120,000 during the year ended March 31, 2007 and a further US $289,973 during the year ended March 31, 2008. During the year ended, March 31, 2009, principal and accrued interest in the amount of US $709,995 was converted into 78,888 common shares, and principal and accrued interest in the amount of US $28,238 was traded for new 10% convertible notes that convert automatically into units (at a conversion price of US $0.40 per unit on the effective date of the share consolidation, each unit comprisedof one common share and one 2-year share purchase warrant to purchase an additional common shares at $0.60 per share for a two year term from the date of issue of the unit). During the year ended March 31, 2009, the Company accrued US $468,170 (2008 – US $967,767) in interest and accreted interest on the principal balance on the unconverted principal balance of these convertible notes. Effective March 27, 2009, the Company agreed to settle the remaining unpaid principal and accrued interest aggregating US $1,299,120 for 3,247,797 common shares that will be restricted from trading and pooled with equal quarterly releases beginning in January 2010.  The 3,247,797 common shares were subsequently issued on May 11, 2009 (Note 14(c)). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | US $650,000 August 2007 Convertible Note On August 10, 2007, the Company issued an unsecured convertible term promissory note in the amount of US $650,000 to a third party bearing interest at 6% per annum.  The convertible note matured on November 15, 2007 and as at March 31, 2009 is due on demand with both interest and principal convertible at the option of the lender into units at US $10.80 per unit, with each unit consisting of one common share and one-half of one share purchase warrant, each whole share purchase warrantexercisable at US $13.50 to purchase an additional common share.  After November 25, 2008, this convertible note accrues interest at the rate of 15% per annum. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (g) | US $650,000 August 2007 Convertible Note (Continued) The Company was required to register the resale of the securities underlying the conversion features of this convertible note on a best-efforts basis, but failed to do so within 180 days from the date of issuance as agreed.  A one-time financial penalty of US $28,567 was incurred during the year ended March 31, 2008. The right of the note holder to convert into the Company’s common shares is subject to the contractual agreement between parties that any conversion by the note-holder may not lead, at the date of such conversion, to an aggregate equity interest greater than 9.99% in the common shares of the Company, inclusive of any derivative securities including options, warrants,convertible debt, any other convertible debt securities or any other financial instruments convertible into common equity. During the year ended March 31, 2009, the Company accrued US $102,260 (2008 – US $258,574) in interest and accreted interest. Effective March 27, 2009, the Company agreed to settle the remaining principal and accrued interest aggregating US $780,827 for 1,952,066 common shares that are restricted from trading and pooled with equal quarterly releases beginning in January 2010. The 1,952,066 common shares were subsequently issued on May 11, 2009 (Note 14(c)) |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | US $391,000 September 2007 Convertible Note On September 27, 2007, the Company issued unsecured one-year term convertible notes bearing interest at 6% per annum in the amount of US $391,000 to third parties.  The convertible notes matured September 30, 2008 and as at March 31, 2009 are due on demand.  Both interest and principal may be converted at the option of the lender at any time at US$10.80 per unit, with each unit consisting of onecommon share and one-half of one share purchase warrant, with each whole share purchase warrant exercisable at US $13.50 to purchase an additional common share for a two-year term from the date of conversion. The Company was required to register the resale of  the securities underlying the conversion features of this convertible note on a best efforts basis, but failed to do so within 90 days from the date of issuance as agreed.  A one-time financial penalty of US $23,460 was incurred during the year ended March 31, 2008. During the year ended March 31, 2009, the Company accrued US $154,295 (2008 – US $119,682) in interest and accreted interest on the principal balance on the unconverted principal balance of these convertible notes. During the year ended March 31, 2009, the Company repaid US $7,500 of the principal on these convertible notes. and, subsequent to March 31, 2009, the Company repaid an additional US $7,500 of principal and US $1,402 in interest. Effective March 27, 2009, the Company agreed to settle the remaining principal and accrued interest aggregating US $435,326 for 1,024,667 common shares that will be restricted from trading and pooled with equal quarterly releases beginning in January 2010.  The 1,024,667 common shares were subsequently issued on May 11, 2009 (Note 14(c)). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (i) | US $2,168,000 July 2008 Convertible Note On July 21, 2008, the Company closed a financing of zero coupon, 12% interest, senior secured convertible promissory notes in the amount of US $2,428,160 with an aggregate purchase price of US $2,168,000 with four investors, one of which was the Company’s Chief Financial Officer.  The debt is convertible into common shares at the lesser of US $9.18 per share (unless the conversion price has been adjustedpursuant to further contract covenants) and 70% of the average of the five lowest closing bid prices for the ten preceding trading days.  The Company issued each purchaser in the private placement two warrants - one warrant redeemable by the Company and the other non-redeemable.  The non-redeemable warrants are exercisable at US $9.90 and permit the holder to purchase 264,506 common shares.  The redeemable warrants are exercisable at US $13.50 and permit the holder to purchase 132,253common shares.  Further, the Company issued 24,401 non-redeemable warrants, 12,201 redeemable warrants and US $160,000 in cash as transaction costs.  The warrants carry a term of five years from the date of closing of the financing.  The redeemable warrants may be redeemed by the Company at a price of US $0.18 per warrant only if certain conditions have been satisfied including the Company’s common shares having closed at $27.00 per share or greater for a period of 20 consecutivetrading days and the warrant holder being able to resell the shares acquired upon exercise through a resale registration statement or under Rule 144 of the United States Securities Act. During the year ended March 31, 2009, interest and accretion of the convertible debenture in the aggregate of US $1,326,959 was accrued on the principal balance of these convertible notes. Effective March 27, 2009, the Company settled these notes by: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Issuing a new promissory note with a face value of US $1,323,000 that accrues interest at 12% and is repayable by the Company any time until maturity on December 31, 2009 (Note 18); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Settlement of the non-cash portions of the convertible note including US $524,884 in prepayment penalty, US $260,160 in original issuer discounts, and US $371,771 in interest which includes the interest payable on the new note through December 31, 2009 for an aggregate settlement of US $1,156,815 and agreed to issue 2,892,036 common shares that will be restricted from trading and pooled until January1, 2010; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Repayment of US $400,000 to subscribers (cash paid May 11, 2009); and |
|--------|--------|-----------------------------------------------------------------------|

|   | · | Conversion of US $250,000 face value of the original note into 312,500 common shares of the Company (Note 14(c)). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

|   |   | The terms of the new US $1,323,000 promissory note include the following: |
|--------|--------|---------------------------------------------------------------------------|

|   | · | If the promissory note is not settled prior to the maturity date on December 31, 2009, the features of the new note revert to those of the convertible note it replaced; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | If prior to March 31, 2010, the Company issues common shares at a price less than the valuation of the shares issued to each note holder, the Company will issue to each note holder additional common shares based on the lower valuation. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10. | Convertible Notes (Continued) |
|-----|-------------------------------|

|   | (i) | US $2,168,000 July 2008 Convertible Note(Continued) Convertible notes are classified according to their components. The financial liability representing the obligation to make the interest payments is classified as a debt, and the equity components representing the conversion option and the warrants held by the holder are disclosed in shareholders’ equity under “Conversioncomponent of convertible notes” and “Contributed surplus”, respectively.  The conversion option which does not meet the definition of equity as it is convertible into a variable number of common shares, is disclosed as a derivative liability. The Company uses the relative fair value method to allocate the proceeds received to the various components. The fair value of the liability component of convertible debentures is obtained by discounting future interest and principal payments by using a rate equal to the rate of similar debentures having no conversion right, and the fair values of the conversion componentsand the detachable warrants are obtained using the Black-Scholes option pricing model. Interest expenditure related to the liability component is charged to operations, and the difference between the interest expenditure and its related disbursement representing the increase in the liability component value is credited to the convertible notes due to time-value of money. During the year ended March 31, 2009, the Company revised its presentation of the conversion option that did not meet the definition of equity to more accurately present these as derivative liabilities and has restated the financial statements for the year ended March 31, 2008.  This change in presentation had no material impact to the statement of operations. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.  | Related Party Transactions Amounts due to related parties are non-interest bearing and have no specific terms of repayment. Due to related parties includes the following amounts at March 31 in respect to certain of the transactions detailed below: |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                             |   | 2009   |    |   | 2008   |   |
|----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| (a)     Pagic                                                |   | $      | 0       |   |   | $      | 189,156 |   |
| (b)     CFO                                                  |   |   | 19,105  |   |   |   | 158,370 |   |
| (c)     Consulting services and unsecured loan advances      |   |   | 32,938  |   |   |   | 73,896 |   |
| (d)     Consulting services and unsecured loan advances |   |   | 30,882  |   |   |   | 1,000,165 |   |
| (e)     Advertising                                          |   |   | 0       |   |   |   | 52,145 |   |
| (f)     Operational management consulting                    |   |   | 103,720 |   |   |   | 16,784 |   |
|                                                                             |   |   |    |   |   |   |   |   |
|                                                                             |   | $      | 186,645 |   |   | $      | 1,490,516 |   |

----

----

| 11. | Related Party Transactions (Continued) Related party transactions are in the ordinary course of business and are measured at the exchange amount at the time the agreement is entered into or services are provided.  Related party transactions not disclosed elsewhere in these financial statements are as follows: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                              |   | 2009   |      |   | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| (a)    Pagic, a company related by a past common officer and director for:                                         |   |   |      |   |   |   |
| (i)       Net charges for product development expenses including royalties                          |   | $      | 301,948   |   |   | $      | 565,135 |   |
| (ii)      Issued 16,667 shares related to technology purchase                                            |   |   | 190,746   |   |   |   | 0 |   |
| (iii)     Commitment to issue 391,298 common shares for debt settlement                                       |   |   | 195,570   |   |   |   | 0 |   |
| (b)   The Company’s Chief Financial Officer (“CFO”) and director for:                                 |   |   |      |   |   |   |   |   |
| (i)       Charges for professional fees                                                             |   |   | 36,000    |   |   |   | 35,370 |   |
| (ii)      Exchange of balances for 12% convertible note (Note 10(i))                                     |   |   | 188,992   |   |   |   | 0 |   |
| (iii)     Net short-term advance, at 8-10% interest per annum                                                 |   |   | 52,605    |   |   |   | 150,000 |   |
| (iv)    Original issuer discount, prepayment penalty and interest prepaid through December 31, 2009           |   |   | 128,889   |   |   |   | 0 |   |
| (v)     Commitment to issue 1,085,690 common shares for debt settlement                                       |   |   | 370,087   |   |   |   | 0 |   |
| (c)   Charges from private companies with CFO and director in common for:                                               |   |   |      |   |   |   |   |   |
| (i)       Office rent                                                                               |   |   | 37,800    |   |   |   | 30,000 |   |
| (ii)      Consulting fee                                                                                 |   |   | 160,650   |   |   |   | 150,000 |   |
| (iii)     Unsecured loan advances                                                                             |   |   | 0         |   |   |   | 57,364 |   |
| (iv)    Commitment to issue 114,826 common shares                                                                  |   |   | 57,364    |   |   |   | 0 |   |
| (d)   West Peak and its principal shareholder, a beneficial owner of more than 5% of the Company’s common shares: |   |   |      |   |   |   |   |   |
| (i)       Unsecured loan advances, at 8% interest per annum                                    |   |   | 2,587,638 |   |   |   | 977,665 |   |
| (ii)      Consulting fees                                                                           |   |   | 653,290   |   |   |   | 52,500 |   |
| (iv)     Convertible notes purchased                                                                          |   |   | 85,460    |   |   |   | 162,305 |   |
| (v)      Exchange of amounts owed at March 31, 2009 forfuture issuance of 4,722,204 common shares   |   |   | 1,601,528 |   |   |   | 0 |   |
| (e)    Advertising services provided by a private company with a director in common                                |   |   | 0         |   |   |   | 244,861 |   |
| (f)     A director for:                                                                                       |   |   |      |   |   |   |   |   |
| (i)       Operational management consulting and investor relations services                    |   |   | 202,421   |   |   |   | 151,825 |   |
| (ii)      Commitment to issue 46,875 common shares                                                  |   |   | 23,428    |   |   |   | 0 |   |
| (g)   Bonus of 5,555 restricted common shares to a retiring director                                                    |   |   | 0         |   |   |   | 52,889 |   |
| (h)   A director for:                                                                                                   |   |   |      |   |   |   |   |   |
| (i)       Loans received/repaid during the year with 10%interest                               |   |   | 99,390    |   |   |   | 0 |   |
| (ii)      Convertible notes purchased                                                               |   |   | 91,893    |   |   |   | 0 |   |
| (iii)     Commitment to issue 183,860 common shares                                                      |   |   | 191,293   |   |   |   | 0 |   |

----

----

| 12.  | Commitments Commitments not disclosed elsewhere in these financial statements are as follows: The Company leases office and development space in Launceston, Cornwall, UK under a ten-year lease ending on November 15, 2017 at a quarterly cost of $24,020 (GB£12,550).  Fiscal yearly commitments are as follows: |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2010       |   | $      | 96,081  |   |
|------------|--------|--------|---------|--------|
| 2011       |   |   | 96,081  |   |
| 2012       |   |   | 96,081  |   |
| 2013       |   |   | 96,081  |   |
| 2014       |   |   | 96,081  |   |
| Thereafter |   |   | 348,295 |   |
|       |   | $      | 828,700 |   |

| 13.  | Long-Term Debt |
|-----------|----------------|

|                                                                                                                                                                                                                  |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                                  |   |   |   |   |   |   |
| Bank loan repayable in monthly instalments of US$2,336 including interest, due September 28, 2011, secured by a first charge on land and cash of $108,471 at March 31, 2008.  Interest at prime plus 0.25%. |   | $      | 0      |   |   | $      | 174,862 |   |
| Less:  Current portion                                                                                                                                                                                      |   |   | 0      |   |   |   | 16,250 |   |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                  |   | $      | 0      |   |   | $      | 158,612 |   |

|   | The Company fully repaid its long-term debt during the year ended March 31, 2009. |
|--------|-----------------------------------------------------------------------------------|

----

----

| 14.  | Share Capital |
|-----------|---------------|

|   | (a) | Authorized: |
|--------|-----|-------------|

|   | (b) | Issued and outstanding: The common share issuances consisted of the following transactions: |
|--------|-----|--------------------------------------------------------------------------------------------------|

|                                                            |   | Numberof Shares |      |   | Amount |   |
|-----------------------------------------------------------------|--------|-----------------|-----------|--------|--------|--------|
|                                                            |   |            |      |   |   |   |
|                                                            |   |            |      |   |   |   |
| Balance, as at March 31, 2007                                   |   |            | 1,703,670 |   |   | $      | 8,196,982 |   |
|                                                            |   |            |      |   |   |   |   |   |
| Private placement, net of share issue costs (i) and (ii)        |   |            | 473,486   |   |   |   | 5,081,103 |   |
| Issued for financial consulting services (iii)                  |   |            | 192,333   |   |   |   | 2,414,233 |   |
| Conversion of convertible notes (vi)                            |   |            | 41,542    |   |   |   | 323,392 |   |
| Reallocation of equity upon conversion of notes                 |   |            | 0         |   |   |   | 232,808 |   |
| Stock options exercised (v)                                     |   |            | 9,722     |   |   |   | 83,834 |   |
| Stock-based compensation for options exercised                  |   |            | 0         |   |   |   | 75,093 |   |
| Warrants exercised (iv)                                         |   |            | 38,883    |   |   |   | 283,837 |   |
|                                                            |   |            |      |   |   |   |   |   |
|                                                            |   |            | 755,966   |   |   |   | 8,494,300 |   |
|                                                            |   |            |      |   |   |   |   |   |
| Balance, as at March 31, 2008                                   |   |            | 2,459,636 |   |   |   | 16.691,282 |   |
|                                                            |   |            |      |   |   |   |   |   |
| Private placement, net of share issue costs (i)                 |   |            | 180,703   |   |   |   | 1,991,795 |   |
| Shares issued for promissory note interest (ii)                 |   |            | 5,555     |   |   |   | 65,333 |   |
| Issued for financial consulting services (iii)                  |   |            | 35,776    |   |   |   | 360,030 |   |
| Issued for technology license (iv)                              |   |            | 16,667    |   |   |   | 190,746 |   |
| Conversion of convertible notes (v)                             |   |            | 289,344   |   |   |   | 1,772,363 |   |
| Warrants exercised (vi)                                         |   |            | 21,296    |   |   |   | 203,990 |   |
| Reallocation from contributed surplus upon exercise of warrants |   |            | 0         |   |   |   | 71,869 |   |
| Reallocation of equity on conversion of convertible notes       |   |            | 0         |   |   |   | 610,108 |   |
|                                                            |   |            |      |   |   |   |   |   |
|                                                            |   |            | 549,341   |   |   |   | 5,266,234 |   |
|                                                            |   |            |      |   |   |   |   |   |
| Balance, as at March 31, 2009                                   |   |            | 3,008,977 |   |   | $      | 21,957,516 |   |

----

----

| 14. | Share Capital (Continued) |
|-----|---------------------------|

|   | (b)  | Issued and outstanding (Continued): During the year ended March 31, 2008, the Company: |
|--------|-----------|---------------------------------------------------------------------------------------------|

|   | (i) | Completed a private placement of units whereby a total of 465,549 units were issued at US $10.80 per unit for gross proceeds of US $5,029,636.  Each unit consists of one common share and one-half common share purchase warrant with each whole warrant exercisable at US $13.50 to purchase one common share.  The Company paid US $88,438 cash to consultants in connection with this private placement; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Completed a private placement of units whereby a total of 7,937 units were issued at US $12.60 per unit for gross proceeds of US $100,000.  Each unit consist of one common share and one-half common share purchase warrant with each whole warrant exercisable at US $15.30 to purchase an additional common share of the Company; |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Issued 192,333 shares in connection with seven financial consulting services agreements for administrative, investor relations, business and financial consulting services at an average deemed value of US $12.24 per share; |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Issued 38,883 common shares on exercise of 38,883 share purchase warrants at an average exercise price of US $7.20 per warrant; |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | Issued 9,722 common shares on exercise of 9,722 stock options at an exercise price of US $9.00 per option by a past director of the Company; and |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Issued 41,542 common shares upon conversion of US $275,000 of convertible notes, interest of US $4,521 and a registration penalty of US $11,668 from holders (Note 10). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | During the year ended March 31, 2009, the Company: |
|--------|--------|----------------------------------------------------|

|   | (i) | Completed a private placement of units whereby a total of 180,703 units were issued at US $10.80 per unit for gross proceeds of US $1,951,600.  Each unit consists of one common share and one-half common share purchase warrant with each whole warrant exercisable at US $13.50 to purchase an additional common share of the Company; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Issued 5,555 common shares in connection with interest charges regarding a promissory note at a fair value of $65,333; |
|--------|------|------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Issued the following common shares for consulting services: |
|--------|-------|-------------------------------------------------------------|

|   | · | 23,333 common shares in connection with two financial consulting services agreements for investor relations and product development services at an aggregate fair value of US $285,000; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 7,443 common shares for services rendered under a public relations agreement at a fair value of US $43,594; |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | 5,000 common shares for services rendered under an internet services contract at a fair value of US $16,500. |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | (iv) | Issued 16,667 common shares valued at US $180,000 ($190,746) to Pagic relating to the Technology License (Note 8); |
|--------|------|--------------------------------------------------------------------------------------------------------------------|

|   | (v) | Issued 289,344 common shares upon conversion of US $1,597,609 of convertible note principal, interest and penalties to convertible debenture holders; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Issued 21,296 common shares upon the exercise of 21,296 warrants at US $9.00 per share. |
|--------|------|-----------------------------------------------------------------------------------------|

----

----

| 14. | Share Capital (Continued) |
|-----|---------------------------|

|   | (c) | Commitment to Issue Shares: In conjunction with certain restructuring initiatives, effective March 27, 2009, the Company entered into a series of debt settlement agreements whereby it agreed to issue restricted common shares in settlement of convertible debentures, debenture related interest, original issuer discounts, prepayment penalties, future interest, certain accounts payable and related party amounts owing, certain advances, unpaid finders’ fees and demand and term promissory notes.  An aggregateof US $10,806,780 representing these balances was settled in exchange for 29,516,951 common shares issued on May 11, 2009.  Included in these shares are 24,232,816 common shares which are subject to pooling restrictions with quarterly equal releases beginning on January 1, 2010, and a further 2,634,135 common shares are subject to pooling restrictions until January 1, 2010. Also included in commitment to issue shares as at March 31, 2009 is the conversion of US$250,000 of convertible notes into 312,500 common shares which were issued on May 9, 2009. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Stock options The Company has a stock option plan (“Plan”) that allows for stock options to be issued to employees, directors, officers and consultants on both a qualified and non-qualified basis. The aggregate number of common shares as to which options and bonuses may be granted from time to time under the Plan shall not exceed 20% of the Company’s issued and outstanding number of common shares and the numberof common shares as to which options and bonuses may be granted under the US incentive portion of the Plan shall not exceed 17% of the Company’s issued and outstanding common shares. The  Plan provides that the terms of the options and the option prices shall be fixed by the board of directors or committee and subject to the requirements of the exchange on which the Company’s common shares are traded or any other governing regulatory body, at the time of exercise. Options granted shall expireafter a period of five years or terminate three months after the recipient ceases to be an employee of the Company. The following summarizes stock option activity for the years ended March 31, 2009 and 2008. Effective March 31, 2009, the Company cancelled all outstanding stock options in conjunction with restructuring initiatives. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | Numberof Options |     |   | WeightedAverageUS ExercisePrice |   |
|-------------------------------------|--------|------------------|----------|--------|---------------------------------|--------|
|                                |   |             |     |   |                            |   |
| Options outstanding, March 31, 2007 |   |             | 213,056  |   |                            | $      | 10.44 |   |
| Granted                             |   |             | 139,722  |   |                            | $      | 12.42 |   |
| Forfeited                           |   |             | (13,056  | )      |                            | $      | 10.80 |   |
| Exercised                           |   |             | (9,722   | )      |                            | $      | 9.00 |   |
|                                |   |             |     |   |                            |   |   |   |
| Options outstanding, March 31, 2008 |   |             | 330,000  |   |                            | $      | 11.34 |   |
|                                |   |             |     |   |                            |   |   |   |
| Granted                             |   |             | 24,444   |   |                            | $      | 9.90 |   |
| Forfeited                           |   |             | (58,611  | )      |                            | $      | 11.24 |   |
| Exercised                           |   |             | 0        |   |                            | $      | 0 |   |
| Cancelled                           |   |             | (295,833 | )      |                            | $      | 11.16 |   |
|                                |   |             |     |   |                            |   |   |   |
| Options outstanding, March 31, 2009 |   |             | 0        |   |                            | $      | 0 |   |
|                                |   |             |     |   |                            |   |   |   |

----

----

| 14. | Share Capital (Continued) |
|-----|---------------------------|

|   | (d) | Stock options (Continued) As at March 31, 2009 and 2008, the following stock options were outstanding: |
|--------|-----|-------------------------------------------------------------------------------------------------------------|

|              |   |              |   |   | 2009              |   |   | 2008        |   |
|-------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------|--------|
| Expiry Date       |   | US Exercise Price |   |   | Number of Options |   |   | Exercisable |   |   | Number of Options |   |   | Exercisable |   |
|              |   |              |   |   |              |   |   |        |   |   |   |   |   |   |   |
| December 31, 2008 |   | $                 | 9.00   |   |              |   | 0      |        |   |   | 0 |   |   |   | 6,946 |   |   |   | 6,945 |   |
| March 22, 2009    |   | $                 | 10.80  |   |              |   | 0      |        |   |   | 0 |   |   |   | 27,777 |   |   |   | 16,666 |   |
| November 10, 2009 |   | $                 | 10.80  |   |              |   | 0      |        |   |   | 0 |   |   |   | 36,112 |   |   |   | 25,000 |   |
| March 1, 2010     |   | $                 | 18.00  |   |              |   | 0      |        |   |   | 0 |   |   |   | 4,167 |   |   |   | 4,167 |   |
| April 1, 2010     |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 33,333 |   |   |   | 0 |   |
| April 9, 2010     |   | $                 | 14.40  |   |              |   | 0      |        |   |   | 0 |   |   |   | 2,777 |   |   |   | 2,777 |   |
| June 30, 2010     |   | $                 | 10.80  |   |              |   | 0      |        |   |   | 0 |   |   |   | 11,112 |   |   |   | 11,112 |   |
| October 2, 2010   |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 11,112 |   |   |   | 0 |   |
| October 10, 2010  |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 16,666 |   |   |   | 16,666 |   |
| December 20, 2010 |   | $                 | 10.80  |   |              |   | 0      |        |   |   | 0 |   |   |   | 16,666 |   |   |   | 16,666 |   |
| October 10, 2011  |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 41,666 |   |   |   | 41,666 |   |
| February 21, 2011 |   | $                 | 9.90   |   |              |   | 0      |        |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
| December 13, 2011 |   | $                 | 9.90   |   |              |   | 0      |        |   |   | 0 |   |   |   | 91,666 |   |   |   | 91,666 |   |
| December 20, 2011 |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 8,612 |   |   |   | 8,612 |   |
| March 21, 2012    |   | $                 | 10.80  |   |              |   | 0      |        |   |   | 0 |   |   |   | 16,666 |   |   |   | 16,666 |   |
| March 31, 2012    |   | $                 | 12.60  |   |              |   | 0      |        |   |   | 0 |   |   |   | 4,722 |   |   |   | 4,722 |   |
|              |   |              |   |   |              |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|              |   |              |   |   |              |   | 0      |        |   |   | 0 |   |   |   | 330,000 |   |   |   | 263,331 |   |

|   |   | As at March 31, 2008, the weighted average remaining contractual life of outstanding options is 2.77 years.During the year ended March 31, 2009, 24,444 (2008 - 139,722) stock options were granted to directors, officers, employees and consultants.  The fair value of these stock options is recognized as a stock-based compensation expense over the vesting period of the options.  The total fair value of these stock optionswas calculated at $121,530 (2008 - $1,020,687), all of which was recognized as stock-based compensation during the year ended March 31, 2009 (2008 - $807,687). Stock-based compensation expense includes $139,000 for the fair value of options granted in fiscal 2008, which vested in fiscal 2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 14. | Share Capital (Continued) |
|-----|---------------------------|

|   | (d) | Stock options (Continued) Total stock-based compensation expense was $334,530 (2008 - $990,305).  The fair value of stock options granted and the issue of finders’ warrants are calculated using the Black-Scholes option pricing model with the following weighted average assumptions: |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  |   | 2009   |   |   | 2008   |   |
|-----------------------|--------|--------|--------|--------|--------|--------|
|                  |   |   |   |   |   |   |
| Expected life (years) |   |   | 5      |   |   |   | 2 - 5 |   |
| Interest rate         |   |   | 2.95   | %      |   |   | 4.17 | % |
| Volatility            |   |   | 80.00  | %      |   |   | 94.91 | % |
| Dividend yield        |   |   | 0.00   | %      |   |   | 0.00 | % |

|   | (e) | Warrants Each of the Company’s share purchase warrants is exercisable into one common share. The following summarizes warrants activity for the years ended March 31, 2009 and 2008: |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Number of Warrants |      |   | WeightedAverageUS Price |   |
|------------------------------------------------------|--------|--------------------|-----------|--------|-------------------------|--------|
|                                                 |   |               |      |   |                    |   |
| Warrants outstanding and exercisable, March 31, 2007 |   |               | 652,990   |   |                    | $      | 13.14 |   |
| Granted                                              |   |               | 261,019   |   |                    | $      | 17.64 |   |
| Exercised                                            |   |               | (38,883   | )      |                    | $      | 7.38 |   |
|                                                 |   |               |      |   |                    |   |   |   |
| Warrants outstanding and exercisable, March 31, 2008 |   |               | 875,126   |   |                    | $      | 13.32 |   |
| Granted                                              |   |               | 581,869   |   |                    | $      | 11.62 |   |
| Exercised                                            |   |               | (21,296   | )      |                    | $      | 9.00 |   |
| Expired                                              |   |               | (286,183  | )      |                    | $      | 9.66 |   |
|                                                 |   |               |      |   |                    |   |   |   |
| Warrants outstanding and exercisable, March 31, 2009 |   |               | 1,149,516 |   |                    | $      | 12.38 |   |

----

----

| 14.  | Share Capital (Continued) |
|-----------|---------------------------|

|   | (e) | Warrants (Continued) As at March 31, the following share purchase warrants were outstanding: |
|--------|-----|---------------------------------------------------------------------------------------------------|

| Expiry Date       |   | US Exercise Price |   |   | 2009Number ofWarrants |   |      | 2008Number of Warrants |   |
|-------------------|--------|-------------------|--------|--------|-----------------------|--------|-----------|------------------------|--------|
|              |   |              |   |   |                  |   |      |                   |   |
| July 25, 2008     |   | $                 | 9.00   |   |                  |   | 0         |                   |   |   | 41,259 |   |
| August 5, 2008    |   | $                 | 9.00   |   |                  |   | 0         |                   |   |   | 16,798 |   |
| December 11, 2008 |   | $                 | 12.60  |   |                  |   | 0         |                   |   |   | 24,198 |   |
| December 11, 2008 |   | $                 | 9.00   |   |                  |   | 0         |                   |   |   | 7,500 |   |
| December 31, 2008 |   | $                 | 14.40  |   |                  |   | 0         |                   |   |   | 92,051 |   |
| December 31, 2008 |   | $                 | 18.00  |   |                  |   | 0         |                   |   |   | 43,866 |   |
| December 31, 2008 |   | $                 | 13.50  |   |                  |   | 0         |                   |   |   | 23,652 |   |
| April 6, 2009     |   | $                 | 7.20   |   |                  |   | 55,221    |                   |   |   | 28,519 |   |
| April 6, 2009     |   | $                 | 16.20  |   |                  |   | 91,605    |                   |   |   | 40,864 |   |
| April 6, 2009     |   | $                 | 9.00   |   |                  |   | 3,629     |                   |   |   | 3,629 |   |
| April 6, 2009     |   | $                 | 13.50  |   |                  |   | 10,215    |                   |   |   | 10,215 |   |
| April 6, 2009     |   | $                 | 11.70  |   |                  |   | 6,089     |                   |   |   | 6,089 |   |
| April 9, 2009     |   | $                 | 7.20   |   |                  |   | 0         |                   |   |   | 26,703 |   |
| April 9, 2009     |   | $                 | 16.20  |   |                  |   | 0         |                   |   |   | 50,741 |   |
| April 23, 2009    |   | $                 | 13.50  |   |                  |   | 46,296    |                   |   |   | 46,296 |   |
| May 24, 2009      |   | $                 | 13.50  |   |                  |   | 12,407    |                   |   |   | 12,407 |   |
| July 10, 2009     |   | $                 | 13.50  |   |                  |   | 2,917     |                   |   |   | 2,917 |   |
| October 9, 2009   |   | $                 | 13.50  |   |                  |   | 33,796    |                   |   |   | 33,796 |   |
| December 1, 2009  |   | $                 | 9.00   |   |                  |   | 111,111   |                   |   |   | 111,111 |   |
| December 1, 2009  |   | $                 | 18.00  |   |                  |   | 111,111   |                   |   |   | 111,111 |   |
| December 18, 2009 |   | $                 | 13.50  |   |                  |   | 130,492   |                   |   |   | 130,492 |   |
| February 19, 2010 |   | $                 | 13.50  |   |                  |   | 6,944     |                   |   |   | 6,944 |   |
| March 21, 2010    |   | $                 | 15.30  |   |                  |   | 3,968     |                   |   |   | 3,968 |   |
| May 1, 2010       |   | $                 | 13.50  |   |                  |   | 83,241    |                   |   |   | 0 |   |
| June 6, 2010      |   | $                 | 13.50  |   |                  |   | 5,418     |                   |   |   | 0 |   |
| July 22, 2010     |   | $                 | 13.50  |   |                  |   | 1,695     |                   |   |   | 0 |   |
| July 20, 2013     |   | $                 | 9.90   |   |                  |   | 288,907   |                   |   |   | 0 |   |
| July 20, 2013     |   | $                 | 12.60  |   |                  |   | 144,454   |                   |   |   | 0 |   |
|              |   |              |   |   |                  |   |      |                   |   |   |   |   |
| Total             |   |              |   |   |                  |   | 1,149,516 |                   |   |   | 875,126 |   |

----

----

| 14. | Share Capital (Continued) |
|-----|---------------------------|

|   | (e) | Warrants (Continued) On July 15, 2008, the Company amended the terms of certain warrants issued previously as part of various private placements. 77,444 warrants exercisable at US$7.20 to US$18.00 per share expiring in July 2008 were extended to April 9, 2009 and 159,573 warrants expiring in July and August 2008 were extended to December 31, 2008.  The Company applies the fair value method using Black-Scholes option pricingmodel in accounting for warrants utilizing a risk free interest rate of 1.8% and expected volatility of 64%.  The warrant extensions resulted in additional compensation expense of $181,048 which was charged to expenses with a corresponding credit to contributed surplus. These warrants have expired unexercised. In addition, warrants expiring in April through July 2009 expired unexercised. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Contributed surplus |
|--------|-----|---------------------|

|                                                |   | 2009   |      |   | 2008   |   |
|-----------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                |   |   |      |   |   |   |
| Contributed surplus, beginning of year              |   | $      | 4,203,394 |   |   | $      | 3,253,333 |   |
| Equity component upon repayment of convertible debt |   |   | 21,999    |   |   |   | 0 |   |
| Issuance of warrants on convertible debentures      |   |   | 867,117   |   |   |   | 34,849 |   |
| Warrant modifications during the year               |   |   | 181,048   |   |   |   | 0 |   |
| Stock-based compensation expense for year           |   |   | 260,530   |   |   |   | 990,305 |   |
| Warrants exercised during the year                  |   |   | (71,869   | )      |   |   |   |   |
| Stock options exercised during the year             |   |   | 0         |   |   |   | (75,093 | ) |
|                                                |   |   |      |   |   |   |   |   |
| Contributed surplus, end of year                    |   | $      | 5,462,219 |   |   | $      | 4,203,394 |   |

| 15.  | Income Taxes The tax effects of the temporary differences that give rise to the Company’s future tax assets and liabilities are as follows: |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   | 2009   |       |   | 2008   |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                |   |   |       |   |   |   |
| Future income tax assets                            |   |   |       |   |   |   |
| Non-capital losses carried forward                  |   | $      | 8,479,729  |   |   | $      | 4,593,497 |   |
| Net capital losses carried forward                  |   |   | 186,646    |   |   |   | 186,646 |   |
| Property and equipment tax values in excess of book |   |   | 238,075    |   |   |   | 7,080 |   |
| Other deductible amounts                            |   |   | 62,729     |   |   |   | 40,337 |   |
|                                                |   |   |       |   |   |   |   |   |
| Total future tax assets                             |   |   | 8,967,179  |   |   |   | 4,827,560 |   |
| Valuation allowance                                 |   |   | (8,967,179 | )      |   |   | (4,827,560 | ) |
|                                                |   |   |       |   |   |   |   |   |
| Future income tax assets, net                       |   | $      | 0          |   |   | $      | 0 |   |

|   | The Company has non-capital losses available to offset future taxable income in Canada, the United States and the United Kingdom amounting to approximately, $13,900,000 expiring through 2029, $13,000,000 expiring through 2029, and $1,960,000 available for indefinite carryforward, respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 15. | Income Taxes (Continued) The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and this causes a change in management’s judgment about the recoverability of future tax assets, the impact of the change in the valuation allowance will be reflected in current income. The future tax benefits of these and other amounts have not been recognized in the consolidatedfinancial statements as their realization is not more likely than not. The reconciliation of income tax provision computed at statutory rates of 30.75% (2008: 33.33%) to the reported income tax provision is as follows: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                    |   | 2009   |       |   | 2008   |   |
|---------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                    |   |   |       |   |   |   |
|                                                    |   |   |       |   |   |   |
|                                                    |   |   |       |   |   |   |
| Income tax benefit computed at Canadian statutory rates |   | $      | 5,490,000  |   |   | $      | 4,071,000 |   |
| Temporary differences not recognized                    |   |   | (937,000   | )      |   |   | (8,000 | ) |
| Permanent differences not deductible                    |   |   | (80,000    | )      |   |   | (1,499,000 | ) |
| Foreign tax rate difference                             |   |   | 37,000     |   |   |   | 0 |   |
| Income tax rate changes                                 |   |   | (353,000   | )      |   |   | (37,000 | ) |
| Unrecognized tax losses                                 |   |   | (4,157,000 | )      |   |   | (2,527,000 | ) |
|                                                    |   |   |       |   |   |   |   |   |
|                                                    |   | $      | 0          |   |   | $      | 0 |   |

| 16.  | Product Development Costs As the Company is in the development stage, test sales are credited to development costs. During the year ended March 31, 2009, the Company had test sales of $219,483 (2008 - $985,779) related to the Nova Skincare System. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 17. | Segmented Information Operating segments are defined as components of an enterprise about which separate financial information is available, which is evaluated regularly by management in deciding how to allocate resources and in assessing performance.  All of the Company’s operations are in the research, product development and resale sectors.  The Company’s product development, research and resale operations are focused in the United States and, on a secondary basis, in the UnitedKingdom whereby management of the Company is responsible for business results and the operational decision making. Canadian operations are core to administration and finance functions.  The Company’s operations are, therefore, segmented on a geographic basis. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                |   | United States |      |   | United Kingdom |   |      | Canada |   |   | Consolidated |   |
|---------------------|--------|---------------|-----------|--------|----------------|--------|-----------|--------|--------|--------|--------------|--------|
|                |   |          |      |   |           |   |      |   |   |   |         |   |
| March 31, 2009      |   |          |      |   |           |   |      |   |   |   |         |   |
| Segmented revenue   |   | $             | 0         |   |           | $      | 0         |   |   | $      | 0            |   |   | $ | 0 |   |
| Segmented loss      |   | $             | 6,113,583 |   |           | $      | 1,217,895 |   |   | $      | 10,524,012   |   |   | $ | 17,855,490 |   |
| Identifiable assets |   | $             | 722,809   |   |           | $      | 532,631   |   |   | $      | 1,096,523    |   |   | $ | 2,351,963 |   |
|                |   |          |      |   |           |   |      |   |   |   |         |   |   |   |   |   |
| March 31, 2008      |   |          |      |   |           |   |      |   |   |   |         |   |   |   |   |   |
| Segmented revenue   |   | $             | 0         |   |           | $      | 0         |   |   | $      | 0            |   |   | $ | 0 |   |
| Segmented loss      |   | $             | 5,432,464 |   |           | $      | 757,819   |   |   | $      | 6,522,075    |   |   | $ | 12,712,358 |   |
| Identifiable assets |   | $             | 1,979,342 |   |           | $      | 518,932   |   |   | $      | 2,107,640    |   |   | $ | 4,605,914 |   |

| 18.  | Promissory Notes Payable As at March 31, 2009, promissory notes payable consists of the following due to third party lenders: |
|-----------|------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                          |   | 2009   |      |   | 2008   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                          |   |   |      |   |   |   |
| 7% simple interest, US$100,000 promissory note payable, unsecured, due on demand              |   | $      | 0         |   |   | $      | 115,971 |   |
| 10% simple interest, US$150,000 promissory note payable, unsecured, due May 15, 2008          |   |   | 0         |   |   |   | 154,196 |   |
| 12% simple interest, US$1,323,000 note payable,  due December 31, 2009 (Note 10(i)) |   |   | 1,473,060 |   |   |   | 0 |   |
| 10% simple interest, US$500,000 subscription advance, unsecured, due August 31, 2009          |   |   | 630,650   |   |   |   | 0 |   |
| Mandatorily convertible note, to be converted upon achievement of 18:1 common share rollback  |   |   | 35,284    |   |   |   | 0 |   |
| 12% simple interest, US$400,000 note payable, unsecured, due on demand (Note 10(i))           |   |   | 504,520   |   |   |   | 0 |   |
|                                                                                          |   |   |      |   |   |   |   |   |
|                                                                                          |   | $      | 2,643,514 |   |   | $      | 270,167 |   |

----

----

| 18. | Promissory Notes Payable (Continued) During the year ended March 31, 2009, the Company repaid the principal and accrued interest and in addition, committed to issue 5,555 common shares in full settlement of two promissory notes which were outstanding at March 31, 2008. On March 26, 2009, the Company entered into a subscription agreement for an investment of up to US$2,000,000 convertible into units. The subscription funds bear interest at 10% (at the rate of US$0.125 per unit on the date upon which the Company effects a share consolidation).  Each unit consists of one restricted common share and one-third share purchase warrant with each wholewarrant exercisable into one common share at an exercise price of US$0.45 per share for a one year term from the date of issue.  The warrants may be exercised on a cashless basis. As at March 31, 2009, the Company had received US$500,000 ($630,650) which has been reflected as a promissory note payable in the financial statements. During the year ended March 31, 2009, the Company accrued US$685 interest on the principal balance of this advance. On May 22, 2009, the balance of US$1,500,000 was received. The Company completed the share consolidation on July 16, 2009, and on July 17, 2009, issued 16,303,562 common shares pursuant to the conversion of US$2,000,000 in subscription advances and interest of US$37,945 and also issued 5,434,521 warrants to purchase 5,434,521 common shares at an exercise price of US$0.45 per share expiring July 18, 2010. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 19.  | Subsequent Events Subsequent events not disclosed elsewhere in these financial statements are as follows: |
|-----------|----------------------------------------------------------------------------------------------------------------|

|   | (a) | On April 1, 2009 through June 22, 2009, the Company received subscriptions to a 10% convertible promissory note in the aggregate of US$176,240. The note and accrued interest have been converted into units at the rate of US$0.40 per unit.  Each unit consists of one restricted common share and one share purchase warrant to purchase an additional restricted common share at an exercise price of US$0.60 pershare for a two year term from the date of conversion. On July 17, 2009, the Company issued 458,139 common shares pursuant to the conversion of US$179,478 in convertible notes and accrued interest of US$3,777, and also issued 458,139 warrants to purchase 458,139 common shares at an exercise price of US$0.60 per share until July 17, 2011; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | On July 31, 2009, the Company issued an aggregate of 75,000 common shares valued at US$43,500 pursuant to obligations under a public relations agreement and an internet based services agreement. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 20. | Generally Accepted Accounting Principles in Canada and the United States Reconciliation of Net Loss Under Canadian GAAP to US GAAP The effect of the material measurement differences between generally accepted accounting principles in Canada and the United States on the Company’s net loss is summarized as follows: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|--------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                   |   |   |       |   |   |   |       |   |   |
| Net loss under Canadian GAAP                           |   | $      | 17,855,490 |   |   | $      | 12,712,358 |   |   | $ | 8,138,393 |   |
| Add (deduct):                                          |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest and accretion expense (Note 20(b))            |   |   | 2,338,048  |   |   |   | 399,496    |   |   |   | 1,463,628 |   |
| Debt issue costs (Note 20(c))                          |   |   | 94,568     |   |   |   | 135,733    |   |   |   | 108,696 |   |
| Product development (Note 20(d))                       |   |   | (1,409,883 | )      |   |   | (1,878,438 | )      |   |   | (420,670 | ) |
| Net loss of interest in joint venture (Note 20(d))     |   |   | 1,409,883  |   |   |   | 1,878,438  |   |   |   | 420,670 |   |
| Gain on settlement of debt (Note 20(b))                |   |   | (1,962,970 | )      |   |   | 0          |   |   |   | 0 |   |
| Foreign exchange gain/loss (Note 20(b))           |   |   | (324,995   | )      |   |   | 45,301     |   |   |   | 38,622 |   |
|                                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Net loss and comprehensive loss under US GAAP          |   | $      | 18,000,141 |   |   | $      | 13,292,888 |   |   | $ | 9,749,339 |   |
|                                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Loss per share under US GAAP – basic and diluted |   | $      | (6.47      | )      |   | $      | (6.73      | )      |   | $ | (9.11 | ) |
| Weighted average number of shares - US GAAP            |   |   | 2,782,284  |   |   |   | 1,974,763  |   |   |   | 1,070,066 |   |
|                                                   |   |   |       |   |   |   |       |   |   |   |   |   |

----

----

| 20. | Generally Accepted Accounting Principles in Canada and the United States (Continued) Presentation of Balance Sheets Under Canadian and United States GAAP Balance sheets under Canadian GAAP and US GAAP are as follows: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   | 2009         |        |   | 2008   |   |
|--------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|
|                                                   |   | CanadianGAAP |        |   | USGAAP |   |   | CanadianGAAP |   |   | USGAAP |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |
| Assets                                                 |   |         |        |   |   |   |   |   |   |   |   |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |
| Current                                                |   |         |        |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                              |   | $            | 224,769     |   |   | $      | 224,769 |   |   | $ | 163,437 |   |   | $ | 163,437 |   |
| Accounts receivable                                    |   |         | 920,235     |   |   |   | 920,235 |   |   |   | 462,156 |   |   |   | 462,156 |   |
| Prepaid expenses                                       |   |         | 102,670     |   |   |   | 102,670 |   |   |   | 2,119,546 |   |   |   | 2,119,546 |   |
| Inventories                                            |   |         | 34,072      |   |   |   | 34,072 |   |   |   | 617,195 |   |   |   | 617,195 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         | 1,281,746   |   |   |   | 1,281,746 |   |   |   | 3,362,334 |   |   |   | 3,362,334 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted cash                                        |   |         | 0           |   |   |   | 0 |   |   |   | 108,471 |   |   |   | 108,471 |   |
| Debt issue costs (Note 20(c))                          |   |         | 0           |   |   |   | 0 |   |   |   | 0 |   |   |   | 94,568 |   |
| Property and equipment                                 |   |         | 1,070,216   |   |   |   | 1,070,216 |   |   |   | 1,135,108 |   |   |   | 1,135,108 |   |
| Product license                                        |   |         | 1           |   |   |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   | $            | 2,351,963   |   |   | $      | 2,351,963 |   |   | $ | 4,605,914 |   |   | $ | 4,700,482 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Deficiency               |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                                                |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities               |   | $            | 541,802     |   |   | $      | 541,802 |   |   | $ | 536,563 |   |   | $ | 536,563 |   |
| Current portion of long-term debt                      |   |         | 0           |   |   |   | 0 |   |   |   | 16,250 |   |   |   | 16,250 |   |
| Promissory notes payable                               |   |         | 2,643,514   |   |   |   | 2,643,514 |   |   |   | 270,167 |   |   |   | 270,167 |   |
| Due to related parties                                 |   |         | 186,645     |   |   |   | 186,645 |   |   |   | 1,490,516 |   |   |   | 1,490,516 |   |
| Convertible notes (Note 20(b))                         |   |         | 11,228      |   |   |   | 11,228 |   |   |   | 5,202,741 |   |   |   | 5,389,387 |   |
|                                                   |   |         | 0           |   |   |   | 0 |   |   |   | 940,537 |   |   |   | 0 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         | 3,383,189   |   |   |   | 3,383,189 |   |   |   | 8,456,774 |   |   |   | 7,702,883 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt                                         |   |         | 0           |   |   |   | 0 |   |   |   | 158,612 |   |   |   | 158,612 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         | 3,383,189   |   |   |   | 3,383,189 |   |   |   | 8,615,386 |   |   |   | 7,861,495 |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders' Equity (Deficiency)                      |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share capital (Note 20(b))                             |   |         | 21,957,516  |   |   |   | 22,070,991 |   |   |   | 16,691,282 |   |   |   | 16,866,115 |   |
| Contributed surplus (Note 20(b))                       |   |         | 5,462,219   |   |   |   | 10,766,950 |   |   |   | 4,203,394 |   |   |   | 9,097,348 |   |
| Commitment to issue shares (Note 20(b))                |   |         | 16,955,228  |   |   |   | 13,255,450 |   |   |   | 0 |   |   |   | 0 |   |
| Conversion component of convertible notes (Note 20(b)) |   |         | 4,310       |   |   |   | 0 |   |   |   | 2,650,861 |   |   |   | 0 |   |
| Accumulated deficit from prior operations              |   |         | (3,237,370  | )      |   |   | (3,237,370 | ) |   |   | (3,237,370 | ) |   |   | (3,237,370 | ) |
| Accumulated deficit during the development stage       |   |         | (42,173,129 | )      |   |   | (43,887,247 | ) |   |   | (24,317,639 | ) |   |   | (25,887,106 | ) |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |         | (1,031,226  | )      |   |   | (1,031,226 | ) |   |   | (4,009,472 | ) |   |   | (3,161,013 | ) |
|                                                   |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   | $            | 2,351,963   |   |   | $      | 2,351,963 |   |   | $ | 4,605,914 |   |   | $ | 4,700,482 |   |

----

----

| 20. | Generally Accepted Accounting Principles in Canada and the United States (Continued) |
|-----|--------------------------------------------------------------------------------------|

|   | (a)  | Recently Adopted Accounting Pronouncements |
|--------|-----------|--------------------------------------------|

|   | (i)  | Fair Value Measurements In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 157, “Fair Value Measurements” (“SFAS No. 157”). The standard defines fair value, establishes a framework for measuring fair value in US GAAP, and expands disclosure about fair value measurements. Thisstandard does not require any new fair value measurements. In February 2008, the FASB issued FASB Staff Position No.157-2 (“FSP No. 157-2”), which delays the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. During the year ended March 31, 2009, the Company adopted SFAS No. 157 for financial assets and liabilitiesrecognized at fair value on a recurring basis. The adoption did not have a material effect on the Company’s financial results. The disclosures required by SFAS No. 157 for financial assets and liabilities measured at fair value on a recurring basis as at March 31, 2009 are included in Note 20(e).The Company will apply the requirements of SFAS No. 157 for fair value measurements of financial and nonfinancial assets and liabilities not valued on a recurring basis for its fiscal year commencing April 1, 2009. The Company is currently evaluating the effect of this application on its financial reporting and disclosures.On October 10, 2008, the FASB issued FSP No.157-3 , which clarifies the application of SFAS No.157 in determining the fair value of a financial asset when the market for that asset is not active. SFAS No.157-3 is effective as of the issuance date and has not affected the valuation of the Company’s financial assets. |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii)  | The Fair Value Option for Financial Assets and Financial Liabilities In February 2007, the FASB issued SFAS No. 159, “Fair Value Option for Financial Assets and Financial Liabilities” which allows an irrevocable option, the Fair Value Option, to carry eligible financial assets and liabilities at fair value. The election is made on an instrument-by-instrument basis. Changes in fair valuefor these instruments are recorded in earnings. The objective of SFAS No. 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.The Company applied SFAS No. 159 prospectively during the year ended March 31, 2009 and has not adopted the Fair Value Option for any of its eligible financial instruments. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Convertible Notes Under Canadian GAAP, the principal amount of financial liabilities convertible in common shares of an entity are bifurcated between its liability and equity components. The liability component commonly consists of an entity’s obligation to make principal and interest payments while the equity component consists of the debtor’soption to convert the financial liability into common shares of the entity. The Company follows the relative fair value method of bifurcation under which the principal amount is allocated to the liability and equity components based on the pro-rata values of the debt and the conversion option.  The liability component of the convertible notes is accreted over its estimated life to the principal amount using the effective interest method. Upon conversion of the financial liability to common shares ofthe entity, the difference between the carrying value of the liability component and the principal amount, if any, is recognized in income as interest expense and the principal amount and equity component are transferred to share capital. Should the debtor’s option to convert the financial liability into common shares of the entity expire unexercised, the equity component is transferred to contributed surplus.  To the extent that the embedded conversion option does not meet the definition of equityit is presented as a derivative liability. In the event that convertible debt is settled with common shares, the Company uses the fair value of the remaining liability to determine the gain or loss on settlement. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 20. | Generally Accepted Accounting Principles in Canada and the United States (Continued) |
|-----|--------------------------------------------------------------------------------------|

|   | (b) | Convertible Notes (Continued) Under US GAAP, the principal amount of financial liabilities convertible in common shares of an entity are not bifurcated between its liability and equity components unless the debtor’s option to convert the financial liability into common shares of the entity is in-the-money on the date of issuance, which results in a beneficialconversion feature. The value of the beneficial conversion feature, calculated on an intrinsic value basis, is classified in equity and presented as additional paid-in-capital, the US GAAP equivalent of contributed surplus, unless the embedded conversion feature meets the definition of a derivative in which case it is fair valued and presented as a derivative liability. The difference between the principal amount of a financial liability and the value of the beneficial conversion feature is classified in liabilities.The discounted financial liability is accreted over its estimated life to the principal amount using the effective interest method. Upon conversion of the financial liability to common shares of the entity, the difference between the carrying value of the financial liability and the principal amount, if any, is recognized in income as interest expense and the principal amount and amount of the beneficial conversion feature are transferred to share capital. In the event that the convertible debt is settled withcommon shares, the Company uses the fair value of the common shares issued to determine the gain or loss on settlement. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c)  | Debt Issue Costs Under Canadian GAAP, an entity may make an accounting policy choice to either defer transaction costs that are directly attributable to the issue of a financial liability classified as other than held for trading or to recognize all transaction costs in net income as incurred. The Company’s accounting policy is to recognize alltransaction costs in net income as incurred. Under US GAAP, transaction costs that are directly attributable to the issue of a financial liability are deferred and amortized on a straight-line basis over the life of the financial liability |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d)  | Proportionate Consolidation Under Canadian GAAP, the accounts of joint ventures are proportionately consolidated while US GAAP requires investments in joint ventures are accounted for under the equity method. Under Canadian GAAP, the Company has classified amounts advanced to and expended by its Vertigro joint venture of $1,409,883 (2008 - $1,878,438; 2007 - $420,670) as product development in its statement of operations. Under US GAAP,these amounts are classified as net loss from interest in joint venture. This difference does not have a material effect on the Company's balance sheet.  Additional information concerning the Company’s interests in a joint venture is presented in Note 8. |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e)  | Fair Value Disclosures Our financial assets and liabilities are measured at fair value on a recurring basis and classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There are three levels of fair value hierarchy that prioritize the inputs to valuation techniques used to measure fair value, withlevel 1 inputs having the highest priority.The levels and the valuation techniques used to value the Company’s financial assets and liabilities are described below: |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 1 - | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Cash equivalents, including demand deposits and money market instruments, are valued using quoted market prices. |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 20. | Generally Accepted Accounting Principles in Canada and the United States (Continued) |
|-----|--------------------------------------------------------------------------------------|

|   | (e)  | Fair Value Disclosures (Continued) |
|--------|-----------|------------------------------------|

|   | Level 2 -  | Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Derivative instruments are included in level 2 of the fair value hierarchy as they are valued usingpricing models or discounted cash flow models. These models require a variety of inputs, including, but not limited to, contractual terms, market prices, forward price curves, yield curves, and credit spreads. These inputs are obtained from or corroborated with the market where possible. |
|--------|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 - | Unobservable (supported by little or no market activity) prices. When applicable, the Company reviews the fair value of these instruments periodically and estimate an impairment charge based on management’s best estimates, which are unobservable inputs. |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | Fair value measurements of the Company’s financial assets measured at fair value on a recurring basis at March 31, 2009 are summarized in the following table: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      |   | Quoted Prices in Active Markets for Identical Instruments(Level 1) |    |   |  Significant Other Observable Inputs(Level 2) |   |    |   Significant Unobservable Inputs(Level 3) |   |   |      Total |   |
|---------------------------|--------|--------------------------------------------------------------------|---------|--------|----------------------------------------------------|--------|---------|------------------------------------------------------|--------|--------|-------------------------------------|--------|
|                      |   |                                                               |    |   |                                               |   |    |                                                 |   |   |                                |   |
| Assets                    |   |                                                               |    |   |                                               |   |    |                                                 |   |   |                                |   |
| Cash and cash equivalents |   |                                                               | 224,769 |   |                                               |   | – |                                                 |   |   | –                             |   |   |   | 224,769 |   |

|   | (f)  | Recently Issued Accounting Pronouncements |
|--------|-----------|-------------------------------------------|

|   | (i) | Accounting Standards Codification In June 2009, FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162”.  Under SFAS No. 168, the FASB Accounting Standards Codification (“Codification”) will become the sole source of authoritative U.S. GAAP to be applied by nongovernmental entities.  SFAS No. 168 is effective for financial statements issued for interim andannual periods ending after September 15, 2009.  The adoption of this statement will have no material impact on the Company’s financial statements but will require that interim and annual filings include references to the Codification. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Variable Interest Entities In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”. SFAS No. 167 amends the accounting for variable interest entities (“VIE”) and changes the process as to how an enterprise determines which party consolidates a VIE. SFAS No. 167 also defines the party that consolidates the VIE (the primary beneficiary) as the party with (1) the power to direct activities of the VIE that most significantly affect the VIE’seconomic performance and (2) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Upon adoption of SFAS No. 167, the reporting enterprise must reconsider its conclusions on whether an entity should be consolidated, and should a change result, the effect on its net assets will be recorded as a cumulative effect adjustment to retained earnings. SFAS No. 167 is effective for fiscal years beginning after November 15, 2009, and interim periods within those fiscalyears and early application is prohibited. The Company is currently assessing the impact of the adoption of this statement. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 20. | Generally Accepted Accounting Principles in Canada and the United States (Continued) |
|-----|--------------------------------------------------------------------------------------|

|   | (f)  | Recently Issued Accounting Pronouncements (Continued) |
|--------|-----------|-------------------------------------------------------|

|   | (iii)  | Transfers of Financial Assets In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140”. SFAS No. 166 limits the circumstances in which a financial asset may be derecognized when the transferor has not transferred the entire financial asset or has continuing involvement with the transferred asset. The concept of a qualifying special-purpose entity, which had previously facilitated sale accounting forcertain asset transfers, is removed by SFAS No. 166. SFAS No. 166 is effective for financial asset transfers occurring in fiscal years beginning after November 15, 2009, and interim periods within those fiscal years and early application is prohibited. The adoption of this statement is not expected to have a material effect on the Company’s financial statements. |
|--------|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv)  | Subsequent Events In May 2009, the FASB issued SFAS No. 165 “Subsequent Events”. SFAS No. 165 provides general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The statement sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactionsthat may occur for potential recognition or disclosure in the financial statements. The statement also sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements.  Furthermore, this statement identifies the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS No. 165 is effective for interim or annual periods ending after June 15, 2009. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v)  | Disclosures about Derivative Instruments and Hedging Activities In March 2008, FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”.  SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects onan entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for financial statementsissued for fiscal years beginning after November 15, 2008, with early adoption encouraged.  The Company is currently assessing the impact of the adoption of this statement. |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | Business Combinations In December 2007, the FASB issued SFAS No. 141R, “Business Combinations”.  This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requiresan acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption ofthis statement is not expected to have a material effect on the Company's financial statements. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii)  | Non-controlling Interests in Consolidated Financial Statements Liabilities In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements Liabilities – an Amendment of ARB No. 51”.  This statement amends ARB 51 to establish accounting and reporting standards for the Non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years and interimperiods within those fiscal years, beginning on or after December 15, 2008 and earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements. |
|--------|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 19. EXHIBITS. 

| No.     | Description of Exhibit                                                                                                                                                                                                                       |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                         |
| 1(i)(1) | Articles of Incorporation of Valcent Products Inc., dated January 19, 1996, incorporated by reference to Exhibit 1(a)(i) on Form 20-F filed October 13, 2005.                                                                                |
|    |                                                                                                                                                                                                                                         |
| 1(i)(2) | Amendment to Articles of Incorporation of Valcent Products Inc., dated March 12, 1996, incorporated by reference to Exhibit 1(a)(ii) on Form 20-F filed October 13, 2005.                                                                    |
|    |                                                                                                                                                                                                                                         |
| 1(i)(3) | Amendment to Articles of Incorporation of Valcent Products Inc., dated August 19, 1996, incorporated by reference to Exhibit 1(a)(i) on Form 20-F filed October 13, 2005.                                                                    |
|    |                                                                                                                                                                                                                                         |
| 1(i)(4) | Amendment to Articles of Incorporation of Valcent Products Inc., dated June 30, 1998, incorporated by reference to Exhibit 1(a)(iv) on Form 20-F filed October 13, 2005.                                                                     |
|    |                                                                                                                                                                                                                                         |
| 1(i)(5) | Amendment to Articles of Incorporation of Valcent Products Inc., dated July 8, 1999, incorporated by reference to Exhibit 1(a)(v) on Form 20-F filed October 13, 2005.                                                                       |
|    |                                                                                                                                                                                                                                         |
| 1(i)(6) | Amendment to Articles of Incorporation of Valcent Products Inc., dated September 28, 1999, incorporated by reference to Exhibit 1(a)(vi) on Form 20-F filed October 13, 2005.                                                                |
|    |                                                                                                                                                                                                                                         |
| 1(i)(7) | Amendment to Articles of Incorporation of Valcent Products Inc., dated April 15, 2005, incorporated by reference to Exhibit 1(a)(vii) on Form 20-F filed October 13, 2005.                                                                   |
|    |                                                                                                                                                                                                                                         |
| 1(i)(8) | Amendment to Articles of Incorporation of Valcent Products Inc., dated June 24, 2009 incorporated by reference to Exhibit 3.1 on Form 6-K filed July 16, 2009.                                                                               |
|    |                                                                                                                                                                                                                                         |
| 1(ii)   | By-laws of Valcent Products Inc., dated March 26, 1996, incorporated by reference to Exhibit 1(b) on Form 20-F filed October 13, 2005.                                                                                                       |
|    |                                                                                                                                                                                                                                         |
| 1(iii)  | Audit Committee charter of Valcent Products, Inc., dated March 2005, incorporated by reference to Exhibit 15.A on Form 20-F filed October 31, 2005.                                                                                          |
|    |                                                                                                                                                                                                                                         |
| 4.1     | Master license agreement between Valcent Products Inc. and MK Enterprises LLC, dated July 29, 2005, incorporated by reference to Exhibit 4(a)(i) on Form 20-F filed October 13, 2005.                                                        |
|    |                                                                                                                                                                                                                                         |
| 4.2     | Product development agreement between Valcent Products Inc. and MK Enterprises LLC, dated July 29, 2005, incorporated by reference to Exhibit 4(a)(ii) on Form 20-F filed October 13, 2005.                                                  |
|    |                                                                                                                                                                                                                                         |
| 4.3     | Invention license agreement between Valcent Products Inc. and MK Enterprises LLC, dated July 29, 2005, incorporated by reference to Exhibit 4(a)(iii) on Form 20-F filed October 13, 2005.                                                   |
|    |                                                                                                                                                                                                                                         |
| 4.4     | Consulting agreement between Valcent Products Inc. and M. Glen Kertz, dated July 29, 2005, incorporated by reference to Exhibit 4(a)(iv) on Form 20-F filed October 13, 2005.                                                                |
|    |                                                                                                                                                                                                                                         |
| 4.5     | Consulting agreement between Valcent Products Inc. and MK Enterprises LLC, dated July 29, 2005, incorporated by reference to Exhibit 4(a)(v) on Form 20-F filed October 13, 2005.                                                            |
|    |                                                                                                                                                                                                                                         |
| 4.6     | Form of liquidated damages convertible note agreement between Valcent Products Inc., and certain institutional note holders, dated April 6, 2006, incorporated by reference to Exhibit 10.12 on Form F-1/A filed June 30, 2006.              |
|    |                                                                                                                                                                                                                                         |
| 4.7     | Form of liquidated damages warrant agreement between Valcent Products Inc., and certain institutional note holders, dated April 6, 2006, incorporated by reference to Exhibit 10.13 on Form F-1/A filed June 30, 2006.                       |
|    |                                                                                                                                                                                                                                         |
| 4.8     | Creative and production services agreement between Valcent Products Inc., and Hawthorne Direct, dated June 14, 2006, incorporated by reference to Exhibit 10.14 on Form F-1/A filed June 30, 2006.                                           |
|    |                                                                                                                                                                                                                                         |
| 4.9     | Media services agreement between Valcent Products Inc., and Hawthorne Direct, dated June 14, 2006, incorporated by reference to Exhibit 10.15 on Form F-1/A filed June 30, 2006.                                                             |
|    |                                                                                                                                                                                                                                         |
| 4.10    | Manufacturing agreement between Valcent Manufacturing Ltd. and Solid Integrations LLC dated September 22, 2006, incorporated by reference to Exhibit 10.16 on Form F-1/A filed October 2, 2006.                                              |
|    |                                                                                                                                                                                                                                         |
| 4.11    | Farm and Ranch Contract between Valcent Products, Inc. C/O Gordon & Mott, P.C., and Roberto H. Silvas, dated October 2, 2006, incorporated by reference to Exhibit 10.19 on Form F-1/A filed February 7, 2007.                           |
|    |                                                                                                                                                                                                                                         |
| 4.12    | Letter of Agreement between Valcent Products, Inc., Global Green Solutions Inc., Pagic LP, and West Peak Ventures of Canada Limited, dated October 2, 2006, incorporated by reference to Exhibit 10.17 on Form F-1/A filed February 7, 2007. |

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ITEM 19. EXHIBITS.

| 4.13   | Direct Response Services Agreement between Valcent Products, Inc. and InPulse Response Group, dated October 23, 2006, incorporated by reference to Exhibit 10.22 on Form F-1/A filed February 7, 2007.                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.14   | Corporate Support Agreement between Valcent Products, Inc., and Sweetwater Capital Corporation dated November 1, 2006, incorporated by reference to Exhibit 4.14 on Form 20-F filed October 10, 2008.                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.15   | Master Services Agreement between Valcent Products, Inc. and Accretive Commerce, Inc., dated November 30, 2006, incorporated by reference to Exhibit 10.20 on Form F-1/A filed February 7, 2007.                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.16   | Stakeholders Letter of Agreement between Valcent Products, Inc., Global Green Solutions, Inc., Pagic LP, and West Peak Ventures of Canada Limited, dated June 25, 2007, incorporated by reference to Exhibit 4.16 on Form 20-F filed October 10, 2008.                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.17   | Consulting Services Agreement between Valcent Products, Inc., and MB Pics Capital Corporation, dated November 2, 2007, incorporated by reference to Exhibit 4.17 on Form 20-F filed October 10, 2008.                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.18   | Consulting Services Agreement between Valcent Products, Inc., and Yellow Rose Ltd., dated February 1, 2008, incorporated by reference to Exhibit 4.18 on Form 20-F filed October 10, 2008.                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.19   | Consulting Agreement between Valcent Products, Inc., and J. Gordon Murphy, dated February 29, 2008, incorporated by reference to Exhibit 4.19 on Form 20-F filed October 10, 2008..                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.20   | Financial Advisory Consulting Services Agreement, between Valcent Products, Inc., and Mark T. Cox, dated May 1, 2008, incorporated by reference to Exhibit 4.20 on Form 20-F filed October 10, 2008.                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.21   | Limited Liability Company Operating Agreement of Vertigro Algae Technologies, LLC, between Valcent USA, Inc., and Global Green Solutions Inc., dated May 5, 2008, incorporated by reference to Exhibit 10.1 on Form 6-K filed May 14, 2008.                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.22   | Vertigro Algae Technologies LLC Technology License Agreement, between Valcent Products, Inc., Pagic LP, and West Peak Ventures of Canada Ltd., dated May 7, 2008, incorporated by reference to Exhibit 10.2 on Form 6-K filed May 14, 2008.                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.23   | Vertigro Algae Technologies LLC Amendment to the Technology License Agreement, between Valcent Products, Inc., Pagic LP, and West Peak Ventures of Canada Ltd., dated May 5, 2008 incorporated by reference to Exhibit 4.23 on Form 20-F filed October 10, 2008.                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.24   | Form of convertible note agreement between Valcent Products Inc., and certain institutional note holders, dated July 16, 2008, incorporated by reference to Exhibit 4.1 on Form 6-K filed July 25, 2008.                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.25   | Form of Series A Warrant between Valcent Products Inc., and certain institutional note holders, dated July 16, 2008, incorporated by reference to Exhibit 4.2 on Form 6-K filed July 25, 2008.                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.26   | Form of Series B Warrant between Valcent Products Inc., and certain institutional note holders, dated July 16, 2008, incorporated by reference to Exhibit 4.3 on Form 6-K filed July 25, 2008.                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.27   | Note and Warrant Purchase Agreement, between Valcent Products, Inc., and certain institutional note holders, dated July 16, 2008, incorporated by reference to Exhibit 10.1 on Form 6-K filed July 25, 2008.                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.28   | Security Agreement, between Valcent Products, Inc., and Platinum Long Term Growth VI, LLC, dated July 16, 2008, incorporated by reference to Exhibit 10.2 on Form 6-K filed July 25, 2008.                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                            |
| 4.29   | Patent Trademark and Copyright Security Agreement, between Valcent Products, Inc., Valcent USA Inc., Valcent Manufacturing, Ltd., Vertigro Algae Technologies LLC, Valcent Products EU Limited, and Platinum Long Term Growth VI, LLC, dated July 16, 2008 and incorporated by reference to Exhibit 4.29 on Form 20-F filed October 10, 2008.    |
|   |                                                                                                                                                                                                                                                                                                                                                            |

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ITEM 19. EXHIBITS. - continued

| 4.30       | Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, between, Valcent Products, Inc., Valcent Manufacturing, Ltd., Deborah P. Everett, and Platinum Long Term Growth VI, LLC, dated July 16, 2008, and incorporated by reference to Exhibit 4.30 on Form 20-F filed October 10, 2008.                                      |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.31       | Hazardous Substances Indemnity Agreement between Valcent Products, Inc., Valcent USA Inc., Valcent Manufacturing, Ltd., Valcent Management LLC, Vertigro Algae Technologies LLC, Valcent Products EU Limited, and Platinum Long Term Growth VI, LLC, dated July 16, 2008, and incorporated by reference to Exhibit 4.31 on Form 20-F filed October10, 2008. |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.32       | Purchase and Sale Agreement between Valcent USA Inc., Global Green Solutions, Inc., and Vertigro Algae Technologies LLC, dated September 26, 2008, incorporated by reference to Exhibit 10.1 on Form 6-K filed October 1, 2008.                                                                                                                             |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.33       | Intellectual Property Sales and Purchase Agreement between Pagic LP, Malcolm Glen Kertz, West Peak Ventures of Canada Ltd., and Valcent Products Inc.,  dated March 30, 2009, incorporated by reference to Exhibit 10.1 on Form 6-K filed July 13, 2009.                                                                                          |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.34       | Form of Settlement Agreement and Lock up Agreement dated April, 2009 and May 11, 2009 respectively between Valcent Products and various individuals and entities being debt holders of the Company, incorporated by reference to Exhibit 10.1 and 10.2 on Form 6-K filed May 15, 2009.                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.35       | Addendum to the Purchase and Sale Agreement dated September 26, 2008 between Valcent USA, Inc., Global Green Solutions Inc., and Vertigro Algae Technologies LLC, incorporated by reference to Exhibit 10.1 on Form 6-K filed December 5, 2008.                                                                                                             |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 4.36       | Settlement Agreement – Nova Skincare System / Dust Wolf dated March 30, 2009 between Valcent Products Inc., Pagic LP, Malcolm Glen Kertz, and West Peak Ventures of Canada Ltd. FILED HEREWITH.                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 5.1        | Subsidiaries of Valcent Products Inc., as of September 30, 2008 incorporated by reference to Exhibit 5.1 on Form 20-F filed October 10, 2008.                                                                                                                                                                                                               |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 12(a)(iii) | Certification pursuant to Rule 13A-14(A) in Accordance with Section 302 of the Sarbanes-Oxley Act of 2002 FILED HEREWITH.                                                                                                                                                                                                                                   |
|       |                                                                                                                                                                                                                                                                                                                                                        |
| 13(a)(iii) | Certification pursuant to 18 U.S.C. Section 1350 as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 FILED HEREWITH.                                                                                                                                                                                                                       |

|                        |                   |                                                                                                     |
|-----------------------------|------------------------|----------------------------------------------------------------------------------------------------------|
|                        | VALCENT PRODUCTS, INC. |
|                        |                   |                                                                                                     |
|                        |                   |                                                                                                     |
| Date: October 15, 2009 | By:          | /s/ F. George Orr                                                                                   |
|                        |                   |  F. George OrrChief Financial Officer acting Chief Executive Officer andacting President  |

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