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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934

For the Fiscal Year Ended April 30, 2008

COMMISSION FILE NO. 0-21255

IAS ENERGY, INC.(Name of small business issuer as specified in its charter)

|OREGON                          | 91-1063549            
|------------------------------- | ----------------------
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)

240  11780 HAMMERSMITH WAYRICHMOND, BRITISH
COLUMBIA V7A 5E9, CANADA(Address, including postal code, of
registrant's principal executive offices)

(604) 278-5996(Telephone number
including area code)

Securities registered pursuant to Section 12(b) of the Exchange
Act:NONE

Securities registered pursuant to Section 12(g) of the Exchange
Act:

|Title of each class        | Name of each Exchange on which registered:
|-------------------------- | ------------------------------------------
|                           |                                           
|Common Stock, no par value | NASD Over the Counter Bulletin Board      

Indicate by check mark if the issuer is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act: Yes [ 
 ]   No [X]

Indicate by check mark if the issuer is not required to file
reports pursuant to Section 13 or 15(d) of the Act: Yes [ 
 ]   No [X]

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X]  No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB: Yes [   ]   No [X]

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Indicate by check mark whether the issuer is a large accelerated
filer, an accelerated filer, or a non-accelerated filer:

Larger accelerated filer [   ]    
 Accelerated filer [   ]     
Non-accelerated filer [X]

Indicate by check mark whether the issuer is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [   ]  
No [X]

State the issuers revenues for its most recent fiscal year:
$20,201 Oil and Gas Revenue

The aggregate market value of the voting stock held by
non-affiliates of the registrant on August 11, 2008, computed by reference
to the price at which the stock was sold on that date: $5,723,101.

The number of shares outstanding of the registrant's Common
Stock, no par value, as of fiscal year ended April 30, 2008 and August 11,
2008 was 58,408,039 and 69,913,387, respectively.

Documents incorporated by reference: See Exhibits.

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

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IAS ENERGY, INC.

FORM 10-KSB

TABLE OF CONTENTS

|PART I     | 4                                                                                                                                                        
|---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|           | ITEM 1. DESCRIPTION OF BUSINESS                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           | ITEM 2. DESCRIPTION OF PROPERTY                                                                                                                          
|           | ITEM 3. LEGAL PROCEEDINGS                                                                                                                                
|           | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                              
|PART II    | 21                                                                                                                                                       
|           | ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           | ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATIONS                                                                                 
|           |                                                                                                                                                          
|           |                                                                                                                                                          
|           | ITEM 7: FINANCIAL STATEMENTS                                                                                                                             
|           | ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE                                                       
|           | ITEM 8A. CONTROLS AND PROCEDURES                                                                                                                         
|           | ITEM 8B. OTHER INFORMATION                                                                                                                               
|PART III   | 31                                                                                                                                                       
|           | ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS, CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
      ACT
|           | ITEM 10. EXECUTIVE COMPENSATION                                                                                                                          
|           | ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
      AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                            
|           | ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
      AND DIRECTOR INDEPENDENCE                                                                 
|           | ITEM 13. EXHIBITS                                                                                                                                        
|           | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                          
|SIGNATURES | 42                                                                                                                                                       

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PART I

ITEM 1.       DESCRIPTION OF
BUSINESS

BUSINESS DEVELOPMENT

IAS Energy, Inc. (formerly IAS Communications, Inc.) (referred
to herein as the Company, IAS, us, we, our") is a development stage company
incorporated in the state of Oregon in 1994. Our principal business operations
have historically been conducted in Indiana and B.C. Canada. Our principal
business operations have included the acquisition and exploration of oil and gas
interests in North America and the commercialization of an antenna technology.

We are presently pursuing our option to acquire up to a 100%
interest in Power Telecom Limited of Hong Kong. Power Telecom Limited owns the
rights to the Chinese web site www.video1314.com.

BUSINESS OF THE ISSUER

The Company entered into an agreement dated April 6, 2005 with
a private company controlled by the President of the Company to acquire a
working interest in two oil wells located in Burleson County, Texas. The Company
agreed to issue up to 1,000,000 shares (issued - 279,477) of restricted common
stock at the rate of one share for every $0.10 of revenue from the wells. To
April 30, 2008, revenue from the wells was approximately $40,512. During the
fiscal year ended April 30, 2008, the Company received/accrued $2,996 of revenue
from the wells. The approximately 496,000 shares of restricted common stock
issuable at April 30, 2008 pursuant to this agreement have been recorded at the
quoted market price prevailing at the time of receipt of the oil and gas
revenues and are accrued in the amount of $143,338 in obligation to issue
shares. The wells are producing but a value cannot be placed on them due to
vertical fracture features that prevent the estimation of reserves.

On November 3, 2005, we entered into a letter of intent to
purchase a 37.5% net revenue interest in a producing oil well in Overton and
Clay County, Tennessee, for consideration of $400,000. We also entered into a
letter of intent to drill two exploration wells in the Overton and Clay County,
Tennessee. In January 2006, we decided not to proceed with this project.

On May 4, 2006, the Company entered into an agreement with
Energy Source Inc. (ESI) to drill up to 24 gas wells located in Kentucky. The
Company can earn a 100% working interest (60% net revenue interest) in 4 gas
wells by paying $185,000 per well and had the option to acquire a 100% working
interest (60% net revenue interest) in an additional 20 wells over an 18 month
period at a price to be agreed upon. Each well is subject to a 12.5% net revenue
interest to the land-owner and a 27.5% interest to ESI. The first three wells
were paid and drilled during the year. During the fiscal year ended April 30,
2008, the option for the additional 20 wells expired. On May 18, 2006, the
Company entered into an agreement with Teryl Resources Corp. (Teryl), a public
company related by common directors and officers, to farm out a 40% working
interest outlined above, subject to a 12.5% net revenue interest to the
land-owner and a 27.5% interest to ESI, in consideration for paying 50% of the
total costs of the wells. The Company received $277,500 from Teryl during the
year ended April 30, 2007, representing 50% of the cost of drilling the first,
second and third wells.

On September 28, 2006, the Company assigned a 20% working
interest (12% net revenue interest) in the third well drilled, as part of a
private placement, to three related parties pursuant to

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private placement subscription agreements, leaving the Company
with a 40% working interest (24% net revenue interest).

Due to the difficulty of obtaining an independent valuation
report due to the vertical fracture of the wells, the total cost of $273,426
(2007 - $nil) was impaired and charged to operations during he period ended
April 30, 2008.

Video1314

On October 23, 2007 we entered into a letter of intent (LOI)
with each of the two shareholders of Power Telecom Limited (Power Telecom), a
company incorporated in Hong Kong, to acquire up to a 100% interest in Power
Telecom, which owns a 100% beneficial interest in www.video1314.com (Video
1314) a Chinese Web 2.0 platform similar to YouTube (www.youtube.com).

Video1314 is a fast growing Chinese Web 2.0 platform (similar
to www.youtube.com) that allows users to share videos, music, and audio as well
as sell goods and services using videos in its marketplace. Since its launch,
Video1314 has attracted millions of users and is fast becoming one of Asias top
Web2.0 destinations. Video1314 currently serves the Greater China region, which
includes mainland China, Hong Kong, Macau and Taiwan. The features of the site
are focused on free online photo, video and audio sharing; a marketplace to buy
and sell goods using video, photo and audio technologies; and online educational
gaming.

Upon execution of the LOI, we paid Power Telecom the sum of
$50,000, to be used for the further development of the business of Power
Telecom.

We received a formal business plan for Video1314 and our
representatives, having full access to Power Telecoms business in order to
assess our potential acquisition of Power Telecom, completed our due diligence.

On October 25, 2007 the Board of Directors of the Company
appointed Samuel Kam as Vice President of Internet Development to oversee the
website www.video1314.com.

Samuel Kam has been in investment consultancy, business
management, acquisition in real estate, trading, manufacturing and the travel
industry between 1986 and 1995. From 1987 to 1992 in Canada, he was president of
Samabill Transworld Investments Inc., which was in investment consultancy. In
1990, he purchased Soficomex Development Corp. in Canada. As their president
from 1990 to 1996, he developed the company into a major airline consolidator in
Eastern Canada. Mr. Kam was among the first group of pioneers in the Internet
industry in Hong Kong. In early 1996, he founded PowerNet Internet Group in Hong
Kong, a leading ISP rated as the top three best ISPs in Hong Kong in 1999 by PC
World. In 2000 he founded PowerNetix Limited, one of the most advanced Internet
data centres offering up to Layer 7 application controls. He has been
instrumental in developing many advanced services and products, particularly
global VPN products and utility computing over the Internet. He has developed a
specialty in network operations, management and product development. In 2003, he
co-founded Power-All Networks Ltd, which specializes in cluster based computing
and data centre in a box solutions. In 2007, he founded Video1314, which aims to
become one of the top Internet sites in Asia and China.

On November 26, 2007 we entered into an option agreement
(Option Agreement) with each of the two shareholders of Power Telecom Limited,
(Mr. Samuel Kam [Kam] and Biotonus Clinique Bon Port (Hong Kong) Limited
[Biotonus]; together Kam and Biotonus shall be

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referred to as the Vendors) and Power Telecom Limited, to
acquire up to a 100% interest in Power Telecom.

Pursuant to the Option Agreement, the Vendors granted the
Company a series of irrevocable exclusive options to purchase up to 100% of the
shares of Power Telecom. The Company may issue up to 50 million shares of common
stock of the Company in exchange for up to all outstanding shares of Power
Telecom held by the Vendors. Additionally, the Company may invest up to an
aggregate of $650,000 cash in Power Telecom as a capital contribution. On
October 23, 2007, pursuant to the LOI, we paid Power Telecom the sum of $50,000
towards the $650,000 aggregate capital contribution.

The Company is receiving a series of options only to purchase
the shares of Power Telecom and is under no obligation to exercise the options
in whole or in part. The Company may elect to exercise only one or some of the
series of options granted hereunder. If the Company elects only to exercise one
or some of the series of options granted hereunder, it will retain the
percentage of Power Telecom that it has already purchased.

The Company shall also issue up to five million shares of
common stock of the Company to Ramon Mabanta as a finders fee if all the
options to purchase up to 100% of the shares of Power Telecom are exercised.
Such finders fee shares shall be subject to a lock-up agreement.

On November 26, 2007 we exercised the first option, made a
payment of $50,000, issued 10 million shares of our common stock to the Vendors,
and earned a 20% interest in Power Telecom. Additionally, we issued one million
shares of our common stock to Ramon Mabanta as a finders fee.

In December 2007, the fiber optic backbone capacity was
upgraded from 100Mbps to 1000Mbps in Hong Kong, which is equivalent to
twenty-two T3 lines. This added capacity and connection to the Internet would
allow Video1314 to have the capacity to sustain over 30 million hits to its site
per day. Traffic on its web site for the month of January 2008, registered more
than 10 million hits, reflecting growing interest in the site's ability to offer
video, photo and audio sharing experiences to its users. The activity in January
represented a 300% increase compared to 4 million hits recorded in November
2007.

On March 5, 2008, we exercised the second option, made a
payment of $100,000, and issued 10,000,000 common shares to acquire a further
20% interest in Power Telecom for a total holding of 40%. Additionally, we
issued one million shares of our common stock to Ramon Mabanta as a finders
fee. The due date of the issuance of shares for the third option was extended to
August 15, 2008.

Competition

Oil and Gas The strength of commodity prices has
resulted in significantly increased operating cash flows and has led to
increased drilling activity. This industry activity has increased competition
for undeveloped lands; skilled personnel; access to drilling rigs, service rigs
and other equipment; and access to processing and gathering facilities, all of
which may cause drilling and operating costs to increase. Most of our
competitors are larger than us and have substantially greater financial and
marketing resources. In addition, some of our competitors may be able to secure
products and services from vendors on more favorable terms, offer a greater
product selection, and adopt more aggressive pricing policies than we can.

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Video 1314 With the investment and our ownership in
Video 1314, we operate in the Internet products, services, and content markets,
which are highly competitive and characterized by rapid change, converging
technologies, and increasing competition from companies offering communication,
information, and entertainment services integrated into other products and media
properties.

We compete for users and advertisers with many other providers
of online services. The principal competitive factors relating to attracting and
retaining users include the usefulness, accessibility, reach, integration, and
personalization of the online services that we offer, and the overall user
experience.

The most significant competition is from Baidu, Alibaba, Yahoo!
China, Google China, Tudou and Youku.

In this Chinese market, we also compete with local portals that
are predominantly supported by local telecommunication providers or local
providers of specific locally designed and marketed Internet services, some of
which may have a potential competitive advantage due to an existing direct
billing relationship with their users.

Material effects of Government Regulation

Oil and Gas The oil and natural gas industry is
subject to extensive controls and regulations imposed by various levels of
government. We do not expect that any of these controls or regulations will
affect our operations in a manner materially different than they would affect
other oil and gas industry participants of similar size.

Video 1314 Our business interest and operations in
Power Telecom and Video 1314 are conducted in China. China's economy differs
from the economies of most developed countries in many respects, including the
amount of government involvement, level of development, growth rate, control of
foreign exchange, and allocation of resources. The Chinese government has
implemented various measures to encourage economic development and guide the
allocation of resources. Some of these measures benefit the overall Chinese
economy, but may also have a negative effect on us. For example, we may be
adversely affected by government control over video sharing and the Internet. In
December 2007, the Chinese Government issued new rules which held that in order
to operate, video-sharing sites must be part state-owned. Regulators later
issued guidance that some privately run sites may continue if they were given
licenses and agreed to abide by content restrictions. Such measures may cause a
decrease in the level of activity in media sharing web sites in China, which in
turn could adversely affect us.

Past Activities of Our Company

Until fiscal 2002, we were engaged in the commercialization of
advanced antenna technology known as the Contrawound Toroidal Helical Antenna,
(the "CTHA"), for wireless communications markets. Since then, The CTHA
technology has been on hold due to unsuccessful attempts to complete a license
agreement with potential customers.

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RISK FACTORS

You should carefully consider the following risks and the other
information in this Report and our other filings with the SEC before you decide
to invest in us or to maintain or increase your investment.

The risks and uncertainties described below are not the only
ones facing us. Additional risks and uncertainties may also adversely impact and
impair our business. If any of the following risks actually occur, our business,
results of operations, or financial condition would likely suffer. In such case,
the trading price of our common stock could decline, and you may lose all or
part of your investment.

BUSINESS RISKS

We are a developmental stage company and have suffered
recurring operating losses.

We were incorporated in Oregon on December 13, 1994. We are a
development stage company. In a development stage company, management devotes
most of its activities to establishing a new business. Planned principal
activities have not yet produced significant revenues and we have suffered
recurring operating losses as is normal in development stage companies. The
Company had oil and gas revenue of $20,201 during the year ended April 30, 2008,
but it is not likely that we will be able to generate sufficient revenue in the
future. We also had a working capital deficiency of $678,031 as at April 30,
2008, which our auditors have stated raises substantial concern on our ability
to meet planned business objectives and ongoing operations for the next twelve
months. Our ability to emerge from the development stage with respect to our
planned principal business activities is dependent upon our successful efforts
to raise additional equity financing, or receive funding from affiliates and
controlling shareholders.

We have and will continue to have a need for additional
financing.

We have experienced significant working capital deficiencies
  and negative cash flows in the past. Our ability to continue in business depends
  upon our continued ability to obtain working capital. There can be no assurance
  that any such financing would be available upon terms and conditions acceptable
  to us, if at all. The inability to obtain additional financing in a sufficient
  amount when needed, and upon acceptable terms and conditions could have a material
  adverse effect upon us. If additional funds are raised by issuing equity securities,
  further dilution to existing or future shareholders is likely to result.

We are controlled by current insiders and affiliates of the
Company.

Approximately 45,000,000 common shares, not including currently
exercisable options or warrants, are owned by current affiliates and insiders
representing control of approximately 64.41% of the total voting power, with
28.61% to be voted specifically for the election of directors by the
shareholders of Power Telecom.

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If we continue to exercise our options to acquire Power
Telecom, this could result in additional dilution to shareholders, lead
to a change of control, and expose us to unknown liabilities.

If we continue to exercise our options to acquire up to 100% of
the shares of Power Telecom and issue additional common shares this will dilute
your shareholding in the Company and could result in a change of control. In
addition, this could also lead to large and immediate non-cash charges that can
have an adverse effect on our results of operations. There are risks associated
with the acquisition of an internet-related business, which is a business in
which management and the board of directors have no or little direct prior
experience and where competitors in such markets have stronger market positions.
In addition, despite the experience of our Vice President, Internet Development,
our management and board of directors may lack experience operating an
internet-related business in China. Further, we cannot assure you the
anticipated benefits of any future acquisition, investment or business
relationship would be realized or that it would not be exposed to unknown
liabilities. We may also become subject to adverse legal and accounting
consequences with the acquisition of a company incorporated and operating in
China.

As we continue to expand our business purposes, we may
require additional key personnel.

At the present, the Company employs no full time employees. The
success of the Company's business will depend, in part, upon the ability to
attract and retain qualified employees. The Company believes that it will be
able to attract competent employees, but no assurance can be given that the
Company will be successful in this regard. If the Company is unable to engage
and retain the necessary personnel, its business may be materially and adversely
affected.

We are uncertain of our ability to manage growth.

Our ability to achieve our planned growth is dependent upon a
number of factors including our ability to hire, train and assimilate management
and other contractors or employees, the adequacy of our financial resources, our
ability to identify and efficiently provide such new products and services as
our customers may require in the future and our ability to adapt our own systems
to accommodate expanded operations. In addition, there can be no assurance that
we will be able to achieve our planned expansion in oil and gas exploration and
Video1314 or that we will be able to manage such expanded operations
successfully. Failure to manage anticipated growth effectively and efficiently
could have a material adverse effect on us.

Our present management devotes part-time attention to the
Company which may result in conflicts of interest.

The present officers and directors of the Company have other
full-time positions or part-time employment which is unrelated to the Company.
Some officers and directors will be available to participate in management
decisions on a part-time or as-needed basis only. Management of the Company may
devote time to other companies or projects which may compete directly or
indirectly with the Company (see Directors and Officers herein).

Indemnification of officers and directors for securities
liabilities.

The Bylaws of the Company provide that the Company may
indemnify any Director, Officer, agent and/or employee as to those liabilities
and on those terms and conditions as are specified in the Oregon Business
Corporation Act. Further, the Company may purchase and maintain insurance on
behalf of any such persons whether or not the Company would have the power to
indemnify such person against the liability insured against. The foregoing could
result in substantial expenditures by the Company and prevent any recovery from
such Officers, Directors,

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agents and employees for losses incurred by the Company as a
result of their actions. Further, the Company has been advised that in the
opinion of the Securities and Exchange Commission, indemnification is against
public policy as expressed in the 1933 Act and is therefore, unenforceable (See
"Indemnification"herein).

General Factors.

The Company's areas of business may be affected from time to
time by such matters as changes in general economic conditions, changes in laws
and regulations, taxes, tax laws, prices and costs, and other factors of a
general nature which may have an adverse effect on the Company's business (See
"Business" herein).

Cumulative Voting, Preemptive Rights and Control.

There are no preemptive rights in connection with the Shares of
Common Stock. Shareholders may be diluted in their percentage ownership of the
Company in the event additional shares are issued by the Company in the future.
Cumulative voting in the election of directors is not permitted. Accordingly,
the holders of a majority of the shares of Common Stock present in person or by
proxy will be able to elect all of the Company's Board of Directors.

Regulatory developments may result in increased costs.

We are subject to securities regulation in the jurisdictions in
which we operate. We may incur increased costs for expenses necessary to comply
with existing and newly adopted laws and regulations or penalties for any
failure to comply.

RISKS SPECIFIC TO THE OIL AND GAS INDUSTRY

The potential profitability of oil and gas ventures depends
upon factors beyond the control of our Company.

The potential profitability of oil and gas properties is
dependent upon many factors beyond our control. For instance, world prices and
markets for oil and gas are unpredictable, highly volatile, potentially subject
to governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to worldwide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. In addition, adverse
weather conditions and availability of drilling equipment can also hinder
drilling operations. These changes and events may materially affect our
financial performance. These factors cannot be accurately predicted and the
combination of these factors may result in our Company not receiving an adequate
return on invested capital.

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There can be no assurance our wells will become
profitable.

Our wells may not become productive wells, and even if they do,
they may become uneconomic in the event water or other deleterious substances
are encountered which impair or prevent the production of oil and/or gas from
the well. In addition, production from any well may be unmarketable if it is
impregnated with water or other deleterious substances. Also, the marketability
of oil and gas which we may acquire or discover will be affected by numerous
factors, including the proximity and capacity of oil and gas pipelines and
processing equipment, market fluctuations of prices, taxes, royalties, land
tenure, allowable production and environmental protection, all of which could
result in greater expenses than revenue generated by the well.

Exploration for economic reserves of oil and gas is subject
to a number of risk factors.

Few properties that are explored are ultimately developed into
producing oil and/or gas wells. Our properties are in the exploration and
development stage only and are without proven reserves of oil and gas. We may
not establish commercial discoveries on any of our properties.

Competition in the oil and gas industry is highly
competitive and there is no assurance that we will be successful in
acquiring the leases.

The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staffs. Accordingly, there is a high degree of competition for
desirable oil and gas leases, suitable properties for drilling operations and
necessary drilling equipment, as well as for access to funds. We cannot predict
if the necessary funds can be raised or that any projected work will be
completed.

The marketability of natural resources will be affected by
numerous factors beyond our control which may result in us not receiving
an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which we may acquire or
discover will be affected by numerous factors beyond our control. These factors
include market fluctuations in oil and gas pricing and demand, the proximity and
capacity of natural resource markets and processing equipment, governmental
regulations, land tenure, land use, regulation concerning the importing and
exporting of oil and gas and environmental protection regulations. The exact
effect of these factors cannot be accurately predicted, but the combination of
these factors may result in us not receiving an adequate return on invested
capital to be profitable or viable.

Oil and gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays
in excess of those anticipated causing an adverse effect on our Company.

Oil and gas operations are subject to federal, state, and local
laws relating to the protection of the environment, including laws regulating
removal of natural resources from the ground and the discharge of materials into
the environment. Oil and gas operations are also subject to federal, state, and
local laws and regulations which seek to maintain health and safety standards by
regulating the design and use of drilling methods and equipment. Various permits
from government bodies may be required for drilling operations to be conducted;
we can give no assurance that we will receive such permits. Environmental
standards imposed by federal, provincial, or local authorities may be changed
and any such changes may have material adverse effects on our activities.
Moreover, compliance with such laws may cause substantial delays or require
capital outlays in excess of those anticipated, thus causing an adverse effect
on us. Additionally, we may be subject to liability for pollution or other
environmental damages. To date we have not been required to spend any material

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amount on compliance with environmental regulations. However,
we may be required to do so in future and this may affect our ability to expand
or maintain our operations.

RISKS RELATED TO VIDEO SHARING AND THE INTERNET

Our business depends on the continued growth and maintenance
of the Internet infrastructure.

The success and the availability of our Internet-based products
and services depends in part upon the continued growth and maintenance of the
Internet infrastructure itself, including its protocols, architecture, network
backbone, data capacity and security. Spam, viruses, worms, spyware, denial of
service attacks, phishing, and other acts of malice may affect not only the
Internets speed, reliability and availability but also its continued
desirability as a vehicle for commerce, information and user engagement. If the
Internet proves unable to meet the new threats and increased demands placed upon
it, our business plans, user and advertiser relationships, site traffic and
revenues, if any, could be adversely affected.

We face significant competition from large-scale Chinese
Internet content, product and service aggregators, including Baidu,
Alibaba, Yahoo! China, Google China, Tudou and Youku.

We face significant competition from companies, principally
Baidu, Alibaba, Yahoo! China, Google China, Tudou and Youku that have aggregated
a variety of Internet products, services and content in a manner similar to
Video 1314. The principal competitive factors relating to attracting and
retaining users include the usefulness, accessibility, reach, integration, and
personalization of the online services that we offer, the quality and relevance
of our search results, and the overall user experience. In this Chinese market,
we also compete with local portals that are predominantly supported by local
telecommunication providers or local providers of specific locally designed and
marketed Internet services, some of which may have a potential competitive
advantage due to an existing direct billing relationship with their users. If
our competitors are more successful than we are in developing compelling
products or attracting and retaining users, advertisers, or publishers, then our
revenues, if any, and growth rates could decline.

RISKS RELATED TO DOING BUSINESS IN CHINA

Adverse changes in economic and political policies of the
Chinese government could have a material adverse effect on the overall
economic growth of China, which could adversely affect our business.
Substantially all of our business operations are conducted in China.
Accordingly, our results of operations, financial condition and prospects are
subject to a significant degree to economic, political and legal developments in
China. China's economy differs from the economies of most developed countries in
many respects, including the amount of government involvement, level of
development, growth rate, control of foreign exchange and allocation of
resources. While the Chinese economy has experienced significant growth in the
past 20 years, growth has been uneven across different regions and among various
economic sectors of China. The Chinese government has implemented various
measures to encourage economic development and guide the allocation of
resources. Some of these measures benefit the overall Chinese economy, but may
also have a negative effect on us. For example, we may be adversely affected by
government control over internet and on-line entertainment and services. In
December 2007, the Chinese Government issued new rules which held that in order
to operate, video-sharing sites must be part state-owned. Regulators later
issued guidance that some privately run sites may continue if they were given
licenses and agreed to abide by content restrictions. Such measures could
adversely affect us.

- 12 -

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Our Chinese operations are subject to increased risks which
could harm our business, operating results and financial condition.

In addition to uncertainty about our ability to generate
revenues from our Chinese operations and expand our international market
position, there are certain risks inherent in doing business in China,
including:

- difficulties in developing, staffing and simultaneously managing a number
  of varying foreign operations as a result of distance, language, and cultural
  differences;
- stringent local labor laws and regulations;
- political or social unrest or economic instability;
- risks related to government regulation or required compliance with local
  laws in certain jurisdictions, including those more fully described above; and
- potentially adverse tax consequences.

One or more of these factors could harm our future
international operations and consequently, could harm our brand, business,
operating results, and financial condition.

RISKS RELATED TO OUR SECURITIES

You will be subject to the penny stock rules to the extent
our stock price on the OTC Bulletin Board is less than $5.00.

Since the common shares are not listed on a national stock
exchange or quoted on the NASDAQ Market within the United States, trading in the
common shares on the OTC Electronic Bulletin Board is subject, to the extent the
market price for the common shares is less than $5.00 per share, to a number of
regulations known as the "penny stock rules". The penny stock rules require a
broker-dealer to deliver a standardized risk disclosure document prepared by the
SEC, to provide the customer with additional information including current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, monthly account statements showing the
market value of each penny stock held in the customer's account, and to 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.
To the extent these requirements may be applicable they will reduce the level of
trading activity in the secondary market for the common shares and may severely
and adversely affect the ability of broker-dealers to sell the common shares.

Future sales of shares may adversely impact the value of our
stock.

We will seek to raise additional capital through the sale of
our common stock. Future sales of our common stock could cause the market price
of our common stock to decline.

- 13 -

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Because of the limited market for our shares, share prices
may be highly volatile.

The market prices of equity securities of small companies have
experienced extreme price volatility in recent years not necessarily related to
the individual performance of specific companies. Factors such as announcements
by us or our competitors concerning products, technology, governmental
regulatory actions, other events affecting oil and gas companies generally and
general market conditions may have a significant impact on the market price of
our shares and could cause it to fluctuate substantially. At present, only a
limited public market exists for the Common Stock on the OTC Bulletin Board
maintained by the National Association of Securities Dealers and there is no
assurance that a more active trading market will develop, or, if developed, that
it will be sustained. A shareholder of our common shares may, therefore, find it
difficult to resell their common shares should he or she desires to do so.

Dilution.

Sales of additional equity securities may dilute, on a pro rata
basis, the value of our common shares. The grant and exercise of warrants or
stock options would also likely result in a dilution of the value of our common
shares. In addition, we may grant additional stock options or other forms of
equity-based incentive compensation to attract and retain personnel. We also may
in the future offer equity participation in connection with the obtaining of
non-equity financing, such as debt or leasing arrangements accompanied by
warrants to purchase our equity securities. Any of these actions could dilute
the value of our common shares.

If we continue to exercise our options to acquire up to 100% of
the shares of Power Telecom and issue additional common shares this will dilute
your shareholding in the Company and could result in a change of control. In
addition, this could also lead to large and immediate non-cash charges that can
have an adverse effect on our results of operations.

Our Option Agreement with the two sole shareholders of Power
Telecom and the option for the issuance of shares hereunder may cause
significant dilution to our stockholders and may have an adverse impact
on the market price of our common stock.

In November 2007 we entered into an option agreement to acquire
up to a 100% interest in Power Telecom, whereby the Company may issue up to 50
million shares of common stock of the Company, and up to an aggregate of
$650,000 cash, in exchange for up to all outstanding shares of Power Telecom, if
the Company elects to exercise all available options. As of August 13, 2008, we
have exercised the first three options and issued 33 million shares of common
stock.

The resale by the two sole shareholders of Power Telecom
(Vendors) of the common stock that it acquires from us will increase the
number of our publicly traded shares, which could depress the market price of
our common stock. The issuance of shares to the Vendors will therefore dilute
the equity interest of existing stockholders and could have an adverse effect on
the market price of our common stock.

The perceived risk of dilution may cause our stockholders to
sell their shares, which would contribute to a downward movement in the stock
price of our common stock. Moreover, the perceived risk of dilution and the
resulting downward pressure on our stock price could encourage investors to
engage in short sales of our common stock. By increasing the number of shares
offered for sale, material amounts of short selling could further contribute to
progressive price declines in our common stock.

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Restrictions on Transferability

A substantial number of the Companys presently outstanding
shares of Common Stock, are "restricted" securities and, may be sold in
compliance with Rule 144 adopted under the 1933 Act or Regulation S if certain
requirements are met. Rule 144 provides, in essence, that after six months from
the date of acquisition, a person, including affiliates, of the Company are
allowed unlimited public resales under Rule 144 provided that current public
information about the Company is available. After one year, a non-affiliate is
allowed unlimited public resales under Rule 144 and need not comply with any
other Rule 144 requirements. After the six-month holding period, affiliates may
resell in accordance with all Rule 144 requirements, which include: the
provision for current public information about the Company; volume limitations;
manner of sale requirements for equity securities; and filing of Form 144.

Investors should be aware of the possibility that sales under
Rule 144 or shares issued pursuant to Regulations S may, in the future, have a
depressing effect on the price of the shares of Company's common stock.

Dividend Policy

As of the date of this Form 10-KSB, we have not paid any
dividends on our common stock and we do not expect to declare or pay any
dividends on our common stock for the foreseeable future.

We have not adopted any anti-takeover provisions.

At the present time, our Board of Directors has not adopted any
shareholder rights plan or any anti-takeover provisions in our Charter or
Bylaws.

Our securities are subject to the requirements of the SEC
with regard to low-priced securities.

The Company's securities are subject to Rule 15g-9 under the
Securities Exchange Act of 1934, as amended, which imposes additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and "accredited investors" (generally,
individuals with net worth in excess of $1,000,000 or annual incomes exceeding
$200,000, or $300,000 together with their spouses). For transactions covered by
this rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, the rule may adversely affect the ability of
broker-dealers to sell the Companys securities and may adversely affect the
ability of shareholders to sell their shares in the secondary market.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION

We obtained the rights to the CTHA through a series of
transactions. Dr. James E. Smith ("Dr. Smith"), a tenured professor at West
Virginia University ("WVU"), directed the research and development of CTHA
utilizing WVU's facilities and funding. Under Dr. Smith's employment agreement
with WVU, the patentable ideas for the CTHA were assigned to West Virginia
University Research Corporation ("WVURC") and became its property on April 12,
1994. An exclusive worldwide license was granted by WVURC to Integral Concepts,
Inc. (ICI"), a corporation owned and controlled by Dr. Smith, to: (1)
manufacture the CTHA and, (2) sublicense others to manufacture, market, sell
copies of, license and distribute the CTHA (the "ICI License").

- 15 -

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ICI entered into an option agreement with SMR Investment Ltd.,
("SMR") a corporation owned by Sue Robertson, the wife of John Robertson, the
Company's President, Chief Executive Officer and a member of the Board of
Directors ("Robertson"), dated November 18, 1994, and amended December 16, 1994
(the Option Agreement"). The Option Agreement provided that ICI would issue a
sublicense to SMR for the CTHA subject to the payment of $250,000; a 3% royalty
from gross sales; and shares in a subsequent public entity. SMR and Robertson
organized the Company as a result. ICI retained all military and governmental
applications and resulting procurement interests. The contract period relating
to the three- percent royalty to be paid to ICI commences when sales are made by
us and continues during the life of the Option Agreement. The term of the Option
Agreement is perpetual as is the ICI License.

On December 13, 1994, we were assigned the rights to the Option
Agreement by SMR in consideration for $50,000 advanced by Access Information
Services, Inc. (the "Option Assignment"). Access Information Services, Inc. is a
corporation owned and controlled by Robertson.

On December 14, 1994, we issued 3,000,000 shares to Dr. Smith
and 3,000,000 shares to Access Information Services Ltd. pursuant to the Option
Assignment. The value assigned to the 3,000,000 shares issued to Dr. Smith was a
total of $0.50 and the value assigned to the 3,000,000 shares issued to Access
Information Systems, Inc. was $0.50. These valuations of the 3,000,000 shares
issued to Dr. Smith and Access Information Systems, Inc. were arbitrarily
determined by our Board of Directors. The $250,000 paid to ICI was a one-time
payment.

On July 10, 1995, ICI granted an exclusive worldwide sublicense
to us to: (1) manufacture, sell copies of, sublicense and distribute the process
and equipment related to the design, construction and operation of the CTHA;
and, (2) to sublicense others to manufacture, sell copies of, license and
distribute the same, excluding all military and governmental applications and
resulting procurement interests (the "Sublicense"). The Sublicense was the
culmination of the agreements between ICI and SMR, and SMR and us. On December
27, 1995, SMR assigned all of its rights and duties in the CTHA technology to us
pursuant to the Option Assignment. The term of the Sublicense, subject to
compliance of the terms thereof, is perpetual and requires the payment of a
minimum annual royalty of $3,000. Further, we will pay a royalty of l0% of the
net revenues derived from sales, leases or sublicenses of the CTHA technology
less a credit for the minimum royalty. In addition, we shall pay a royalty of 3%
of the gross revenues derived from the sales, leases or sublicenses of the CTHA
technology.

The Sublicense was amended effective March 4, 1997, to (i)
reduce the amount of the royalty payable by us by 50% over the next 3 years,
(ii) clarify that our rights pertain to commercial applications, excluding
military and governmental applications, and (iii) enlarge the definition of
Technology to include all future enhancements to the CTHA technology developed
by ICI, ETC, or us.

Effective March 17, 2005, we entered into a settlement and
release agreement with Integral Concepts Inc. (ICI) to terminate the exclusive
worldwide sublicense granted to the Company by ICI.

We entered into a Joint Venture Agreement ("JVA") with Emergent
Technologies Corporation (ETC) on March 4, 1997. The JVA required a new company
to be incorporated (TEAM) whereby we own 50% and ETC owns 50% of TEAM. Pursuant
to a voting agreement we can vote 100% of the shares of TEAM. The President of
ETC is the President of TEAM. TEAM was organized

- 16 -

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on June 4, 1997 under the laws of the State of West Virginia.
We retain the worldwide commercial sublicense rights to the CTHA excluding all
military and governmental applications.

The business purpose of TEAM was to cooperate in the research
and development of certain applications for the CTHA and to assemble and
manufacture certain products relating thereto. IAS was to buy product from TEAM
at cost to manufacture plus 30% for all commercial applications and ETC was to
buy product from TEAM at cost to manufacture plus 30% for all military
applications. ETC acquired the worldwide sublicense from ICI for all military
and governmental applications on January 2, 1997. TEAM is currently inactive.

WVURC received a patent for the CTHA in August 1995. Dr. Smith
is a tenured professor at WVU and conducts his research and development
regarding the CTHA at WVU's facilities. As a result, WVURC owns the patent
rights to the CTHA that it licensed to ICI. The ICI License provides that ICI
can grant sublicenses of the technology covered by the patent to third parties.
On July 10, 1995, we were issued the Sublicense by ICI, which was amended in
March 1997.

On July 29, 1997, we announced that the second US patent had
been granted on the CTHA. This patent broadened the protection we already had
for the CTHA by encompassing several different geometries not specifically
covered by the first patent.

On March 17, 2005, we entered into a Non-Exclusive License
Agreement with WVURC regarding the CTHA technology sublicense. IAS and WVURC
agree to license the CTHA technology back to IAS on a nonexclusive basis for the
worldwide rights. IAS will continue to pay a minimum royalty fee of US$3,000 to
WVURC and a royalty of 10% of the net sales, whichever is greater.

In addition, effective March 17, 2005, we entered into a
settlement and release agreement with West Virginia University Research
Corporation. WVRUC agreed to waive the US$315,778.50 research and development
payment due from IAS in consideration for the termination of the IAS sublicense
agreement with ICI. IAS will unconditionally release and discharge WVURC and
related parties from all claims IAS may have against them.

RESEARCH AND DEVELOPMENT

We spent $3,000 in 2008 on research and development as compared
to $3,000 in 2007. Research and development is required to keep the
Non-Exclusive License Agreement with WVURC regarding the CTHA technology license
in good standing.

NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES

We currently employ no full-time employees and utilize
contractors as required.

ITEM 2.       DESCRIPTION OF
PROPERTY

Our executive offices are located at #240-11780 Hammersmith
Way, Richmond, British Columbia V7A 5E9, and the telephone number is (604)
278-5996. We share this office space with companies with related directors and
officers. The Company occupied this space rent-free during the fiscal year.

- 17 -

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Oil and Gas Properties

Refer to Item 1. Business of the Company for further
information on our oil and gas properties.

The Company entered into an agreement dated April 6, 2005 with
a private company controlled by the President of the Company to acquire a
working interest in two oil wells located in Burleson County, Texas. The Company
agreed to issue up to 1,000,000 shares (issued - 279,477) of restricted common
stock at the rate of one share for every $0.10 of revenue from the wells. The
wells are producing but a value cannot be placed on them due to vertical
fracture features that prevent the estimation of reserves.

On April 7, 2008, the Company entered into an agreement to
dispose of its interest in the three Kentucky gas wells to Teryl Resources Corp.
In consideration, the Company received a deposit of $25,000 with the balance to
be determined following the preparation of an independent valuation report by a
qualified petroleum geologist. All revenues from these wells will be received by
Teryl upon execution of this agreement. Subsequent to year-end, both parties
agreed to indefinitely suspend the agreement due to the difficulty of obtaining
an independent valuation report due to the vertical fracture of the wells. As
such, the $25,000 paid to the Company is due to Teryl.

Exploratory and Development Wells Drilled

We have participated in the drilling of several wells during
the last three fiscal years.

In June 2006, the Ken Lee #1 well was successfully completed as
a commercial gas well. The initial open flow tested 1.22 MCF of high BTU gas.
The well was completed to a depth of 1410' in the Big Lime formation. In July
2006, we commenced the drilling of the Elvis Farris #2 well, located on the
Farris Lease, in Laurel County, Kentucky. On November 1, 2006 we announced that
the Clarence Bright #1 well in Laurel County, Kentucky is completed. The total
depth on the well was 1742 feet with two production zones, one in the Big Lime @
1240 to 1250 and one in Waverly @ 1252 to 1260. The open flow was 747 MCF with
230 PSI.

The two producing wells located in Burleson County, Texas are
producing but a value cannot be placed on them due to vertical fracture features
that prevent the estimation of reserves.

Miscellaneous

We are not obligated to provide quantities of oil or gas in the
future under existing contracts or agreements. We have not filed any reports
containing oil or gas reserve estimates with any federal or foreign governmental
authority or agency within the past 12 months.

ITEM 3.       LEGAL PROCEEDINGS

To the best of the knowledge of our Officers and Directors,
neither the Company nor any of our Officers and Directors is party to any
material legal proceeding or litigation other than as described below. Further,
our Officers and Directors know of no threatened or contemplated legal
proceedings or litigation other than as described below. None of our Officers
and Directors has been convicted of a felony and none has been convicted of any
criminal offense, felony or misdemeanor, relating to securities or performance
in corporate office. To the best of the knowledge of our Officers and Directors,
no investigations of felonies, misfeasance in office or securities
investigations are either pending or threatened at the present time.

- 18 -

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The Company was sued in April 1998 in a civil action filed in
U.S. District Court for the District of Oregon (the Oregon Litigation). The
Plaintiff, Kirk VanVoorhies, (Plaintiff) sought money damages and equitable
relief against the Company alleging patent infringement by the Company for the
CTHA. The Company notified West Virginia University (WVU) of this claim and
contacted WVU to assist in the defense. WVU owns the patent rights to the CTHA
technology, which were licensed to the Company. Two patents were granted for the
CTHA to WVU; one in August 1995, and another in August 1997. The Plaintiffs
patent was approved on March 31, 1998.

The Plaintiff in the Oregon Litigation is also a defendant in a
pending civil action in the U.S. District Court for the Northern District of
West Virginia brought by WVU (the West Virginia Litigation) claiming that the
CTHA invention is owned by WVU. As alleged in the West Virginia Litigation, the
Company believes that the patent rights for the CTHA technology belongs to WVU
and therefore based on the license, the Company owns the worldwide rights to the
CTHA commercial applications.

VorteKx, Inc. brought a patent infringement action against IAS
in the United States District Court for the District of Oregon on a patent
issued to a former graduate student at WVU, Kurt L. VanVoorhies, and
subsequently assigned to VorteKx. On the Company's motion, the case was
transferred to the Northern District of West Virginia and consolidated with a
previously pending action filed by WVU against VanVoorhies, discussed above. The
Company and WVU both claimed that the technology covered by the patent is
actually owned by WVU. The Company is the sublicensee of commercial applications
of the CTHA technology.

In a Memorandum Opinion and Order entered February 17, 2000,
the West Virginia federal court granted summary judgment for WVU in its claims
against VanVoorhies. The Court also dismissed VanVoorhies' claims against WVU
and third-party defendants West Virginia University Research Corporation, Dr.
James E. Smith and Integral Concepts, Inc. Because the Court's holding
establishes that WVU owns the technology, it should bring an end to the
litigation against the Company, which was stayed pending resolution of the case
against VanVoorhies.

The dispute in the WVU action concerned inventions conceived
during VanVoorhies' time at WVU as a graduate student and later as a graduate
research assistant, particularly two inventions relating to the CTHA technology.
The Court found that VanVoorhies validly assigned all rights in the first
invention to WVU, including all future technology derived from the technology
underlying that invention. VanVoorhies subsequently declined to assign to WVU
any interest in a second invention. The Court found that the second invention
constituted future technology derived from the first invention. Therefore,
VanVoorhies' assignment of the first invention to WVU also effectively assigned
the second invention to WVU, and WVU is the rightful owner of the patent
applications filed by VanVoorhies on the CTHA technology.

Because one of these patent applications led to the issuance of
the patent underlying VorteKx's infringement suit against the Company, VorteKx
no longer has standing to pursue that infringement case. The case was stayed
pending VanVoorhies' appeal from the Court's order. On May 20, 2004 the United
States Court of Appeals affirmed the stay of the case.

- 19 -

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By sublicense agreements dated July 10, 1995, the Company was
granted an exclusive worldwide sublicense by Integral Concepts Inc. (ICI) and
West Virginia University Research Corporation (WVURC) to the Contrawound
Toroidal Helical Antenna (CTHA) technology, excluding all military and
governmental applications and resulting procurement interests. On March 17,
2005, the Company entered into settlement and release agreements with each of
ICI and WVURC to terminate the July 10, 1995 agreements. Accordingly, the
Company was released from all previously accrued royalty fees.

On March 17, 2005, the Company entered into a non-exclusive
license agreement with WVURC for the development, manufacture, use and sale of
the CTHA technology. The agreement was retroactively effective on January 15,
2005. The terms of the non-exclusive sublicense agreement are as follows:

| | (i)   | The Company will pay a license fee of $3,000 for each
      calendar year, payable on or before January 15 of each year
  (paid).
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                  
| | (ii)  | The Company will pay a royalty of 10% of net
sales.                                                                              
| |       |                                                                                                                                  
| | (iii) | The Company will pay a royalty of 50% of all other
      sublicense revenues.                                                    

All royalties in items (ii) and (iii) are payable within 30
days of each calendar quarter. The terms of the agreement remain in effect until
the expiration of the last patent to expire that is included in the CTHA
technology.

ITEM 4.       SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS

On May 24, 2007, at a special and general meeting of the
shareholders of the Company, the shareholders of the Company approved the
following changes to the Companys articles of incorporation:

- The name of the Company was changed to IAS Energy, Inc.;
- The corporate purpose was amended and clarified; and
- Reduction of the number of shares required to amend the articles of
  incorporation from two-thirds to a majority.

Additionally, the board of directors, as previously reported to
the Securities and Exchange Commission, was re-elected in its entirety. John G.
Robertson, James L. Vandeberg, and Jennifer Lorette were elected directors of
the Company to hold office until the next annual meeting of the shareholders and
until their successors are elected and qualified or until they resign or are
removed from office.

The shareholders approved Smythe Ratcliffe LLP, Chartered
Accountants as auditor of the Company until the next Annual Meeting of
Shareholders.

The following states the number of votes cast for and against
each matter voted at the shareholders meeting:

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|   |                                                                                                                                                    | For        | Against
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | -------
|1. | To elect as Director, John Robertson                                                                                                               | 31,443,944 | 81,420 
|2. | To elect as Director, Jennifer Lorette                                                                                                             | 31,445,394 | 79,970 
|3. | To elect as Director, James Vandeberg                                                                                                              | 31,445,394 | 79,970 
|4. | Appointment of Smythe Ratcliffe LLP Chartered Accountants as auditors of
      the Company                                                         | 31,535,164 | 200    
|5. | To amend the Articles of Incorporation to change the name of the Company
      to IAS Energy, Inc.                                                 | 31,507,664 | 17,700 
|6. | To amend the Articles of Incorporation to reduce the number of shares to
      be voted to approve an amendment to the articles of incorporation   | 31,476,561 | 48,803 
|7. | To amend the Articles of Incorporation to change the business purpose of
      the Company                                                         | 31,506,464 | 18,900 
|8. | To grant the proxyholder authority to vote at his/her discretion on any other
      business or amendment or variation to the previous resolutions | 31,457,811 | 67,553 

The Oregon Secretary of State, Corporation Department, accepted
the amendment as filed May 30, 2007.

PART II

ITEM 5.       MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF
EQUITY SECURITIES.

Our Common Stock trades on the OTC Bulletin Board under the
symbol "IASCA.OB" where it has traded since April 16, 1996. Our Common Stock has
traded at between $0.010 and $4.62 per share since April 16, 1996.

The following table sets forth the high and low prices for the
Company's Common Stock, as reported by Nasdaq Trading & Market Services for
the quarters presented. These quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions, and may not reflect actual
transactions.

|                               | Bid Price* |  | Asked Price* | 
|------------------------------ | ---------- |  | ------------ | 
|                               | High $     |  | Low $        | 
|Quarter Ended July 31, 2006    | 0.45       |  | 0.32         | 
|Quarter Ended October 31, 2006 | 0.40       |  | 0.25         | 
|Quarter Ended January 31, 2007 | 0.33       |  | 0.15         | 
|Quarter Ended April 30, 2007   | 0.24       |  | 0.15         | 
|Quarter Ended July 31, 2007    | 0.53       |  | 0.15         | 
|Quarter Ended October 31, 2007 | 1.10       |  | 0.23         | 
|Quarter Ended January 31, 2008 | 1.36       |  | 0.35         | 
|Quarter Ended April 30, 2008   | 0.39       |  | 0.20         | 

_________ * All prices are in U.S. dollars.

(Information provided by The Over The Counter Bulletin Board.
The quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

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As of August 11, 2008 there were 69,913,817 shares of Common
Stock outstanding, held by 140 shareholders of record.

The following table shows the high and low closing bid prices
of our stock traded on the OTC Bulletin Board during the most recent six months,
for each month as follows:

Bid
        PriceMonth
      High*
      Low*2008, July
      $0.25
      $0.162008, June
      $0.231
      $0.17852008, May
      $0.235
      $0.2152008, April
      $0.27
      $0.202008, March
      $0.32
      $0.202008, February
      $0.39
      $0.32


_________ * All prices are in U.S. dollars.

(Information provided by The Over The Counter Bulletin Board.
The quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

DIVIDEND POLICY

To date we have not paid any dividends on our Common Stock and
do not expect to declare or pay any dividends on such Common Stock in the
foreseeable future. Payment of any dividends will be dependent upon future
earnings, if any, our financial condition, and other factors as deemed relevant
by our Board of Directors.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information about our common
stock that may be issued upon the exercise of options, warrants and rights under
all of our equity compensation plans as of April 30, 2008.

Plan Category
    Number of securities to be
      issued upon exercise of outstanding options,
      warrants and rights
    Weighted-average exercise price
      of outstanding options, warrants and rights
      (3)(4)
    Number of securities remaining
      available for future issuance under equity
      compensation plansEquity compensation plans approved by security
      holders: 1999 Amended Stock    Option Plan (1) and
         2007 Stock Option    Plan (2)
    2,212,500
    $0.29
    1,569,000Equity compensation plans not approved by security
      holders
    N/A
    N/A
    N/A


| | (1) | The Company has a Stock Option Plan to issue up to
      2,500,000 shares to certain key directors and employees, approved and
      registered October 2, 1996, and amended, the 1999 Amended Plan as
      approved by the board of direction on May 28, 1999. Pursuant to the 1999
      Amended Plan, the Company has granted stock options to certain directors
      and employees.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (2) | The Company has a further Stock Option Plan to issue up
      to a further 2,000,000 shares to certain key directors and employees, the
      2007 Plan as approved by the board of direction on October 22, 2007.
      Pursuant to the 2007 Plan, the Company has granted stock options to
      certain directors and employees.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                      
| | (3) | The price reflects the weighted average exercise price of
      those options which are vested and exercisable.                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                      
| | (4) | The weighted average exercise price of those options
      which are exercisable (512,500 options) is $0.30.                                                                                                                                                                                                                         

The Company has a Stock Option Plan to issue up to 2,500,000
Class A common shares to certain key directors and employees, approved and
registered October 2, 1996, as amended (the 1999 Amended Plan). Pursuant to
the 1999 Amended Plan, the Company has granted stock options to certain
directors and employees and registered them on Form S-8 with the Securities and
Exchange Commission.

On October 22, 2007, the Company approved the 2007 Stock Option
Plan (the 2007 Plan) to issue up to 2,000,000 Class A common shares to
directors and employees and registered them on Form S-8 with the Securities and
Exchange Commission.

All options granted by the Company under the 1999 Amended Plan
have the following vesting schedule: These options vest as follows:

| | (i)   | 25% of the options vest upon granting of the option; such
      initial exercise is referred to as the First Vesting;                                           
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                   
| | (ii)  | The second 25% of the options vest 90 days from the date
      of exercise of the First Vesting; such second vesting is referred to as
      the Second Vesting;
| |       |                                                                                                                                                                   
| | (iii) | The third 25% of the options vest 90 days from the date
      of the exercise of Second Vesting; such third vesting is referred to as
      the Third Vesting;  
| |       |                                                                                                                                                                   
| | (iv)  | The fourth and final 25% of the options vest 90 days from
      the date of exercise of the Third Vesting; and.                                                   
| |       |                                                                                                                                                                   
| | (v)   | The options expire 60 months from the date of
    grant.                                                                                                          

During the fiscal year ended April 30, 2008, the Company
granted 1,000,000 options in accordance with the terms of the Power Telecom
Option Agreement. These options were granted under the 2007 Plan and have the
following vesting schedule:

| | (i)   | 12.5% of the options vest on the day that the Company
      issues ten million of its shares to Power Telecom as per the option
      agreement. Refer to Note 11.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                   
| | (ii)  | Every 90 days thereafter, an additional 12.5% of the
      grant shall vest; and                                                                                  
| |       |                                                                                                                                                                   
| | (iii) | The options expire 60 months from the date of
    grant.                                                                                                          

RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and sales
of our securities without registration during the past fiscal year. No such
sales involved an underwriter and no commissions were paid in connection with
the sale of any securities, except as specified below. See the Statement of
Stockholders Equity and the Notes to our audited financial statements for the
fiscal year ended April 30, 2008 for more information on recent sales of
unregistered securities.

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| | (1) | On March 5, 2008, in accordance with the terms of the
      Option Agreement with Power Telecom as described in Item 1. Business of
      the Company, the Company issued 10,000,000 Class A common shares to
      acquire 20% of Power Telecom. In addition, 1,000,000 Class A common
      shares were issued as a finders fee. This offering was exempt from
      registration under Rule 506 and Section 4(2) of the Securities Act of
      1933, as amended (the "Act"). Each certificate representing securities
      issued bears a legend restricting transfer. In addition, if the exemptions
      under Rule 506 under and Section 4(2) of the Act are not available, the
      sales, which were all to non-U.S. residents, were exempt pursuant to
      Regulation S under the Act.    
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (2) | On February 12, 2008, the Company issued 33,000 units at
      $0.40 per unit pursuant to a private placement for cash proceeds of
      $12,704, net of issue costs of $496. Each unit consists of one Class A
      share and one warrant. Each warrant enables the holder to purchase an
      additional share at an exercise price of $0.50 per share for one year
      after closing date. This offering was exempt from registration under Rule
      506 and Section 4(2) of the Act. Each certificate representing securities
      issued to the investors in this private placement bears a legend
      restricting transfer.                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (3) | On January 28, 2008, the Company issued 25,000 units at
      $0.40 per unit pursuant to a private placement for cash proceeds of
      $9,199, net of issue costs of $801. Each unit consists of one Class A
      share and one warrant. Each warrant enables the holder to purchase on
      additional share at an exercise price of $0.50 per share for one year
      after closing date. This offering was exempt from registration under Rule
      506 and Section 4(2) of the Act. Each certificate representing securities
      issued to the investors in this private placement bears a legend
      restricting transfer.                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (4) | On November 26, 2007, in accordance with the terms of the
      Option Agreement with Power Telecom as described in Item 1, Business of
      the Company, the Company issued 10,000,000 Class A common shares to
      acquire 20% of Power Telecom. In addition, 1,000,000 Class A common
      shares were issued as a finders fee. This offering was exempt from
      registration under Rule 506 and Section 4(2) of the Act. Each certificate
      representing securities issued to the investors in this private placement
      bears a legend restricting transfer. In addition, if the exemptions under
      Rule 506 under and Section 4(2) of the Act are not available, the sales,
      which were all to non-U.S. residents, were exempt pursuant to Regulation S
      under the Act.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (5) | On October 29, 2007, the Company issued 49,500 Class A
      shares for services with a fair value of $42,075. This offering was exempt
      from registration under Rule 506 and Section 4(2) of the Act. Each
      certificate representing securities issued bears a legend restricting
      transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (6) | On August 31, 2007, the Company issued 100,000 units,
      each unit consisting of one Class A share and one share purchase
      warrant, for services. Each warrant entitles the holder to acquire one
      additional Class A share for $0.40, until August 31, 2009. The fair
      value of the shares and warrants were $32,000 and $18,681, respectively.
      This offering was exempt from registration under Rule 506 and Section 4(2)
      of the Act. Each certificate representing securities issued bears a legend
      restricting transfer.                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (7) | During the fiscal year ended April 30, 2008, the Company
      issued 40,000 Class A shares at $0.40 per share upon the exercise of
      warrants for proceeds of $16,000. This offering was exempt from
      registration under Rule 506 and Section 4(2) of the Securities Act. Each
      certificate representing securities issued to the investors bears a legend
      restricting transfer. In addition, if the exemptions under Rule 506 under
      and Section 4(2) of the Act are not available, the sales of $16,000 were
      exempt pursuant to Regulation S under the Act.                                                                                                                                                                                                               

- 24 -

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Refer to the Notes 8, 9, 10 and 11 to our audited financial
statements for the years ended April 30, 2008 and April 30, 2007 for future
commitments to issue unregistered securities.

ITEM 6:       MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

This report contains forward-looking statements. The words,
"anticipate", "believe", expect", "plan", "intend", "estimate", "project",
"could", "may", "foresee", and similar expressions are intended to identify
forward-looking statements. The following discussion and analysis should be read
in conjunction with our Financial Statements and other financial information
included elsewhere in this report which contains, in addition to historical
information, forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below, as well as those discussed elsewhere
in this report.

PLAN OF OPERATIONS

We were incorporated on December 13, 1994 pursuant to the Laws
of the State of Oregon, USA. Our principal business operations are conducted in
British Columbia, Canada.

We are a development stage company, formerly engaged in the
acquisition and exploration of oil and gas interests in North America, and the
commercialization of an antenna technology. We are presently pursuing our option
to acquire up to a 100% interest in Power Telecom Limited of Hong Kong. Power
Telecom Limited owns the rights to the Chinese web site www.video1314.com.
Video1314 is a fast growing Chinese Web 2.0 platform (similar to
www.youtube.com) that allows users to share videos, music, and audio as well as
sell goods and services using videos in its marketplace. Since its launch,
Video1314 has attracted millions of users and is fast becoming one of Asias top
Web2.0 destinations. Video1314 currently serves the Greater China region, which
includes mainland China, Hong Kong, Macau and Taiwan. The features of the site
are focused on free online photo, video and audio sharing; a marketplace to buy
and sell goods using video, photo and audio technologies; and online educational
gaming. In a development stage company, management devotes most of its
activities to establishing a new business. Planned principal activities have not
yet produced significant revenues and we have suffered recurring operating
losses as is normal in development stage companies. We also have a working
capital deficiency of $678,031 as at April 30, 2008, which our auditors have
stated raises substantial concern on our ability to meet planned business
objectives and ongoing operations for the next twelve months. Our ability to
emerge from the development stage with respect to our planned principal business
activity is dependent upon our successful efforts to raise additional equity
financing, receive funding from affiliates and controlling shareholders.

This review of the results of operations should be read in
conjunction with our audited financial statements for the years ended April 30,
2008 and April 30, 2007.

Results of Operation for the Year Ended April 30, 2008 ("2008")
as compared to the Year Ended April 30, 2007 ("2007")

During 2008 the Company had revenue of $20,201 from operations
as compared to $24,060 for 2007.

The Company had a net loss of $945,351 in 2008, compared to a
net loss of $24,619 in 2007, which includes an increase in operating expenses of
$532,357 to $630,441 in 2008 as compared

- 25 -

---

to $98,084 in 2007. The increases in 2008 were mainly due to an
increase in professional fees of $271,893 and an increase in office expenses of
$254,528.

Our office expenses increased by $254,528 to $292,408 in 2008
as compared to $37,880 in 2007. This increase was due to stock-based
compensation for investor relations expenses.

Fees payable to our transfer agent increased from $1,727 during
the fiscal year ended April 30, 2007 to $8,797 in 2008 due to the Companys
shareholders meeting held during the first quarter of fiscal 2008. The Company
did not hold a shareholders meeting during fiscal 2008. Professional fees
increased by $271,893 to $322,578 in 2008 from $50,685 in 2007 mainly as a
result of due diligence and completion of the Option Agreement with Power
Telecom Limited.

We recorded an increase in stock-based compensation of $41,961
to $90,671 in 2008 as compared to $48,710 in 2007. This was due to the vesting
of stock options and issue of new stock options.

During the fiscal year ended April 30, 2007, the Company
extended the term on 1,200,000 options for a further five years. The fair value
of the original options was deducted from the fair value of the modified options
for a difference of $194,840. During the fiscal year ended April 30, 2008,
$4,059 (April 30, 2007, - $48,710) stock-based compensation expense was charged
to operations for the vested incremental increase in the fair value of these
stock options. The balance of $142,071 of unrecognized compensation cost related
to the non-vested stock options held by employees will be recognized over future
periods.

During the fiscal year ended April 30, 2008, the Company
granted 1,000,000 options in accordance with the terms of the Power Telecom
Option Agreement as described in Note 11 of the financial statements. During the
fiscal year ended April 30, 2008, $66,988 stock-based compensation expense was
charged to operations, and the balance of $200,966 of unrecognized compensation
cost related to the non-vested stock options will be recognized over future
periods as they vest.

We had a decrease in gain on sale of available-for-sale
securities of $100,830 to $1,920 in 2008 as compared to $102,750 in 2007. This
was due to the decrease in the sale of securities available-for-sale.

The gain on the write-off of payables of $nil in 2008 as
compared to $9,101 in 2007, was due to the Company reaching settlement
arrangements with long outstanding accounts payable to reduce and settle the
amounts owing to the creditors. Accordingly, the Company recorded a gain equal
to the amount of the accounts payable reduction.

As at April 30, 2008, the Company owed related companies
controlled or significantly influenced by the President of the Company $830,021
(April 30, 2007 - $458,497) comprised of advances and/or expenses paid on behalf
of the Company. The amounts are non-interest bearing, unsecured and without
specific terms of repayment.

As at April 30, 2008, the Company was owed by related companies
controlled or significantly influenced by the President of the Company $21,139
(April 30, 2007 - $32,357) comprised of advances and/or expenses paid by the
Company. The amounts are non-interest bearing, unsecured and without specific
terms of repayment.

The Companys oil and gas wells located in Burleson County,
Texas are producing but a value cannot be placed on them due to vertical
fracture features that prevent the estimation of reserves. Accordingly,
cumulative impairment loss of $196,763 equal to the investment in the oil wells
that

- 26 -

---

would have otherwise been recorded has been charged to
operations. During the fiscal year ended April 30, 2008, $80,892 (2007 -
$62,446) of impairment loss was incurred. The approximately 496,000 shares of
restricted common stock issuable at April 30, 2008, pursuant to an agreement
with a private company controlled by the President of the Company to issue up to
1,000,000 shares of common stock at the rate of one share for every $0.10 of
revenue from the wells, have been recorded at the quoted market price prevailing
at the time of receipt of the oil and gas revenues and are accrued in the amount
of $143,338 in obligation to issue shares.

On May 4, 2006, the Company entered into an agreement with
Energy Source Inc. (ESI) to drill up to 24 gas wells located in Kentucky. The
Company can earn a 100% working interest (60% net revenue interest) in four gas
wells by paying $185,000 per well and has the option to acquire a 100% working
interest (60% net revenue interest) in an additional 20 wells over an 18-month
period at a price to be agreed upon. During the fiscal year ended April 30,
2008, the option for the additional 20 wells expired. Each well is subject to a
12.5% net revenue interest to the landowner and a 27.5% interest to ESI. The
first three wells have been paid for and drilled to date. On May 18, 2006, the
Company entered into an agreement with Teryl Resources Corp. (Teryl), a public
company related by common directors and officers, to farm-out a 40% working
interest outlined above, subject to a 12.5% net revenue interest to the
landowner and a 27.5% interest to ESI, in consideration for paying 50% of the
total costs of the wells. The Company received $277,500 from Teryl during the
year ended April 30, 2007, representing 50% of the cost of drilling the first,
second and third wells. On September 28, 2006, the Company assigned a 20%
working interest (12% net revenue interest) in the third well drilled as part of
a financing agreement.

To April 30, 2008, the Companys portion of the revenue from
the wells was approximately $31,697. During the fiscal year ended April 30,
2008, the Company received/accrued $17,205 of revenues from the wells, and
recorded depletion of $1,470 on capitalized costs relating to this area.

Due to the difficult of obtaining an independent valuation
report due to the vertical fracture of the wells, the total cost of $273,426
(2007 - $nil) was impaired and charged to operations during the fiscal period
ended April 30, 2008.

We had a basic and diluted loss of $0.02 per share in 2008
compared to a diluted net loss per share of $nil for 2007.

LIQUIDITY AND CAPITAL RESOURCES

In the past, we have derived most of our development and
operating capital primarily from the issuance of capital stock. We have also
received minimal revenue from our oil and gas wells.

We have been successful in the past in acquiring capital
through the issuance of shares of our Common Stock, and through advances from
related parties. Although we intend to continue utilizing these sources, there
has been no assurance in the past that these sources and methods would continue
to be available in the future.

We received funding in 2008 from our affiliated companies
(common officers and directors). The total amount owing to related parties is
$830,021 or 89% of total current liabilities as at April 30, 2008. The balances
owing to related parties are non-interest bearing, unsecured and repayable on
demand. Our affiliated companies have indicated that they will not be demanding
repayment of these funds during the next fiscal year and will advance, or pay
expenses on behalf of the Company if further funds are needed.

- 27 -

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The audited financial statements have been prepared assuming
that the Company will continue as a going-concern. As discussed in note 1 to the
financial statements, the Company has minimal revenues and limited capital,
which together raise substantial doubt about its ability to continue as a
going-concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Subsequent to the fiscal year ended April 30, 2008, we received
subscriptions pursuant to a private placement for cash proceeds of $4,000.

We anticipate that our estimated cash requirements for the
fiscal year ending April 30, 2009 will remain approximately $450,000 being the
same as our previous cash requirements of $450,000 incurred during the fiscal
year ended April 30, 2008 for operational expenses. Expenditures for future
option exercises for Video1314 during fiscal 2009 cannot be specifically
confirmed as of the date of this 10-KSB, as the Company shall determine if it
will continue to exercise the options, which may be dependant upon our ability
to raise sufficient capital to accomplish these option exercises.

In the event that no other sources of capital were available to
us in the future, on a reasonable financial basis, we would face the same
obstacles as many small, undercapitalized companies do, and, in the worst case,
we could be forced to reorganize or liquidate, either of which consequence would
likely have an adverse financial effect upon our shareholders.

During 2008 we financed our operations and received $320,324 as
follows:

| | (i)   | financial support from related parties in the amount of
      $244,917. These amounts are unsecured, non-interest bearing and due on
      demand;
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | $65,403 from the issuance of shares of common stock;
      and                                                                                    
| | (iii) | $4,000 from subscription for shares of common
    stock.                                                                                          

During 2008 we invested these funds as follows:

| | (i)   | $134,064 of these funds was spent on operating activities
      as discussed above under Results of Operation for the year ended April 30,
      2008;
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | $200,000 was used as capital for Power Telecom;
  and                                                                                                 
| | (iii) | $2,240 was received from sale of available-for-sale
      securities.                                                                                 

As at April 30, 2008, our cash position was $785 as compared to
$12,285 in 2007, and our working capital deficit was $678,031.

During 2007 we financed our operations and received $385,000 as
follows:

| | (i)  | financial support from related parties in the amount of
      $185,000. These amounts are unsecured, non-interest bearing and due on
      demand; and
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | $200,000 from the issuance of shares of common
    stock.                                                                                             

During 2007 we invested these funds as follows:

| | (i)   | $82,400 of these funds was spent on operating activities
      as discussed above under Results of Operation for the year ended April 30,
      2007;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | $277,500 was invested in oil and gas properties;
    and                                                                                             
| | (iii) | $13,000 was used in the purchase of
  securities.                                                                                                    

- 28 -

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As at April 30, 2007, our cash position was $12,285 as compared
to $313 in 2006, and our working capital deficit was $243,546.

We may raise additional funds through the exercise of warrants
and stock options, if exercised. Options with respect to 2,212,500 shares may be
exercised for potential proceeds of $641,625. Warrants with respect to 368,000
shares may be exercised for potential proceeds of $154,560. These options and
warrants are currently not in-the-money and are unlikely to be currently
exercised.

ITEM 7:       FINANCIAL
STATEMENTS

Our financial statements are included and begin immediately
following the signature page to this report. See Item 13 for a list of the
financial statements and financial statement schedules included.

ITEM 8.       CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 8A.     CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with
the participation of our management, including the President (our principal
executive officer), and the Chief Financial Officer (our principal financial
officer), of the effectiveness of the design and operation of our disclosure
controls and procedures [as defined in the Exchange Act Rule 13a-15(e)] as of
the end of the period covered by this report (the evaluation date). Based upon
the evaluation of the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report, our President and Chief
Financial Officer have concluded that, as of such date, the disclosure controls
and procedures were effective at the reasonable assurance level with respect to
such disclosure controls and procedures being designed to ensure that
information relating to the Registrant required to be disclosed by the Company
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC. Additionally, our officers concluded that our disclosure controls
and procedures are effective to ensure that information required to be disclosed
in the reports that the Company files or submits under the Exchange Act is
accumulated and communicated to our management, including our President, and our
Chief Financial Officer, to allow timely decisions regarding required
disclosure.

There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable, and not absolute assurance, of achieving the desired control
objectives, and management necessarily was required to apply its judgement in
evaluating the cost-benefit relationship of possible controls and procedures.

There was no significant change in our internal control over
financial reporting that occurred during our most recently completed fiscal year
ended April 30, 2008 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Nor were

- 29 -

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there any significant deficiencies or material weaknesses in
our internal controls requiring corrective actions.

Managements Report on Internal Control Over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Internal control over financial reporting includes those
policies and procedures that: (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of its
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in
the effectiveness of any system of internal control, and accordingly, even
effective internal control can provide only reasonable assurance with respect to
financial statement preparation and may not prevent or detect material
misstatements. In addition, effective internal control at a point in time may
become ineffective in future periods because of changes in conditions or due to
deterioration in the degree of compliance with our established policies and
procedures.

A material weakness is a significant deficiency, or combination
of significant deficiencies, that results in there being a more than remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

Under the supervision and with the participation of our
President and Chief Financial Officer, management conducted an evaluation of the
effectiveness of our internal control over financial reporting, as of the
evaluation date, based on the framework set forth in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on its evaluation under this framework, management
concluded that our internal control over financial reporting was effective as of
the evaluation date.

There were no changes in the Companys internal controls that
have materially affected, or are reasonably likely to materially affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

This Annual Report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management's report in this annual report.

ITEM 8B.     OTHER INFORMATION.

None.

- 30 -

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PART III

ITEM 9.       DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth the name, age and position of
each Executive Officer, Director and Significant Employee of the Company:

|Name              | Age | Position                                                                                                          
|----------------- | --- | ------------------------------------------------------------------------------------------------------------------
|                  |     |                                                                                                                   
|John G. Robertson | 67  | Principal
        Executive Officer, President, Chairman of the Board and Member of the
        Board of Directors
|Jennifer Lorette  | 36  | Secretary and Member of the
        Board of Directors                                                            
|James Vandeberg   | 64  | Chief Operating
        Officer, Chief Financial Officer and Member of the Board of Directors                     

All our Directors have served since the formation of the
Company in December 1994, except for James L. Vandeberg, who was appointed to
the Board of Directors in November 1998. The Executive Officers were elected on
February 4, 1995, except for James L. Vandeberg, who was appointed as Chief
Operating Officer on August 1st, 1999, and Chief Financial Officer in
November 2001. All officers currently devote part-time to our operations.

There are no family relationships between any director or
executive officer and any other director or executive officer.

The present and principal occupations of our directors and
executive officers during the last five years are set forth below:

John G. Robertson - President, Principal Executive Officer and
a Member of the Board of Directors

Mr. Robertson has been the President and Principal Executive
Officer and a Director of the Company since its formation. Mr. Robertson has
been Chairman, President and Chief Executive Officer of REGI U.S., Inc. since
July 1992. Since October 1984 Mr. Robertson has been President and a Director of
Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
Exchange and OTC BB that has financed the research on the Rand Cam Engine since
1986. REGI U.S. is controlled by Rand Energy Group, Inc., a British Columbia
corporation of which Reg Technologies Inc. is the majority shareholder. REGI
U.S. owns the U.S. rights to the Rand Cam (TM) technology and Rand Energy Group,
Inc. owns the worldwide rights exclusive of the U.S. Since June 1997 Mr.
Robertson has been President, Principal Executive Officer and a Director of
Information-Highway.com, Inc., an inactive Florida corporation traded on the
PinkSheets, and its predecessor. He is also the President and Founder of Teryl
Resources Corp., a public company trading on the TSX Venture Exchange and the
OTC BB involved in gold, and oil and gas exploration. He is also President of
Linux Gold Corp., a public company trading on the OTC Bulletin Board. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of
SMR Investments Ltd., a British Columbia corporation engaged in the business of
management and investment consulting.

James L. Vandeberg - Chief Operating Officer, Chief Financial
Officer and a Member of the Board of Directors

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Mr. Vandeberg became a Director of the Company in November
1998, its Chief Operating Officer in August 1999 and its Chief Financial Officer
in November 2001. Mr. Vandeberg is an attorney in Seattle, Washington. He has
served as our legal counsel since 1996. Mr. Vandeberg's practice focuses on the
corporate finance area, with an emphasis on securities and acquisitions. Mr.
Vandeberg was previously general counsel and secretary of two NYSE companies. He
is a director of Information-Highway.com, Inc., an inactive Florida corporation
traded on the Pink Sheets. He is also a director of REGI U.S., Inc., an Oregon
corporation traded on the OTC Bulletin Board since November 1998 and its Chief
Operating Officer since November 1999 and Chief Financial Officer since January
2006. Mr. Vandeberg is also a director of Reg Technologies Inc. which is traded
on the OTC Bulletin Board and the TSX Venture Exchange. Mr. Vandeberg has also
been a director of ASAP Expo Inc. since May 2005. He is a member and former
director of the American Society of Corporate Secretaries. He became a member of
the Washington Bar Association in 1969 and of the California Bar Association in
1973. Mr. Vandeberg graduated cum laude from the University of Washington with a
Bachelor of Arts degree in accounting in 1966, and from New York University
School of Law in 1969, where he was a Root-Tilden Scholar.

Jennifer Lorette - Secretary and a Member of the Board of
Directors

Ms. Lorette is a founder, and has been Secretary/Treasurer,
Principal Financial Officer and Principal Accounting Officer of the Company
since February 1995, and ceased to be the principal accounting officer in
November 2001. Since June 1994 Ms. Lorette has been Vice President and director
of REGI U.S., Inc., an Oregon corporation traded on the OTC Bulletin Board.
Since April 1994 she has also been Vice President of Administration and
Secretary for Reg Technologies, Inc., a British Columbia corporation listed on
the TSX Venture Exchange and OTC BB that has financed the research on the Rand
Cam Engine since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a
British Columbia corporation of which Reg Technologies Inc. is the majority
shareholder. Since June 1997 Ms. Lorette has been Executive Vice President and a
Director of Information-Highway.com, Inc., an inactive Florida corporation
traded on the PinkSheets, and its predecessor. Since June 1994 Ms. Lorette has
also been Vice President and Secretary of Linux Gold Corp, a BC company which
trades on the OTC BB. Since November 1997 Ms. Lorette has been Vice President of
Teryl Resources Corp., a BC public company trading on the TSX Venture Exchange
and the OTC BB involved in gold, and oil and gas exploration. She also became a
director in February 2001.

Audit Committee

Our Audit Committee consists of the entire Board of Directors
of the Company. None of the members of the Audit Committee are independent
directors.

We do not currently have a financial expert on our audit
committee due to our relatively small size. In 2008, we relied upon the services
of a chartered accounting firm in Vancouver, BC, Canada, to prepare our interim
unaudited quarterly financial statements. Also, we retained the services of
Smythe Ratcliffe LLP, Chartered Accountants to perform the audit on our year-end
financial statements and review of our quarterly financial statements.

Moreover, the audit committee is comprised of seasoned business
professionals, whereby two members each have over 25 years of experience in the
investment business, are board members of several corporations and one of the
members is an attorney whose practice focuses on the corporate finance area,
with an emphasis on securities and acquisitions.

- 32 -

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On these bases, we believe that the audit committee has
adequate resources available to it when financial expertise and advice are
necessary.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to us,
other than Biotonus Clinique Bon Port (Hong Kong) Limited which provided no
reports to us, no officer, director or beneficial owner of more than ten percent
of our Common Stock failed to file on a timely basis reports required to be
filed by Section 16(a) of the Exchange Act during the most recent fiscal year.

Code of Ethics

The Board of Directors does not have any committees. Our Board
of Directors has not adopted a code of ethics that applies to our principal
executive officer or principal financial officer. We believe that due to the
small size of the Company and existing systems we have in place that there is no
real benefit to having a formal code of ethics.

Directors are subject to the laws of the State of Oregon,
whereby they are required to act honestly, in good faith and in the best
interests of the Company.

ITEM 10.       EXECUTIVE
COMPENSATION

Summary Compensation Table

The following table sets forth the aggregate cash compensation
paid for services rendered to the Company during the last three fiscal years by
the Company's Chief Executive Officer and the Company's most highly compensated
executive officers who served as such at the end of the last fiscal year. No
executive officer had an annual salary and bonus in excess of $100,000 during
such year.

Name and Principal Position
      Year
      Salary 
        ($)
      Bonus 
        ($)
      Stock 
        Awards ($)
      Option 
        Awards ($) (1)
    Non-Equity Incentive Plan
      Compensation ($)
    Nonqualified Deferred Compensation
      ($)
    All Other Compensation ($)
      Total ($)John G. Robertson President, Chief
      Executive Officer
      2008 
        2007 2006
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil 40,592 Nil
    Nil Nil Nil
    Nil Nil Nil
    Nil Nil Nil
      Nil Nil Nil


________________(1) This column represents the dollar
amount recognized for financial statement reporting purposes with respect to the
year ended April 30, 2008 for the fair value of stock options granted to each of
our named executive officers calculated in accordance with SFAS 123R. For
additional information on the valuation assumptions with respect to option
grants, refer to Note 8 of our financial statements and related notes. These
amounts reflect only our accounting expense for these option grants and do not
correspond to the actual value that will be recognized by our named executive
officers. See the Outstanding Equity Awards at April 30, 2008 table below for
more information on options held by the named executive officers.

A management fee of $2,500.00 per month is accrued for payment
to Access Information Services, Inc., a corporation controlled by the Robertson
Family Trust, the beneficiary of which is Kelly Wells, daughter of John G.
Robertson.

- 33 -

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The Company entered into an agreement with a professional law
firm (the Law Firm) in which a partner of the firm is an Officer and Director
of the Company. The Company agreed to pay a cash fee equal to 5% of any
financings with parties introduced to the Company by the Law Firm. The Company
also agreed to pay an equity fee equal to 5% of the equity issued by the Company
to parties introduced by the Law Firm, in the form of options, warrants or
common stock. The Company paid fees to a professional law firm in which a
partner of the firm is an officer and director of the Company, for legal
services amounting to $27,191 (2007 - $7,315).

The Company entered into an agreement dated April 6, 2005 with
a private company controlled by the President of the Company to acquire a
working interest in two oil wells located in Burleson County, Texas. The Company
agreed to issue up to 1,000,000 shares (issued - 279,477) of restricted common
stock at the rate of one share for every $0.10 of revenue from the wells. To
April 30, 2008, revenue from the wells was approximately $40,512, resulting in
an obligation to the Company to issue approximately 496,000 shares of restricted
common stock.

The Company has no other agreement at this time, with any
officer or director, regarding employment with the Company or compensation for
services other than herein described. Compensation of officers and directors is
determined by the Companys Board of Directors and not subject to shareholder
approval. The Company may in the future create retirement, pension, profit
sharing, insurance and medical reimbursement plans covering its Officers and
Directors. At the present time, no such plans exist. No advances have been made
or are contemplated by the Company to any of its Officers or Directors.

No other compensation is paid to any of our Executive Officers
or Directors. We may in the future create retirement, pension, profit sharing,
insurance and medical reimbursement plans covering our Officers and Directors.
At the present time, we have no such plans. No advances have been made or are
contemplated by us to any of our Officers or Directors.

Mr. Robertson was granted options to purchase 1,000,000 shares
of common stock at $0.20 per share. These options were previously due to expire
on November 20, 2006. On October 20, 2006, the Board of Directors extended the
expiry date to November 20, 2011.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth information about outstanding
equity awards held by our named executive officers as of April 30, 2008.

Option Awards (1)

Name
    Number of Securities Underlying
      Unexercised Options granted (#) Exercisable
    Number of Securities Underlying
      Unexercised Options granted (#) Unexercisable
    Equity Incentive Plan Awards:
      Number of Securities Underlying Unexercised Unearned
      Options (#)
    Option Exercise Price ($)
    Option Expiration dateJohn Robertson
    900,000
    Nil
    Nil
    $0.20
    November 20, 2011


- 34 -

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| | (1) | There were no Stock Awards awarded to the named executive
      officers. Accordingly, this disclosure has been
omitted.
| | --- | ------------------------------------------------------------------------------------------------------------------------

Compensation of Directors

During the most recently completed financial year, the Company
paid no cash compensation (including salaries, fees, directors fees,
commissions, bonuses paid for services rendered during the most recently
completed fiscal year, bonuses paid during the most recently completed fiscal
year for services rendered in a previous year, and any compensation other than
bonuses earned during the most recently completed fiscal year the payment of
which was deferred) to the Directors for services rendered.

Executive Officers of the Company, who also act as Directors of
the Company, do not receive any additional compensation for services rendered in
such capacity other than as paid by the Company to such Executive Officers in
their capacity as Executive Officers (see Compensation of Executive Officers).

ITEM 11.       SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth, as of August 11, 2008 our
outstanding Class A Common Stock owned of record or beneficially by each person
who owned of record, or was known by us to own beneficially, more than 5% of our
Common Stock, and the name and shareholdings of each Executive Officer and
Director and all Executive Officers and Directors as a group. A person is deemed
to be the beneficial owner of securities that can be acquired by such person
within 60 days from the date of this report upon the exercise of warrants or
options. Each beneficial owner's percentage ownership is determined by assuming
that options that are held by such person and which are exercisable within 60
days from the date are exercised.

|Name                                                                                                                 |  | Class A Common |  | Percentage of Class | 
|-------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | ------------------- | 
|                                                                                                                     |  | Shares Owned   |  | A Shares Owned      | 
|John G. Robertson, President and member of
      the Board of Directors [1][2]                                       |  | 21,459,518     |  | 30.69%              | 
|Access Information Services, Inc. [3]                                                                                |  | 12,467,508     |  | 17.83%              | 
|Robertson Family Trust [4]                                                                                           |  | 20,425,218     |  | 29.12%              | 
|JGR Petroleum Inc. [5]                                                                                               |  | 7,957,710      |  | 11.38%              | 
|SMR Investments [6]                                                                                                  |  | 4,417,252      |  | 6.32%               | 
|Jennifer Lorette Secretary/Treasurer [1]
      [7]                                                                   |  | 146,000        |  | *                   | 
|James L. Vandeberg [1][8], Chief Operating Officer, Chief Financial Officer and Member
    of the Board of Directors |  | 108,000        |  | *                   | 
|Shareholders of Power Telecom Limited
      [9][10]                                                                  |  | 20,000,000     |  | 28.61%              | 
|All Directors and Executive Officers as a Group [1][2][6][7][8]                                                      |  | 25,030,770     |  | 35.80%              | 

* Less than one percent of the issued and outstanding shares as
at April 30, 2008 (58,418,039) and as at the date of this Form 10-KSB
(69,913,817).

- 35 -

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Except as noted below, all shares are held beneficially and of
record and each record shareholder has sole voting and investment power.

[1] These individuals are our Executive Officers and Directors
and may be deemed to be our "parents or founders" as that term is defined in the
Rules and Regulations promulgated under the Securities Act of 1933, as amended.

[2] Includes 12,467,508 shares registered in the name of Access
Information Services, Ltd., a corporation controlled by the Robertson Family
Trust, 7,957,710 shares registered in the name of JGR Petroleum Inc. , a
corporation controlled by the Robertson Family Trust and 900,000 options, of
which 250,000are currently exercisable. Mr. Robertson is one of three trustees
of the Robertson Family Trust, which acts by the majority vote of the three
trustees. Mr. Robertson disclaims beneficial ownership of the shares owned or
controlled by the Robertson Family Trust. Mr. Robertson's address is the same as
our address.

[3] Access Information Services is a corporation owned by the
Robertson Family Trust. Its address is 240 - 11780 Hammersmith Way, Richmond,
British Columbia V7A 5E9, Canada.

[4] Includes 12,467,508 shares owned of record by Access
Information Services, a corporation owned by the trust and 7,957,710 shares
registered in the name of JGR Petroleum Inc. , a corporation controlled by the
Robertson Family Trust. The address of the Robertson Family Trust is 240 - 11780
Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada.

[5] JGR Petroleum Inc. is a corporation owned by The Robertson
Family Trust. Its address is 240 - 11780 Hammersmith Way, Richmond, British
Columbia V7A 5E9, Canada

[6] SMR Investments is a corporation owned by Sue Robertson,
the wife of Mr. Robertson. Its address is 240 - 11780 Hammersmith Way, Richmond,
British Columbia V7A 5E9, Canada. Includes 25,000 warrants that are currently
exercisable.

[7] Jennifer Lorette, a director, owns 71,000 common shares and
includes 75,000 options of which 25,000 are currently exercisable.

[8] Includes 8,000 shares of common stock and 100,000 options
of which 25,000 are currently exercisable. Mr. Vandeberg's address is 22344 NE
31st Street, Sammamish, WA 98074.

[9] Of these, 10,000 shares of IAS common stock were issued to
Samuel Kam, our Vice President Internet Development, and one of the two
shareholders of Power Telecom Limited. Mr. Kam is not an executive officer.
Pursuant to Option Agreement dated November 26, 2007 between the Company and the
shareholders of Biotonus Clinique Bon Port (Hong Kong) Limited, of which Samuel
Kam is a director, and Power Telecom Limited, Messrs. Samuel Kam and Biotonus
Clinique Bon Port (Hong Kong) Limited covenant to vote their shares of the
Company in favour of the composition of the Board of Directors of IAS as Mr.
Robertson shall so direct in writing. Mr. Robertson disclaims beneficial
ownership of these shares.

[10] Of these, 19,990,000 shares of IAS common stock were
issued to Biotonus Clinique Bon Port (Hong Kong) Limited, one of the two
shareholders of Power Telecom Limited. The beneficial owner of Biotonus Clinique
Bon Port (Hong Kong) Limited is Samuel Kam who is also a director.

CHANGES IN CONTROL

Other than as follows, we know of no arrangements the operation
of which may result in a change of our control.

Pursuant to the Option Agreement dated November 26, 2007
between the Company and the shareholders of Biotonus Clinique Bon Port (Hong
Kong) Limited and Power Telecom Limited, from the date of the Option Agreement
until the earlier of the date that IAS has fully exercised the options under the
Option Agreement and December 31, 2013, Messrs. Samuel Kam and Biotonus Clinique
Bon Port (Hong Kong) Limited covenant to vote their shares of the Company in
favour of the composition of the Board of Directors of IAS as Mr. Robertson
shall so direct in writing. Mr. Robertson disclaims beneficial ownership of
these shares (refer to our 8-K dated and filed with the SEC November 28, 2007).

- 36 -

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ITEM 12.       CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Integral Concepts, Inc. ("ICI"), holder of the exclusive
worldwide license to the CTHA technology, entered into an option agreement with
SMR Investments Ltd. ("SMR"), a corporation owned by Sue Robertson, the wife of
Mr. Robertson, dated November 18, 1994, and amended December 16, 1994 (the
"Option Agreement"). The Option Agreement provided that ICI would issue a
sublicense to SMR for the CTHA subject to the payment of $250,000; a 3% royalty
from gross sales; and a subsequent public entity to be established. We were
organized by SMR and Robertson as a result. ICI retained all military
applications and resulting procurement interests. The contract period relating
to the three percent royalty to be paid to ICI commences when sales are made by
us and SMR and continue during the life of the Option Agreement. The term of the
Option Agreement is perpetual as is the ICI License.

On December 13, 1994, SMR assigned us the rights to the Option
Agreement in consideration of $50,000 advanced by Access Information Services,
Inc. (the "Option Assignment"). Access Information Services, Inc. is a
corporation owned and controlled by the Robertson Family Trust.

On December 14, 1994, we issued 3,000,000 Class A Shares to
Access Information Services, Inc., pursuant to the Option Assignment. The value
assigned to the 3,000,000 Class A common shares issued to Access Information
Services Inc. was $0.50. The valuation of the 3,000,000 shares issued to Access
Information Services, Inc. was arbitrarily determined by our Board of Directors.
The $250,000 has been paid to ICI and was a one time payment.

On July 10, 1995, ICI entered into the Sublicense wherein ICI
granted to us the exclusive worldwide right to manufacture, sell copies of,
sublicense and distribute the process and equipment related to the design,
construction and operation of the CTHA and to further sublicense others the
rights to manufacture, sell copies of, license and distribute the same,
excluding all military applications and procurement interests. The Sublicense
was the culmination of the agreement between ICI and SMR, and SMR and us. On
December 27, 1995, SMR assigned us all of its rights and duties in the CTHA
technology. The purpose of this assignment was to assign any and all rights or
duties which may have been held by SMR as a result of the Option Agreement, it
being understood that the Option Agreement was nothing more than an agreement in
principle. The term of the Sublicense is perpetual and requires the payment of a
minimum annual royalty of $3,000. Further, we will pay a royalty of 10% of the
net revenues derived from sales, licenses or sublicenses of the CTHA technology
with a credit for the minimum royalty. In addition we shall pay a royalty of 3%
of the gross revenues derived from the sales, licenses or sublicenses of the
CTHA technology.

We amended the Sublicense with ICI in March 1997 to clarify the
applications of CTHA technology subject to our sublicense. As amended, we have
exclusive rights to all commercial applications. Emergent Technologies
Corporation ("ETC") has the exclusive rights to all governmental and military
applications for the CTHA antenna. In consideration for the amendment, we
received a 50% reduction in royalties to be paid to ICI over a three year period
plus an enlarged definition of Technology to include all future enhancements to
the CTHA technology.

Effective March 17, 2005, we entered into a settlement and
release agreement with Integral Concepts Inc. (ICI) to terminate the exclusive
worldwide sublicense granted to the Company by ICI.

- 37 -

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The Company entered into an agreement dated April 6, 2005, with
a private company controlled by the President of the Company to acquire a
working interest in two oil wells located in Burleson County, Texas. The wells
are producing but a value cannot be placed on them due to vertical fracture
features that prevent the estimation of reserves. The Company agreed to issue up
to 1,000,000 shares (issued  279,477) of restricted common stock at the rate of
one share for every $0.10 of revenue from the wells. Refer to Note 10 (a) to our
financial statements.

To date, there have not been any transactions between us and
our officers, directors, principal shareholders or affiliates other than as set
forth above. We believe that the transactions described here were on terms more
favorable to our officers, and directors, than otherwise could be obtained if
such transactions were with non-related parties.

Director Independence

Our common stock is traded on the over-the-counter bulletin
board. Therefore, we are not required to have independent members of the board
of directors.

ITEM 13.      EXHIBITS.

Number
    Description3.1
    Articles of Incorporation
    (1)3.2
    Article of Amendment
    (1)3.3
    By-Laws
    (1)3.4
    Articles of Amendment May 2007
    (7)4.1
    Specimen Share Certificate for Class A Shares
    (1)4.2
    Specimen Share Certificate for Class B Shares
    (1)4.3
    Specimen Warrant
    (2)4.4
    Specimen Debenture
    (2)10.1
    Marketing Agreement between IAS and Information Highway.com,
      Inc.
    (3)10.2
    Professional Service Agreement between IAS and
      Cadence Design Systems, Inc.
    (3)10.3
    Consulting Agreement between IAS and Capital Research Group
      Inc.
    (3)10.4
    License Agreement between IAS and World Tracking Technologies,
      Inc.
    (3)10.5
    Amendment to License Agreement between IAS and
      World Tracking Technologies, Inc.
    (3)10.6
    License Agreement between IAS and ARINC Incorporated
    (3)10.7
    Renewal Lease Agreement for Kokomo, Indiana Facilities
    (3)10.8
    Amendment No.2 to License Agreement between IAS
      and Wherify Wireless, Inc. (formerly World Tracking Technologies, Inc.)
    (4)10.9
    JGR
      Petroleum, Inc. Interest in Oil and Gas Wells
    (5)10.10
    West Virginia University Research Corporation
      Non-Exclusive License Agreement
    (5)


- 38 -

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10.11
      West Virginia University Research Corporation
        Settlement and Release Agreement
      (5)10.12
      Integral Concepts Inc. Settlement And Release Agreement
      (5)10.13
      Joint Venture Agreement between IAS and Energy
        Source, Inc. May 4, 2006
      (6)10.14
      Option Agreement dated
        November 26, 2007 between IAS Energy, Inc. and the shareholders of Biotonus
        Clinique Bon Port (Hong Kong) Limited and Power Telecom Limited
      (8)10.15
      Agreement dated April
        7, 2008 between IAS Energy, Inc. and Teryl Resources Corp.
      (9)23.1
      Consent of Smythe Ratcliffe LLP
      (10)23.2
      Consent of Manning Elliott LLP
      (10)31.1
      Certification of Chief
        Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
        2002
      (10)31.2
      Certification of Chief
        Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
        2002
      (10)32.1
      Certification of John
        Robertson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350,
        as adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002
      (10)32.2
      Certificate of James
        Vandeberg, Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
        as adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002
      (10)


|(1)  | Incorporated by reference from Form S-1 Registration
      Statement (33-92592).
|---- | --------------------------------------------------------------------------------
|(2)  | Incorporated by reference from Form 10-KSB for Fiscal
      Year 1998.          
|(3)  | Incorporated by reference from Form 10-KSB for Fiscal
      Year 2000.          
|(4)  | Incorporated by reference from Form 10-KSB for Fiscal
      Year 2001.          
|(5)  | Incorporated by reference from Form 10-KSB for Fiscal
      Year 2006           
|(6)  | Incorporated by reference from Form 10-KSB for Fiscal
      Year 2007           
|(7)  | Incorporated by reference to our Form 8-K filed June 13, 2007                   
|(8)  | Incorporated by reference to our Form 8-K filed November 29, 2007               
|(9)  | Incorporated by reference to our Form 8-K filed April 10, 2008                  
|(10) | Attached hereto.                                                                

|Reports of Independent
      Registered Public Accounting Firms
|---------------------------------------------------------------
|                                                               
|Balance Sheets                                                 
|                                                               
|Statements of
      Operations                                 
|                                                               
|Statements of
      Stockholders' Equity (Deficit)             
|                                                               
|Statements of Cash
      Flows                                 
|                                                               
|Notes to Financial
      Statements                            

ITEM 14.       PRINCIPAL
ACCOUNTANT FEES AND SERVICES.

The following table discloses accounting fees and services
which we paid to our auditors, Smythe Ratcliffe LLP, in fiscal 2008 and 2007:

- 39 -

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|                          | 2008        | 2007       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year

(a) Audit Fees
    $25,000
    $29,468(b) Audit-Related
      Fees
    $0
    $0(c) Tax Fees
    $0
    $0(d) All Other Fees
    $0
    $0


Our Audit Committee consists of the entire Board of Directors
of the Company and is comprised of seasoned business professionals, whereby two
members each have over 25 years of experience in the investment business, are
board members of several corporations and one of the members is an attorney
whose practice focuses on the corporate finance area, with an emphasis on
securities and acquisitions. On this basis, we believe that the audit committee
has adequate resources available to it when financial expertise and advice are
necessary.

Despite being comprised of our entire Board of Directors, our
Audit Committee assists the Board in fulfilling its responsibilities relating to
the Companys corporate accounting and reporting practices. The Audit Committee
is responsible for ensuring that management has established appropriate
processes for monitoring the Companys systems and procedures for financial
reporting and controls, reviewing all financial information in disclosure
documents; monitoring the performance and fees and expenses of the Companys
external auditors and recommending external auditors for appointment by
shareholders. The Audit Committee is also responsible for reviewing the
Companys annual financial statements prior to approval by the Board and release
to the public. Currently the members are John Robertson, James Vandeberg and
Jennifer Lorette. Upon recommendation of our Audit Committee, our board of
directors appointed Smythe Ratcliffe LLP, Chartered Accountants as our principal
accountant to audit our financial statements for the fiscal year ended April 30,
2008.

In the table above, and the disclosure below, audit fees are
fees billed by the Companys external auditor for services provided in auditing
the Companys annual financial statements for the subject year. Audit-related
fees are fees not included in audit fees that are billed by the auditor for
assurance and related services that are reasonably related to the performance of
the audit or review of the Companys financial statements. Tax fees are fees
billed by the auditor for professional services rendered for tax compliance, tax
advice and tax planning. All other fees are fees billed by the auditor for
products and services not included in the foregoing categories.

Audit FeesThe aggregate fees billed by Smythe
Ratcliffe LLP, Chartered Accountants for professional services rendered for the
audit of our annual financial statements and review of financial statements
included in our Form 10-QSBs or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for the fiscal years ended April 30 2008 and 2007 were $25,000 and $29,468,
respectively.

- 40 -

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Audit Related FeesThe aggregate fees billed for
assurance and related services by Smythe Ratcliffe LLP, Chartered Accountants,
as applicable, relating to the performance of the audit of our financial
statements for the fiscal years ended April 30 2008 and 2007, which are not
reported under the heading "Audit Fees" above, were $Nil and $Nil,
respectively.

Tax FeesFor the fiscal years ended April 30 2008 and
2007, the aggregate fees billed for tax compliance, tax advice and tax planning
by Smythe Ratcliffe LLP, Chartered Accountants, as applicable, were $Nil and
$Nil, respectively.

All Other FeesFor the fiscal years ended April 30
2008 and 2007, the aggregate fees billed by Smythe Ratcliffe LLP, Chartered
Accountants, as applicable, for products and services other than the services
set out above, were $Nil and $Nil, respectively.

- 41 -

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report or amendment to
be signed on its behalf by the undersigned, thereunto duly authorized.

IAS ENERGY, INC.

By: /s/ John G. Robertson John G. Robertson,
President Chief Executive Officer and Director

Dated: August 27, 2008

In accordance with the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated below:

|Signature             | Title                                | Date   
|--------------------- | ------------------------------------ | -------
|                      |                                      |        
|/s/ John G. Robertson | Chairman of the Board, President,    | 8/27/08
|(John G. Robertson)   | Chief Executive Officer and Director |        
|                      |                                      |        
|                      |                                      |        
|/s/James Vandeberg    | Chief Operating Officer and          | 8/27/08
|(James Vandeberg)     | Chief Financial Officer and Director |        
|                      |                                      |        
|                      |                                      |        
|/s/ Jennifer Lorette  | Vice President, Secretary            | 8/27/08
|(Jennifer Lorette)    | and Director                         |        

- 42 -

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IAS Energy, Inc. 
  (A Development Stage Company) 
  (Expressed in U.S. Dollars) 
  April 30, 2008 and 2007







|                                                                | Index            
|--------------------------------------------------------------- | -----------------
|                                                                |                  
|Reports
      of Independent Registered Public Accounting Firms | F-1
      to F-2 
|                                                                |                  
|Balance
      Sheets                                            | F3              
|                                                                |                  
|Statements
      of Operations                                  | F4              
|                                                                |                  
|Statements
      of Cash Flows                                  | F5              
|                                                                |                  
|Statements
      of Stockholders Equity (Deficit)              | F6
      to F8 
|                                                                |                  
|Notes
      to the Financial Statements                         | F9
      to F22

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS AND STOCKHOLDERS OF IAS ENERGY, INC. 
  (A
  Development Stage Company)

We have audited the accompanying balance sheets of IAS Energy,
  Inc. (A Development Stage Company) as at April 30, 2008 and 2007 and the
  statements of operations, stockholders equity (deficit) and cash flows for the
  years then ended and the cumulative totals for the development stage of
  operations from December 13, 1994 (date of inception) through April 30, 2008.
  These financial statements are the responsibility of the Company's management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits. The statements of operations, stockholders equity (deficit) and
  cash flows from December 13, 1994 (date of inception) to April 30, 2005 were
  audited by other auditors whose report dated July 28, 2005 expressed an
  unqualified opinion, with an explanatory paragraph discussing the Companys
  ability to continue as a going-concern. Our opinion on the statements of
  operations, stockholders equity (deficit) and cash flows from inception to
  April 30, 2008, insofar as it relates to amounts for prior periods through April
  30, 2005, is solely based on the reports of other auditors.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable
  assurance whether the financial statements are free of material misstatement. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as well
  as evaluating the overall financial statement presentation. We believe that our
  audits provide a reasonable basis for our opinion.

In our opinion, based on our audits, the financial statements
  referred to above present fairly, in all material respects, the financial
  position of the Company as at April 30, 2008 and 2007 and the results of its
  operations and its cash flows for the years then ended and the cumulative totals
  for the development stage of operations from December 13, 1994 (date of
  inception) through April 30, 2008 in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements have been prepared
  assuming that the Company will continue as a going-concern. As discussed in Note
  1 to the financial statements, the Company has sustained accumulated losses of
  $7,188,362 since its inception and has a deficit in working capital, which
  raises substantial doubt about its ability to continue as a going-concern. The
  financial statements do not include any adjustments related to the
  recoverability and classification of asset carrying amounts or the amounts and
  classification of liabilities that might result should the Company be unable to
  continue as a going-concern. Managements plans in regard to these matters are
  also described in Note 1.

Smythe Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, British Columbia 
  August 11, 2008 except as to
  Note 15(c), 
         which is as of August 18,
  2008.

F-1

footer

---

header

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of 
  IAS
  Communications, Inc. (A Development Stage Company)

We have audited the statements of operations, cash flows and
  stockholders equity (deficit) of IAS Communications, Inc. (A Development Stage
  Company) accumulated from December 13, 1994 (Date of Inception) to April 30,
  2005. These financial statements are the responsibility of the Companys
  management. Our responsibility is to express an opinion on these financial
  statements based on our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures in
  the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management as well as
  evaluating the overall financial statement presentation. We believe that our
  audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the results of its operations and its
  cash flows accumulated from December 13, 1994 (Date of Inception) to April 30,
  2005, in conformity with accounting principles generally accepted in the United
  States.

The accompanying financial statements have been prepared
  assuming the Company will continue as a going concern. As discussed in Note 1 to
  the financial statements, the Company has not generated any revenues and has
  accumulated operating losses since inception. These factors raise substantial
  doubt about the Companys ability to continue as a going concern. Managements
  plans in regard to these matters are also discussed in Note 1. These financial
  statements do not include any adjustments that might result from the outcome of
  these uncertainties.

/s/ MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

July 28, 2005

F-2

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Balance
  Sheets 
  (Expressed in U.S. Dollars)

|                                                                                                       | April 30,  |   | April 30,  |  
|------------------------------------------------------------------------------------------------------ | ---------- | - | ---------- | -
|                                                                                                       | 2008       |   | 2007       |  
|                                                                                                       | $          |   | $          |  
|                                                                                                       |            |   |            |  
|Assets                                                                                                 |            |   |            |  
|Current Assets                                                                                         |            |   |            |  
|Cash                                                                                                   | 785        |   | 12,285     |  
|Available-for-sale securities (Note 6)                                                                 | 162,589    |   | 194,243    |  
|Accounts receivable                                                                                    |           |   | 3,468      |  
|Accrued revenues from petroleum interests                                                              | 3,052      |   | 5,394      |  
|Prepaid expenses                                                                                       | 69,209     |   | 2,000      |  
|Due
      from related parties (Note 4(a))                                                             | 21,139     |   | 32,357     |  
|Total Current Assets                                                                                   | 256,774    |   | 249,747    |  
|Investment (Note 11)                                                                                   | 4,444,010  |   |           |  
|Oil and Gas Properties (Note 10)                                                                       |           |   | 274,896    |  
|                                                                                                       |            |   |            |  
|Total Assets                                                                                           | 4,700,784  |   | 524,643    |  
|                                                                                                       |            |   |            |  
|                                                                                                       |            |   |            |  
|Liabilities and Stockholders Equity                                                                   |            |   |            |  
|                                                                                                       |            |   |            |  
|Current Liabilities                                                                                    |            |   |            |  
|Bank indebtedness                                                                                      | 6,004      |   |           |  
|Accounts payable                                                                                       | 67,654     |   | 3,613      |  
|Accrued liabilities                                                                                    | 6,126      |   | 6,183      |  
|Due to related parties (Note 4(b))                                                                     | 830,021    |   | 458,497    |  
|Debentures (Note 5)                                                                                    | 25,000     |   | 25,000     |  
|Total Liabilities                                                                                      | 934,805    |   | 493,293    |  
|Commitments (Note 12)                                                                                  |            |   |            |  
|                                                                                                       |            |   |            |  
|Stockholders Equity                                                                                   |            |   |            |  
|Preferred
      Stock                            
          50,000 share authorized; none issued      |           |   |           |  
|Common Stock and Paid-in
      Capital in Excess of Par                                                |            |   |            |  
|Class A
      voting                             
          100,000,000 shares authorized without par |            |   |            |  
|value 58,408,039 (2007 - 36,023,039) shares                                                            |            |   |            |  
|issued and outstanding                                                                                 | 10,770,353 |   | 6,133,550  |  
|Class B
      non-voting                      
      100,000,000 shares authorized without par      |            |   |            |  
|value; none issued                                                                                     |           |   |           |  
|                                                                                                       |            |   |            |  
|Obligation to Issue Shares (Notes 10(a) and 15(a))                                                     | 147,338    |   | 62,446     |  
|Accumulated Other Comprehensive Income                                                                 | 36,650     |   | 78,365     |  
|Deficit
      Accumulated During the Development Stage                                                 | (7,188,362 | ) | (6,243,011 | )
|Total Stockholders Equity                                                                             | 3,765,979  |   | 31,350     |  
|Total Liabilities
      and Stockholders Equity                                                       | 4,700,784  |   | 524,643    |  

F-3

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Statements of Operations 
  (Expressed in U.S. Dollars)

|                                                                    | Cumulative from        |   |            |   |            |  
|------------------------------------------------------------------- | ---------------------- | - | ---------- | - | ---------- | -
|                                                                    | December 13, 1994      |   |            |   |            |  
|                                                                    | (Date of Inception) to |   | Year Ended |   | Year Ended |  
|                                                                    | April 30,              |   | April 30,  |   | April 30,  |  
|                                                                    | 2008                   |   | 2008       |   | 2007       |  
|                                                                    | $                      |   | $          |   | $          |  
|                                                                    |                        |   |            |   |            |  
|Revenue                                                             |                        |   |            |   |            |  
|Petroleum and natural gas sales                                     | 72,209                 |   | 20,201     |   | 24,060     |  
|                                                                    |                        |   |            |   |            |  
|Total Revenue                                                       | 72,209                 |   | 20,201     |   | 24,060     |  
|                                                                    |                        |   |            |   |            |  
|Operating Expenses                                                  |                        |   |            |   |            |  
|Depletion and
      depreciation                                    | 5,897                  |   | 1,470      |   | 2,604      |  
|Interest on convertible
      debentures                            | 13,128                 |   | 2,188      |   | 2,188      |  
|License                                                             | 14,500                 |   | 3,000      |   | 3,000      |  
|Office                                                              | 351,037                |   | 292,408    |   | 37,880     |  
|Professional
      fees                                             | 512,764                |   | 322,578    |   | 50,685     |  
|Transfer agent and regulatory                                       | 24,768                 |   | 8,797      |   | 1,727      |  
|                                                                    |                        |   |            |   |            |  
|Total Operating Expenses                                            | 922,094                |   | 630,441    |   | 98,084     |  
|                                                                    |                        |   |            |   |            |  
|Loss from Operations                                                | (849,885               | ) | (610,240   | ) | (74,024    | )
|                                                                    |                        |   |            |   |            |  
|Other Income (Expenses)                                             |                        |   |            |   |            |  
|Gain on sale of
      available-for-sale securities (Note 6)        | 104,670                |   | 1,920      |   | 102,750    |  
|Gain on license obligation                                          | 1,000                  |   |           |   |           |  
|Gain on
      write-off of payables                                 | 63,487                 |   |           |   | 9,101      |  
|Gain on settlement of obligation
      to issue shares (Note 12(c)) | 53,750                 |   | 53,750     |   |           |  
|Loss from equity
      accounted investment (Note (11))             | (36,463                | ) | (36,463    | ) |           |  
|Impairment loss  oil and gas
      properties(Notes 10(a) and      |                        |   |            |   |            |  
|(b))                                                                | (470,189               | ) | (354,318   | ) | (62,446    | )
|                                                                    |                        |   |            |   |            |  
|Loss Before Discontinued
      Operations                           | (1,133,630             | ) | (945,351   | ) | (24,619    | )
|                                                                    |                        |   |            |   |            |  
|Discontinued Operations                                             | (6,054,732             | ) |           |   |           |  
|                                                                    |                        |   |            |   |            |  
|Net Loss                                                            | (7,188,362             | ) | (945,351   | ) | (24,619    | )
|                                                                    |                        |   |            |   |            |  
|Other Comprehensive Income
      (Loss)                             |                        |   |            |   |            |  
|Unrealized gain (loss) on
      available-for-sale securities       | 158,970                |   | (39,395    | ) | (18,332    | )
|Reclassification adjustment for gains included
      in net loss    | (122,320               | ) | (2,320     | ) | (120,000   | )
|Net
      unrealized gain (loss) on available-for-sale securities   | 36,650                 |   | (41,715    | ) | (138,332   | )
|                                                                    |                        |   |            |   |            |  
|Comprehensive Loss                                                  | (7,151,712             | ) | (987,066   | ) | (162,951   | )
|                                                                    |                        |   |            |   |            |  
|Loss
      Per Share  Basic and Diluted                            |                        |   | (0.02      | ) | (0.00      | )
|                                                                    |                        |   |            |   |            |  
|Weighted Average Number of Class A Common
      Shares              |                        |   |            |   |            |  
|Outstanding                                                         |                        |   | 42,578,181 |   | 35,739,621 |  

F-4

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Statements of Cash Flows 
  (Expressed in U.S. Dollars)

|                                                                | Cumulative from        |   |            |   |            |  
|--------------------------------------------------------------- | ---------------------- | - | ---------- | - | ---------- | -
|                                                                | December 13, 1994      |   |            |   |            |  
|                                                                | (Date of Inception) to |   | Year Ended |   | Year Ended |  
|                                                                | April 30,              |   | April 30,  |   | April 30,  |  
|                                                                | 2008                   |   | 2008       |   | 2007       |  
|                                                                | $                      |   | $          |   | $          |  
|Operating Activities                                            |                        |   |            |   |            |  
|Net loss                                                        | (7,188,362             | ) | (945,351   | ) | (24,619    | )
|                                                                |                        |   |            |   |            |  
|Adjustments to reconcile net loss to net cash
      used in     |                        |   |            |   |            |  
|operating activities:                                           |                        |   |            |   |            |  
|Assets written-off                                              | 455,957                |   |           |   |           |  
|Depreciation                                                    | 189,109                |   |           |   |           |  
|Gain on shares
      cancelled                                  | (10                    | ) |           |   |           |  
|Gain on sale of available-for-sale securities                   | (104,670               | ) | (1,920     | ) | (102,750   | )
|Gain on write-off
      of payables                             | (549,562               | ) |           |   | (9,101     | )
|Shares issued for services                                      | 630,125                |   | 74,075     |   |           |  
|Shares issued for
      convertible debenture interest          | 18,786                 |   |           |   |           |  
|Gain on settlement of obligation to issue shares                | (53,750                | ) | (53,750    | ) |           |  
|Additional paid-in
      capital on settlement of obligation to |                        |   |            |   |            |  
|issue shares                                                    | 107,500                |   | 107,500    |   |           |  
|Warrants issued
      for services                              | 18,681                 |   | 18,681     |   |           |  
|Stock-based compensation                                        | 139,381                |   | 90,671     |   | 48,710     |  
|Depletion                                                       | 4,074                  |   | 1,470      |   | 2,604      |  
|Loss from equity accounted investment                           | 36,463                 |   | 36,463     |   |           |  
|Impairment loss 
      oil and gas properties                  | 470,189                |   | 354,318    |   | 62,446     |  
|                                                                |                        |   |            |   |            |  
|Change in non-cash working capital:                             |                        |   |            |   |            |  
|Prepaid expenses and deposits                                   | (3,553                 | ) | (1,553     | ) | 10,000     |  
|Accounts
      receivable                                       |                       |   | 3,468      |   | (3,468     | )
|Inventory                                                       | (28,615                | ) |           |   |           |  
|Accrued revenues
      from oil and gas properties              | (3,052                 | ) | 2,342      |   | (3,998     | )
|Accounts payable and accrued liabilities                        | 779,044                |   | 63,984     |   | (67,069    | )
|Due to related parties                                          | 98,060                 |   | 115,538    |   | 4,845      |  
|                                                                |                        |   |            |   |            |  
|Net
      Cash Used in Operating Activities                     | (4,984,205             | ) | (134,064   | ) | (82,400    | )
|                                                                |                        |   |            |   |            |  
|Investing Activities                                            |                        |   |            |   |            |  
|Investment                                                      | (200,000               | ) | (200,000   | ) |           |  
|Purchase of
      property and equipment                        | (99,626                | ) |           |   |           |  
|Purchase of license                                             | (250,000               | ) |           |   |           |  
|Increase in patent
      protection costs                       | (266,822               | ) |           |   |           |  
|Investment in oil and gas properties                            | (555,000               | ) |           |   | (555,000   | )
|Recoveries to oil
      and gas properties                      | 277,500                |   |           |   | 277,500    |  
|Proceeds from sale of available-for-sale securities             | 104,990                |   | 2,240      |   | 102,750    |  
|Purchase of securities                                          | (115,878               | ) |           |   | (115,878   | )
|                                                                |                        |   |            |   |            |  
|Net
      Cash Used in Investing Activities                     | (1,104,836             | ) | (197,760   | ) | (290,628   | )
|                                                                |                        |   |            |   |            |  
|Financing Activities                                            |                        |   |            |   |            |  
|Advances from related parties                                   | 1,369,495              |   | 244,917    |   | 185,000    |  
|Bank indebtedness                                               | 6,004                  |   | 6,004      |   |           |  
|Proceeds from issuance of common stock                          | 4,310,327              |   | 65,403     |   | 200,000    |  
|Proceeds from
      convertible debentures                      | 400,000                |   |           |   |           |  
|Proceeds from common stock
      subscribed                     | 4,000                  |   | 4,000      |   |           |  
|                                                                |                        |   |            |   |            |  
|Net Cash Provided by Financing Activities                       | 6,089,826              |   | 320,324    |   | 385,000    |  
|                                                                |                        |   |            |   |            |  
|Net Increase (Decrease) in
      Cash                           | 785                    |   | (11,500    | ) | 11,972     |  
|Cash
       Beginning of Period                                |                       |   | 12,285     |   | 313        |  
|Cash  End of Period                                            | 785                    |   | 785        |   | 12,285     |  
|                                                                |                        |   |            |   |            |  
|See note 14 for supplemental
      cash flow disclosures.       |                        |   |            |   |            |  

F-5

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Statements of Stockholders Equity (Deficit) 
  From December 13, 1994
  (Date of Inception) to April 30, 2008 
  (Expressed in U.S. Dollars)

|                                                      |                                  |   |            |   |             |  | Deficit       |   |            |  
|----------------------------------------------------- | -------------------------------- | - | ---------- | - | ----------- |  | ------------- | - | ---------- | -
|                                                      |                                  |   |            |   |             |  | Accumulated   |   | Total      |  
|                                                      | Common Stock Class A and         |   | Obligation |   | During the  |  | Stockholders |  
|                                                      | Additional
      Paid-In Capital |   | to Issue   |   | Development |  | Equity        |  
|                                                      | Shares                           |   | Amount     |   | Shares      |  | Stage         |   | (Deficit)  |  
|                                                      | #                                |   | $          |   | $           |  | $             |   | $          |  
|Balance  December 13, 1994 (Date of
      inception) |                                 |   |           |   |            |  |              |   |           |  
|Shares issued for cash                                | 100                              |   | 10         |   |            |  |              |   | 10         |  
|Shares issued for technology                          | 6,000,000                        |   | 1          |   |            |  |              |   | 1          |  
|Stock issued for cash pursuant to:                    |                                  |   |            |   |             |  |               |   |            |  
|A private placement                                   | 700,000                          |   | 70,000     |   |            |  |              |   | 70,000     |  
|A public offering memorandum                          | 336,333                          |   | 252,250    |   |            |  |              |   | 252,250    |  
|Net loss for the period                               |                                 |   |           |   |            |  | (83,615       | ) | (83,615    | )
|Balance  April 30, 1995                              | 7,036,433                        |   | 322,261    |   |            |  | (83,615       | ) | 238,646    |  
|Shares previously issued, donated back and            |                                  |   |            |   |             |  |               |   |            |  
|cancelled                                             | (100                             | ) | (10        | ) |            |  |              |   | (10        | )
|Shares issued for cash pursuant to options            |                                  |   |            |   |             |  |               |   |            |  
|exercised                                             | 210,000                          |   | 52,500     |   |            |  |              |   | 52,500     |  
|Net loss for the year                                 |                                 |   |           |   |            |  | (480,298      | ) | (480,298   | )
|Balance  April 30, 1996                              | 7,246,333                        |   | 374,751    |   |            |  | (563,913      | ) | (189,162   | )
|Shares issued for cash pursuant to:                   |                                  |   |            |   |             |  |               |   |            |  
|A private placement                                   | 722,000                          |   | 1,124,500  |   |            |  |              |   | 1,124,500  |  
|Options exercised                                     | 224,000                          |   | 140,500    |   |            |  |              |   | 140,500    |  
|Shares issued for services                            | 25,000                           |   | 8,333      |   |            |  |              |   | 8,333      |  
|Net loss for the year                                 |                                 |   |           |   |            |  | (1,044,516    | ) | (1,044,516 | )
|Balance  April 30, 1997                              | 8,217,333                        |   | 1,648,084  |   |            |  | (1,608,429    | ) | 39,655     |  
|Shares issued for cash pursuant to:                   |                                  |   |            |   |             |  |               |   |            |  
|A public offering memorandum                          | 263,667                          |   | 197,750    |   |            |  |              |   | 197,750    |  
|Options exercised                                     | 87,500                           |   | 26,875     |   |            |  |              |   | 26,875     |  
|A private placement                                   | 7,000                            |   | 15,750     |   |            |  |              |   | 15,750     |  
|A private placement and
      foreign units offering  | 575,600                          |   | 1,007,300  |   |            |  |              |   | 1,007,300  |  
|Shares issued for services                            | 169,250                          |   | 260,125    |   |            |  |              |   | 260,125    |  
|Net loss for the year                                 |                                 |   |           |   |            |  | (1,633,047    | ) | (1,633,047 | )
|Balance  April 30, 1998                              | 9,320,350                        |   | 3,155,884  |   |            |  | (3,241,476    | ) | (85,592    | )
|Shares issued for cash pursuant to:                   |                                  |   |            |   |             |  |               |   |            |  
|Options exercised                                     | 2,000                            |   | 500        |   |            |  |              |   | 500        |  
|A private placement and
      foreign units offering  | 95,000                           |   | 166,250    |   |            |  |              |   | 166,250    |  
|A private placement                                   | 200,000                          |   | 200,000    |   |            |  |              |   | 200,000    |  
|Exercise of warrants                                  | 48,000                           |   | 84,000     |   |            |  |              |   | 84,000     |  
|Shares issued for services                            | 132,000                          |   | 230,640    |   |            |  |              |   | 230,640    |  
|Shares issued pursuant to conversion of               |                                  |   |            |   |             |  |               |   |            |  
|convertible debentures including accrued interest     | 471,508                          |   | 345,520    |   |            |  |              |   | 345,520    |  
|Net loss for the year                                 |                                 |   |           |   |            |  | (1,219,435    | ) | (1,219,435 | )
|Balance  April 30, 1999                              | 10,268,858                       |   | 4,182,794  |   |            |  | (4,460,911    | ) | (278,117   | )
|Shares issued for cash pursuant to:                   |                                  |   |            |   |             |  |               |   |            |  
|A private placement                                   | 968,902                          |   | 484,451    |   |            |  |              |   | 484,451    |  
|Options exercised                                     | 2,500                            |   | 2,500      |   |            |  |              |   | 2,500      |  
|Warrants exercised                                    | 18,125                           |   | 30,938     |   |            |  |              |   | 30,938     |  
|Shares issued pursuant to conversion of               |                                  |   |            |   |             |  |               |   |            |  
|convertible debentures including accrued interest     | 62,854                           |   | 38,266     |   |            |  |              |   | 38,266     |  
|Net loss for the year                                 |                                 |   |           |   |            |  | (572,169      | ) | (572,169   | )
|Balance  April 30, 2000                              | 11,321,239                       |   | 4,738,949  |   |            |  | (5,033,080    | ) | (294,131   | )

F-6

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Statements of Stockholders Equity (Deficit) (Continued) 
  From December
  13, 1994 (Date of Inception) to April 30, 2008 
  (Expressed in U.S. Dollars)

|                                           |                            |  |            |  |             |   | Deficit     |   |               |   |            |  
|------------------------------------------ | -------------------------- |  | ---------- |  | ----------- | - | ----------- | - | ------------- | - | ---------- | -
|                                           | Common Stock Class A and   |  |            |  | Accumulated |   | Accumulated |   | Total         |  
|                                           | Additional Paid-In Capital |  | Obligation |  | During the  |   | Other       |   | Stockholders |  
|                                           |                            |  |            |  | to Issue    |   | Development |   | Comprehensive |   | Equity     |  
|                                           | Shares                     |  | Amount     |  | Shares      |   | Stage       |   | Income        |   | (Deficit)  |  
|                                           | #                          |  | $          |  | $           |   | $           |   | $             |   | $          |  
|Balance  April 30, 2000                   | 11,321,239                 |  | 4,738,949  |  |            |   | (5,033,080  | ) |              |   | (294,131   | )
|Shares issued to settle debt               | 267,048                    |  | 211,781    |  |            |   |            |   |              |   | 211,781    |  
|Shares issued pursuant to conversion of    |                            |  |            |  |             |   |             |   |               |   |            |  
|convertible debentures and interest        | 12,358                     |  | 10,875     |  |            |   |            |   |              |   | 10,875     |  
|Net loss for the year                      |                           |  |           |  |            |   | (755,406    | ) |              |   | (755,406   | )
|Balance  April 30, 2001                   | 11,600,645                 |  | 4,961,605  |  |            |   | (5,788,486  | ) |              |   | (826,881   | )
|Net loss for the year                      |                           |  |           |  |            |   | (752,321    | ) |              |   | (752,321   | )
|Balance  April 30, 2002                   | 11,600,645                 |  | 4,961,605  |  |            |   | (6,540,807  | ) |              |   | (1,579,202 | )
|Shares issued for cash pursuant to a       |                            |  |            |  |             |   |             |   |               |   |            |  
|private placement                          | 944,250                    |  | 188,850    |  |            |   |            |   |              |   | 188,850    |  
|Shares issued to settle related party debt | 22,698,667                 |  | 680,960    |  |            |   |            |   |              |   | 680,960    |  
|Net income for the year                    |                           |  |           |  |            |   | 304,576     |   |              |   | 304,576    |  
|Unrealized gain on available-for-sale      |                            |  |            |  |             |   |             |   |               |   |            |  
|securities                                 |                           |  |           |  |            |   |            |   | 4,800         |   | 4,800      |  
|Balance  April 30, 2003                   | 35,243,562                 |  | 5,831,415  |  |            |   | (6,236,231  | ) | 4,800         |   | (400,016   | )
|Net income for the year                    |                           |  |           |  |            |   | 119,993     |   |              |   | 119,993    |  
|Unrealized gain on available-for-sale      |                            |  |            |  |             |   |             |   |               |   |            |  
|securities                                 |                           |  |           |  |            |   |            |   | 27,019        |   | 27,019     |  
|Balance  April 30, 2004                   | 35,243,562                 |  | 5,831,415  |  |            |   | (6,116,238  | ) | 31,819        |   | (253,004   | )
|Net loss for the year                      |                           |  |           |  |            |   | (42,726     | ) |              |   | (42,726    | )
|Unrealized gain on available-for-sale      |                            |  |            |  |             |   |             |   |               |   |            |  
|securities                                 |                           |  |           |  |            |   |            |   | 44,178        |   | 44,178     |  
|Balance  April 30, 2005                   | 35,243,562                 |  | 5,831,415  |  |            |   | (6,158,964  | ) | 75,997        |   | (251,552   | )
|Obligation to issue shares                 |                           |  |           |  | 53,425      |   |            |   |              |   | 53,425     |  
|Net loss for the year                      |                           |  |           |  |            |   | (59,428     | ) |              |   | (59,428    | )
|Unrealized gain on available-for-sale      |                            |  |            |  |             |   |             |   |               |   |            |  
|securities                                 |                           |  |           |  |            |   |            |   | 140,700       |   | 140,700    |  
|Balance  April 30, 2006                   | 35,243,562                 |  | 5,831,415  |  | 53,425      |   | (6,218,392  | ) | 216,697       |   | (116,855   | )
|Shares issued pursuant to oil revenue      |                            |  |            |  |             |   |             |   |               |   |            |  
|agreement                                  | 279,477                    |  | 53,425     |  | (53,425     | ) |            |   |              |   |           |  
|Shares issued for cash pursuant to a       |                            |  |            |  |             |   |             |   |               |   |            |  
|private placement                          | 500,000                    |  | 200,000    |  |            |   |            |   |              |   | 200,000    |  
|Obligation to issue shares                 |                           |  |           |  | 62,446      |   |            |   |              |   | 62,446     |  
|Stock-based compensation                   |                           |  | 48,710     |  |            |   |            |   |              |   | 48,710     |  
|Net loss for the year                      |                           |  |           |  |            |   | (24,619     | ) |              |   | (24,619    | )
|Unrealized gain on available-for-sale      |                            |  |            |  |             |   |             |   |               |   |            |  
|securities                                 |                           |  |           |  |            |   |            |   | (18,332       | ) | (18,332    | )
|Reclassification adjustment on sale of     |                            |  |            |  |             |   |             |   |               |   |            |  
|available-for-sale securities              |                           |  |           |  |            |   |            |   | (120,000      | ) | (120,000   | )
|Balance  April
      30, 2007             | 36,023,039                 |  | 6,133,550  |  | 62,446      |   | (6,243,011  | ) | 78,365        |   | 31,350     |  

F-7

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Statements of Stockholders Equity (Deficit) (Continued) 
  From December
  13, 1994 (Date of Inception) to April 30, 2008 
  (Expressed in U.S. Dollars)

|                                         |                            |  |            |  |             |  | Deficit     |   |               |   |           |  
|---------------------------------------- | -------------------------- |  | ---------- |  | ----------- |  | ----------- | - | ------------- | - | --------- | -
|                                         | Common Stock Class A and   |  |            |  | Accumulated |  | Accumulated |   | Total         |  
|                                         | Additional Paid-In Capital |  | Obligation |  | During the  |  | Other       |   | Stockholders |  
|                                         |                            |  |            |  | to Issue    |  | Development |   | Comprehensive |   | Equity    |  
|                                         | Shares                     |  | Amount     |  | Shares      |  | Stage       |   | Income        |   | (Deficit) |  
|                                         | #                          |  | $          |  | $           |  | $           |   | $             |   | $         |  
|                                         |                            |  |            |  |             |  |             |   |               |   |           |  
|Balance  April 30, 2007                 | 36,023,039                 |  | 6,133,550  |  | 62,446      |  | (6,243,011  | ) | 78,365        |   | 31,350    |  
|Shares issued for cash pursuant to:      |                            |  |            |  |             |  |             |   |               |   |           |  
|A private placement                      | 58,000                     |  | 21,903     |  |            |  |            |   |              |   | 21,903    |  
|Options exercised                        | 137,500                    |  | 27,500     |  |            |  |            |   |              |   | 27,500    |  
|Warrants exercised                       | 40,000                     |  | 16,000     |  |            |  |            |   |              |   | 16,000    |  
|Shares issued for services               | 149,500                    |  | 74,075     |  |            |  |            |   |              |   | 74,075    |  
|Settlement of obligation to issue shares |                           |  | 107,500    |  |            |  |            |   |              |   | 107,500   |  
|Shares issued pursuant to exercise of    |                            |  |            |  |             |  |             |   |               |   |           |  
|option to purchase investment in a       |                            |  |            |  |             |  |             |   |               |   |           |  
|company                                  | 22,000,000                 |  | 4,280,473  |  |            |  |            |   |              |   | 4,280,473 |  
|Fair value of warrants issued for        |                            |  |            |  |             |  |             |   |               |   |           |  
|services                                 |                           |  | 18,681     |  |            |  |            |   |              |   | 18,681    |  
|Common stock subscribed                  |                           |  |           |  | 4,000       |  |            |   |              |   | 4,000     |  
|Obligation to issue shares               |                           |  |           |  | 80,892      |  |            |   |              |   | 80,892    |  
|Stock-based compensation                 |                           |  | 90,671     |  |            |  |            |   |              |   | 90,671    |  
|Net loss for the year                    |                           |  |           |  |            |  | (945,351    | ) |              |   | (945,351  | )
|Unrealized gain on available-for-sale    |                            |  |            |  |             |  |             |   |               |   |           |  
|securities                               |                           |  |           |  |            |  |            |   | (39,395       | ) | (39,395   | )
|                                         |                            |  |            |  |             |  |             |   |               |   |           |  
|Reclassification adjustment on sale of   |                            |  |            |  |             |  |             |   |               |   |           |  
|available-for-sale securities            |                           |  |           |  |            |  |            |   | (2,320        | ) | (2,320    | )
|Balance  April
      30, 2008           | 58,408,039                 |  | 10,770,353 |  | 147,338     |  | (7,188,362  | ) | 36,650        |   | 3,765,979 |  

F-8

The Accompanying Notes are an Integral Part of these Financial
  Statements

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|1. | CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | IAS Energy, Inc. (the Company) was incorporated on
      December 13, 1994 pursuant to the laws of the State of Oregon, USA. The
      Company is a development stage company, as defined by Statement of
      Financial Accounting Standard (SFAS) No. 7, Accounting and Reporting
        by Development Stage Enterprises. On May 24, 2007, the Company
      changed its name from IAS Communications, Inc. to IAS Energy, Inc. The
      Company had been previously pursuing the development of oil and gas
      properties and, effective February 1, 2008 the Company changed its
      principal operations to acquiring and developing a video-sharing website,
      as described in Note 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In a development stage company, management devotes most
      of its activities to establishing a new business, including raising
      capital to acquire interest in the website. Planned principal activities
      have not yet produced any revenues and the Company has suffered operating
      losses as is normal in development stage companies. At April 30, 2008, the
      Company had a working capital deficiency of $678,031 (2007 - $243,546),
      which raises substantial concern of its ability to meet planned business
      objectives and ongoing operations for the next twelve months. The Company
      has accumulated losses of $7,188,362 since its inception. Its ability to
      continue as a going concern is dependent upon the ability of the Company
      to obtain the necessary financing to meet its obligations and pay its
      liabilities arising from normal business operations when they come due.
      These factors raise substantial doubt regarding the Companys ability to
      continue as a going concern. The ability of the Company to emerge from the
      development stage with respect to its planned principal business activity
      is dependent upon its successful efforts to raise additional equity
      financing, and receive funding from affiliates and controlling
      shareholders. Refer to Note 11.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-9

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (g)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | (h)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (i)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | (j)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-10

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (k)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | (l)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (m)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-11

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (n)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-12

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (n)                                                  
|   |                                                      
|   |                                                      

|3. | ASSET RETIREMENT OBLIGATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The total future asset retirement obligation (ARO) was
      estimated by management based on the Companys net ownership interest in
      all wells and facilities, estimated costs to reclaim and abandon the wells
      and facilities, and the estimated timing of the costs to be incurred in
      future periods. Although the Companys wells are producing, the Company
      has estimated the total ARO to be $nil as at April 30, 2008 (2007 - $nil)
      because the costs to be incurred in shutting down the wells are estimated
      to be minimal.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5. | DEBENTURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On June 15, 1997, the Company offered three-year, 83⁄4%
      interest debentures. As at April 30, 2008, $25,000 of debentures remain
      outstanding. Interest is due annually.                                                                                                                                                                                                                                                                                                                                                                                         

F-13

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|6. | AVAILABLE-FOR-SALE
      SECURITIES
|-- | -----------------------------------

Year Ended
      
      
      Year EndedApril 30, 2008
      
      
      April 30, 2007Gross
      
      
      
      
      
      
      
      
      GrossUnrealized
      
      
      
      
      
      
      
      
      UnrealizedCost
      
      
      Gains
      
      
      Fair Value
      
      
      Cost
      
      
      Gains
      
      
      Fair Value$
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Equity security
      
      125,939
      
      
      36,650
      
      
      162,589
      
      
      115,878
      
      
      78,365
      
      
      194,243Total available-for-sale securities
      
      125,939
      
      
      36,650
      
      
      162,589
      
      
      115,878
      
      
      78,365
      
      
      194,243


|   | During the year, the Company sold available-for-sale
      securities for net proceeds of $2,240 (2007 - $102,750) and a realized
      gain of $1,920 (2007 - $102,750). The cost of the available-for-sale
      securities was based on original cost when first purchased.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                               
|7. | COMMON STOCK                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                               
|   | (a)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (b)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (c)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (d)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (e)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (f)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (g)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (h)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (i)                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                               
|   | (j)                                                                                                                                                                                                                                                                           

F-14

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|8. | STOCK OPTION PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company has a Stock Option Plan to issue up to
      2,500,000 Class A common shares to certain key directors and employees,
      approved and registered October 2, 1996, as amended. Pursuant to the Plan,
      the Company has granted stock options to certain directors and
      employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On October 22, 2007, the Company approved the 2007 Stock
      Option Plan to issue up to 2,000,000 Class A common shares to directors
      and employees and registered them on Form S-8 with the Securities and
      Exchange Commission (SEC).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      extended the term on 1,200,000 options held by directors for a further
      five years. The fair value of the options was estimated at the date of
      extension using the Black-Scholes option pricing model using the following
      weighted average assumptions: risk-free interest rate of 4.59%, expected
      volatility of 229%, an expected option life of 5 years and no expected
      dividends. The weighted average fair value of options granted was $0.25
      per option.                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The fair value of the original options was deducted from
      the fair value of the modified options for a difference of $194,840.
      During the year ended April 30, 2008, $4,059 (2007 - $48,710) stock-based
      compensation expense was charged to operations for the vested incremental
      increase in the fair value of these stock options. The balance of $142,071
      (2007 - $146,130) of unrecognized compensation cost related to the
      non-vested stock options held by the employees will be recognized over
      future periods.                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These options vest as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [i]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [ii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [iii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [iv]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [v]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2008, the Company granted
      1,000,000 options in accordance with the terms of the option agreement as
      described in Note 11. The fair value of the options was estimated at the
      date of grant using the Black-Scholes option pricing model using the
      following weighted average assumptions: risk-free interest rate of 3.73%,
      expected volatility of 163%, an expected option life of 2.5 years and no
      expected dividends. The weighted average fair value of options granted was
      $0.27 per option. During the year ended April 30, 2008, $66,988 stock-
      based compensation expense was charged to operations, and the balance of
      $200,966 of unrecognized compensation cost related to the non-vested stock
      options will be recognized over future periods as they vest.                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These options have the following vesting
      schedule:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [i]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [ii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | [iii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2008, the Company granted
      100,000 options pursuant to the 2007 Stock Option Plan. The fair value of
      the options was estimated at the date of grant using the Black-Scholes
      option pricing model using the following weighted average assumptions:
      risk-free interest rate of 3.49%, expected volatility of 166%, an expected
      option life of 2.5 years and no expected dividends. The options have an
      exercise price of $0.96 for a period of five years expiring November 7,
      2012. The weighted average fair value of options granted was $0.78 per
      option. During the year ended April 30, 2008, $19,624 stock-based
      compensation expense was charged to operations, and the balance of $58,871
      of unrecognized compensation cost related to the non-vested stock options
      will be recognized over future periods as they
      vest.

F-15

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|8. | STOCK OPTION PLAN(Continued)                                      
|-- | ------------------------------------------------------------------
|   |                                                                   
|   | These options have the following vesting
      schedule:          
|   |                                                                   
|   | [i]                                                               
|   |                                                                   
|   | [ii]                                                              
|   |                                                                   
|   | [iii]                                                             
|   |                                                                   
|   | [iv]                                                              
|   |                                                                   
|   | [v]                                                               
|   |                                                                   
|   | The following table summarizes stock option plan
      activities:

| |                                    |  | Year Ended     |   |  | Year Ended       |  
| | ---------------------------------- |  | -------------- | - |  | ---------------- | -
| |                                    |  | April 30, 2008 |   |  | April 30, 2007   |  
| |                                    |  |                |   |  | Weighted         |  
| |                                    |  |                |   |  | Average Exercise |  
| |                                    |  | Options        |   |  | Price            |  
| |                                    |  | #              |   |  | $                |  
| |                                    |  |                |   |  |                  |  
| | Outstanding at beginning of period |  | 1,250,000      |   |  | 0.20             |  
| | Granted                            |  | 1,100,000      |   |  | 0.39             |  
| | Exercised                          |  | (137,500       | ) |  | (0.20            | )
| | Cancelled/Modified                 |  |               |   |  |                 |  
| |                                    |  |                |   |  |                  |  
| | Outstanding at end
      of period |  | 2,212,500      |   |  | 0.29             |  
| |                                    |  |                |   |  |                  |  
| | Exercisable at end
      of period |  | 512,500        |   |  | 0.30             |  

Additional information regarding
  options outstanding and exercisable as at April 30, 2008 is as follows:

| |                     |  | Options Outstanding | 
| | ------------------- |  | ------------------- | 
| |                     |  |                     | 
| |                     |  |                     | 
| |                     |  | Exercise            | 
| | Expiry Date         |  | Price               | 
| |                     |  | $                   | 
| |                     |  |                     | 
| | October 8, 2008     |  | 0.20                | 
| | November 20, 2011   |  | 0.20                | 
| | October 23, 2012    |  | 0.33                | 
| | November 7, 2012    |  | 0.96                | 
| |                     |  |                     | 
| | Options outstanding |  |                     | 

| |                     |  | Options Exercisable | 
| | ------------------- |  | ------------------- | 
| |                     |  |                     | 
| |                     |  |                     | 
| |                     |  | Exercise            | 
| | Expiry Date         |  | Price               | 
| |                     |  | $                   | 
| |                     |  |                     | 
| | October 8, 2008     |  | 0.20                | 
| | November 20, 2011   |  | 0.20                | 
| | October 23, 2012    |  | 0.33                | 
| | November 7, 2012    |  | 0.96                | 
| |                     |  |                     | 
| | Options exercisable |  |                     | 

As at April 30, 2008, there was
  $401,908 of total unrecognized compensation costs related to non-vested stock
  options granted under the Plans, which are expected to be recognized over a
  weighted-average period of 48 months. The total fair value of stock options
  vested during the years ended April 30, 2008 and 2007 was $90,671 and $48,710,
  respectively.

The aggregate intrinsic value of all
  options exercised was $6,875 (2007 - $nil).

F-16

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|8. | STOCK OPTION PLAN(Continued)                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                        
|   | A summary of the status of the Companys non-vested stock
      options as of April 30, 2008 and changes during the year ended April 30,
      2008 is presented below:

| |                              |  |               |   |  | Weighted Average | 
| | ---------------------------- |  | ------------- | - |  | ---------------- | 
| |                              |  |               |   |  | Grant Date       | 
| |                              |  | Stock Options |   |  | Fair Value       | 
| |                              |  | #             |   |  | $                | 
| |                              |  |               |   |  |                  | 
| | Non-vested at May 1, 2007    |  | 900,000       |   |  | 0.25             | 
| | Vested                       |  | (25,000       | ) |  | 0.25             | 
| | Granted                      |  | 825,000       |   |  | 0.33             | 
| |                              |  |               |   |  |                  | 
| | Non-vested at April 30, 2008 |  | 1,700,000     |   |  | 0.29             | 

|9. | SHARE PURCHASE WARRANTS                                                       
|-- | ------------------------------------------------------------------------------
|   |                                                                               
|   | The following table summarizes the continuity of the
      Companys warrants:

| |                                  |  |          |   |  | Weighted Average | 
| | -------------------------------- |  | -------- | - |  | ---------------- | 
| |                                  |  | Warrants |   |  | Exercise Price   | 
| |                                  |  | #        |   |  | $                | 
| |                                  |  |          |   |  |                  | 
| | Balance, April 30, 2007 and 2006 |  | 250,000  |   |  | 0.40             | 
| | Issued                           |  | 158,000  |   |  | 0.44             | 
| | Exercised                        |  | (40,000  | ) |  | 0.40             | 
| | Balance, April 30,
      2008    |  | 368,000  |   |  | 0.42             | 

|    | On September 28, 2007, the Company extended the expiry
      date of 250,000 warrants from September 29, 2007 to September 29,
      2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                           
|10. | OIL AND GAS PROPERTIES                                                                                                                    

| |                                            |  | April 30,    |   |  |              |   |  |           |   |  | April 30,    |  
| | ------------------------------------------ |  | ------------ | - |  | ------------ | - |  | --------- | - |  | ------------ | -
| |                                            |  | 2007         |   |  |              |   |  |           |   |  | 2008         |  
| |                                            |  | Net Carrying |   |  | Acquisition/ |   |  |           |   |  | Net Carrying |  
| |                                            |  | Value        |   |  | Impairment   |   |  | Depletion |   |  | Value        |  
| |                                            |  | $            |   |  | $            |   |  | $         |   |  | $            |  
| |                                            |  |              |   |  |              |   |  |           |   |  |              |  
| | Proved Properties, Kentucky and Texas, USA |  |              |   |  |              |   |  |           |   |  |              |  
| | Acquisition costs                          |  | 393,371      |   |  | 80,892       |   |  |          |   |  | 474,263      |  
| | Depletion                                  |  | (2,604       | ) |  |             |   |  | (1,470    | ) |  | (4,074       | )
| | Impairment                                 |  | (115,871     | ) |  | (354,318     | ) |  |          |   |  | (470,189     | )
| |                                            |  |              |   |  |              |   |  |           |   |  |              |  
| | Net Carrying Value                         |  | 274,896      |   |  | (273,426     | ) |  | (1,470    | ) |  |             |  

| | (a) | The Company entered into an agreement dated April 6, 2005
      with a private company controlled by the President of the Company to
      acquire a working interest in two oil wells located in Burleson County,
      Texas. The Company agreed to issue up to 1,000,000 shares (issued -
      279,477) of restricted common stock at the rate of one share for every
      $0.10 of revenue from the wells. To April 30, 2008, revenue from the wells
      was approximately $40,512. During the year ended April 30, 2008, the
      Company received/accrued $2,996 of revenue from the wells. The
      approximately 496,000 shares of restricted common stock issuable at April
      30, 2008 pursuant to this agreement have been recorded at the quoted
      market price prevailing at the time of receipt of the oil and gas revenues
      and are accrued in the amount of $143,338 in obligation to issue
      shares.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | The wells are producing but a value cannot be placed on
      them due to vertical fracture features that prevent the estimation of
      reserves. Accordingly, cumulative impairment loss of $196,763 equal to the
      investment in the oil wells that would have otherwise been recorded has
      been charged to operations. During the year ended April 30, 2008, $80,892
      (2007 - $62,446) of impairment loss was
      recognized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-17

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|10. | OIL AND GAS PROPERTIES(Continued)
|--- | ---------------------------------
|    |                                  
|    | (b)                              
|    |                                  
|    |                                  
|    |                                  
|    |                                  

|11. | INVESTMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On November 26, 2007, the Company entered into an Option
      Agreement (the Agreement) with the two sole shareholders of Power
      Telecom, a company incorporated in Hong Kong, for the option to acquire
      100% of the outstanding shares of Power Telecom in consideration for the
      issuance of 50,000,000 Class A shares of common stock of the Company and
      the requirement to invest $650,000 towards the further development of
      Power Telecoms business. Power Telecom owns 100% of the rights to the
      Chinese website http://www.video1314.com, which is similar to the YouTube
      website. The Company paid a non-refundable deposit of $50,000 to Power
      Telecom upon execution of the Agreement, which funds have been used for
      the further development of Power Telecoms business.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Pursuant to the Agreement, the Company received a series
      of irrevocable exclusive options to purchase up to 100% of the shares of
      Power Telecom in stages as described below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | [i]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | [ii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | [iii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | [iv]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | [v]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Upon execution of the Agreement, the
  Company granted 1,000,000 stock options to purchase 1,000,000 Class A common
  shares of the Company at a price of $0.33 per share for a period of five years.
  The options vest as to 12.5% upon grant date and an additional 12.5% every 90
  days thereafter.

The investment is accounted for using
  the equity method as follows:

| |                                         |  | April 30, |   |  | April 30, | 
| | --------------------------------------- |  | --------- | - |  | --------- | 
| |                                         |  | 2008      |   |  | 2007      | 
| |                                         |  | $         |   |  | $         | 
| |                                         |  |           |   |  |           | 
| |                                         |  |           |   |  |           | 
| | Cost of investment                      |  | 4,480,473 |   |  |          | 
| | Share of losses
      since acquisition |  | (36,463   | ) |  |          | 
| | Carrying value                          |  | 4,444,010 |   |  |          | 

F-18

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|11. | INVESTMENT(Continued)                                                  
|--- | -----------------------------------------------------------------------
|    |                                                                        
|    | Summarized financial information for Power Telecom is as
      follows:

| |                                                         |  | April 30, |   |  | April 30, |  
| | ------------------------------------------------------- |  | --------- | - |  | --------- | -
| |                                                         |  | 2008      |   |  | 2007      |  
| |                                                         |  | $         |   |  | $         |  
| | Assets                                                  |  |           |   |  |           |  
| | Current Assets                                          |  | 57        |   |  | 57        |  
| |                                                         |  |           |   |  |           |  
| | Total Assets                                            |  | 57        |   |  | 57        |  
| |                                                         |  |           |   |  |           |  
| | Current Liabilities                                     |  | 328,680   |   |  | 212,515   |  
| | Common Stock and Paid-in Capital in Excess
      of Par |  | 201,431   |   |  | 1,283     |  
| | Comprehensive Income                                    |  | (74       | ) |  |          |  
| | Deficit                                                 |  | (529,980  | ) |  | (213,741  | )
| | Total Liabilities
      and Stockholders Equity        |  | 57        |   |  | 57        |  

| |                    |  | Year Ended |   |  | Year Ended |  
| | ------------------ |  | ---------- | - |  | ---------- | -
| |                    |  | April 30,  |   |  | April 30,  |  
| |                    |  | 2008       |   |  | 2007       |  
| |                    |  | $          |   |  | $          |  
| | Revenue            |  | 6,098      |   |  |           |  
| | Operating Expenses |  | 322,337    |   |  | 1,198      |  
| | Net Loss           |  | (316,239   | ) |  | (1,198     | )
| | Share of net loss  |  | (36,463    | ) |  |           |  

The shares issued for the above
  investment have the following restrictions:

| | (a) | Holding period of six months;                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                     
| | (b) | After the six-month holding period, the number of shares
      to be sold during any 90-day period cannot exceed 1% of the outstanding
      shares of the same class;              
| |     |                                                                                                                                                                                     
| | (c) | The sales must be handled as routine transactions with no
      solicitation; and                                                                                                   
| |     |                                                                                                                                                                                     
| | (d) | A notice has to be filed with the SEC on Form 144 if the
      sale involves more than 500 shares or the aggregate dollar amount is
      greater than $10,000 in any 90-day period.

The first tranche of 11,000,000 shares
  issued on November 26, 2007, used the five-day average trading price of $0.23,
  before the announcement was made October 23, 2007, in the calculation of the
  fair value.

The second tranche of 11,000,000 shares
  issued on March 5, 2008, used the five-day average trading price of $0.28 in the
  calculation of the fair value.

Since these shares have trading
  restrictions, the aggregate fair value was calculated using the above prices,
  over the estimated time (based on trading restrictions) to achieve free trading
  status, using a 10% discount factor.

F-19

---

IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|12. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|13. | INCOME TAX                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has non-capital losses of $6,725,000, which commence expiring in
      2010. Pursuant to SFAS No. 109, the Company is required to compute tax
      asset benefits for net operating losses carried forward. Potential benefit
      of net operating losses have not been recognized in these financial
      statements because the Company cannot be assured it more likely than not
      will utilize the non-capital losses carried forward in future years. For
      the years ended April 30, 2008 and 2007, the valuation allowance
      established against the deferred tax assets increased by $182,000 and
      $8,000, respectively.

F-20

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IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|13. | INCOME TAX(Continued)                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                    
|    | The components of the net deferred tax asset at April 30,
      2008 and 2007 and the statutory tax rate, the effective tax rate and the
      elected amount of the valuation allowance are scheduled
      below:

| |                              |  | April 30,  |   |  | April 30,  |  
| | ---------------------------- |  | ---------- | - |  | ---------- | -
| |                              |  | 2008       |   |  | 2007       |  
| |                              |  | $          |   |  | $          |  
| | Non-capital losses           |  | 6,725,000  |   |  | 6,207,000  |  
| | Statutory tax rate           |  | 35%        |   |  | 35%        |  
| | Effective tax rate           |  |           |   |  |           |  
| | Deferred tax asset           |  | 2,354,000  |   |  | 2,172,000  |  
| | Valuation allowance          |  | (2,354,000 | ) |  | (2,172,000 | )
| | Net Deferred Tax
      Asset |  |           |   |  |           |  

Pursuant to SFAS No. 109, the Company
  is required to compute tax asset benefits for non-capital losses carried
  forward. Potential benefit of non-capital losses have not been recognized in
  these financial statements because the Company cannot be assured it is more
  likely than not it will utilize the losses carried forward in future years.

The reconciliation of income tax
  attributable to continuing operations computed at the statutory tax rates to
  income tax expense is:

| |                                                           |  | April 30, |   |  | April 30, |  
| | --------------------------------------------------------- |  | --------- | - |  | --------- | -
| |                                                           |  | 2008      |   |  | 2007      |  
| |                                                           |  | $         |   |  | $         |  
| |                                                           |  |           |   |  |           |  
| | Income tax benefit computed at U.S.
      statutory rates |  | 330,873   |   |  | 8,617     |  
| | Write-off of accounts payable                             |  |          |   |  | (3,185    | )
| | Depletion                                                 |  | (515      | ) |  |          |  
| | Impairment loss  oil and gas properties                  |  | (124,011  | ) |  | (21,856   | )
| | Equity adjustment                                         |  | (12,762   | ) |  |          |  
| | Stock-based adjustment                                    |  | (31,735   | ) |  | (17,049   | )
| | Gain on sale of available-for-sale
      securities       |  | 672       |   |  | 35,963    |  
| | Gain on issue of shares                                   |  | 18,813    |   |  |          |  
| | Unrecognized tax losses                                   |  | (181,335  | ) |  | (2,490    | )
| | Future income tax
      benefit                           |  |          |   |  |          |  

|14. | SUPPLEMENTAL CASH FLOW
      DISCLOSURES
|--- | ----------------------------------------

| |                                                            |  | Cumulative from        |   |  |            |  |  |            | 
| | ---------------------------------------------------------- |  | ---------------------- | - |  | ---------- |  |  | ---------- | 
| |                                                            |  | December 13, 1994      |   |  |            |  |  |            | 
| |                                                            |  | (Date of Inception) to |   |  | Year Ended |  |  | Year Ended | 
| |                                                            |  | April 30,              |   |  | April 30,  |  |  | April 30,  | 
| |                                                            |  | 2008                   |   |  | 2008       |  |  | 2007       | 
| |                                                            |  | $                      |   |  | $          |  |  | $          | 
| |                                                            |  |                        |   |  |            |  |  |            | 
| | Non-Cash Investing and
      Financing Activities          |  |                        |   |  |            |  |  |            | 
| | Issue of common stock to settle
      related party debt   |  | 892,741                |   |  |           |  |  |           | 
| | Issue of common
      stock for convertible dentures and   |  |                        |   |  |            |  |  |            | 
| | accrued interest converted                                 |  | 394,661                |   |  |           |  |  |           | 
| | Issue of common
      stock for technology                 |  | 1                      |   |  |           |  |  |           | 
| | Issue of common stock to an
      officer donated back and |  |                        |   |  |            |  |  |            | 
| | cancelled                                                  |  | (10                    | ) |  |           |  |  |           | 
| | Issue of common stock for
      services                   |  | 573,173                |   |  | 74,075     |  |  |           | 
| | Issue of common
      stock for revenue interest           |  | 53,425                 |   |  |           |  |  | 53,425     | 
| | Issue of common stock for investment                       |  | 4,280,473              |   |  | 4,280,473  |  |  |           | 
| | Supplemental Disclosures                                   |  |                        |   |  |            |  |  |            | 
| | Interest paid                                              |  | 6,564                  |   |  | 2,188      |  |  | 2,188      | 
| | Income tax paid                                            |  |                       |   |  |           |  |  |           | 

F-21

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IAS Energy, Inc. 
  (A Development Stage Company) 
  Notes to
  the Financial Statements 
  For the years ended April 30, 2008 and 2007 
  (Expressed in U.S. Dollars)

|15. | SUBSEQUENT EVENTS
|--- | -----------------
|    |                  
|    | (a)              
|    |                  
|    | (b)              
|    |                  
|    | (c)              

F-22

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