U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              --------------------

                                   FORM 10-QSB
                              --------------------


                                   (Mark One)
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2005

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                         OF THE SECURITIES EXCHANGE ACT

         For the transition period from _____________ to _______________

                              --------------------

                        Commission File Number: 000-29780
                              --------------------

                              SOLPOWER CORPORATION
             (Exact name of Registrant as specified in its charter)

         Nevada                                             87-0384678
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation  or organization)


                       11555 Heron Bay Boulevard Suite 200
                             Coral Springs, FL 33076
                    (Address of principal executive offices)

                                 (954) 603-0520
                           (Issuer's telephone number)

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 registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                  Yes      X                No
                      --------------           ---------------

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity was 70,559,727  shares of common stock,  par value $0.01,  as of December
31, 2005.

Transitional Small Business Disclosure Format (check one):

                  Yes                       No       X
                      --------------           ---------------



<PAGE>
                              SOLPOWER CORPORATION
                           INDEX TO FORM 10-QSB FILING
                     FOR THE QUARTER ENDED DECEMBER 31, 2005

                                TABLE OF CONTENTS

                                     PART I
                              FINANCIAL INFORMATION
                                                                            Page

Item 1.  Financial Statements...............................................   2
Balance Sheet
  December 31, 2005 (Unaudited).............................................   2
Consolidated Statements of Operations
  For the Three Months and Nine Months Ended December 31, 2005 (Unaudited)
  and 2004 (Unaudited)......................................................   3
Consolidated Statements of Comprehensive Income (Loss)
  For the Three Months and Nine Months Ended December 31, 2005 (Unaudited)
  and 2004 (Unaudited)......................................................   4
Consolidated Statement of Stockholders' Equity
  For the Nine Months Ended December 31, 2005 (Unaudited)...................   5
Consolidated Statements of Cash Flows
  For the Nine Months Ended December 31, 2005 (Unaudited)
  and 2004 (Unaudited)......................................................   6
Notes to the Consolidated Financial Statements (Unaudited)..................   9

  Item 2. Management's Discussion and Analysis and Plan of Operations ......  16

  Item 3. Controls and Procedures
     .......................................................................  22


                                     PART II
                                OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds..........................  22

Item 4.  Submission of Matters to a Vote of Security Holders ...............  22

Item 6. Exhibits............................................................  22

SIGNATURES .................................................................  23

CERTIFICATIONS .............................................................  24


                                       1
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
                              SOLPOWER CORPORATION
                                  BALANCE SHEET
                                DECEMBER 31, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                     ASSETS

Current Assets:
<S>                                                                         <C>
  Cash and cash equivalent                                              $        71,072
  Accounts receivable                                                            15,445
  Inventory                                                                     189,149
  Prepaid expenses                                                               20,203
                                                                        ---------------
                  Total Current Assets                                          295,869

Property and Equipment, net                                                       3,247

Intangible Asset- royalty agreement, net of
    amortization of $1,500                                                      118,500

Other Assets:
  Deposit                                                                           350
                                                                        ---------------
                                                                        $       417,966
                                                                        ===============



                     LIABILITIES AND STOCKHOLDERS' DEFICIT

 Current Liabilities:
   Customer advances                                                    $       255,555
   Accounts payable - trade                                                     162,179
                           - related party                                      287,738
         Accrued expenses                                                       120,088
                                                                        ---------------
                     Total Current Liabilities                                  825,560
                                                                        ---------------

    Commitments and Contingencies

   Stockholders' Deficit:
      Preferred stock; $0.001 par value, 5,000,000 shares
            authorized; issued and outstanding, none                                  -
      Common stock; $0.01 par value, 100,000,000 shares
            authorized; issued and outstanding 70,559,727 shares                705,597
      Additional Paid in Capital                                             12,455,625
      Accumulated deficit                                                   (13,568,816)
                                                                        ---------------
                     Total Stockholders' Deficit                               (407,594)
                                                                        ---------------
                                                                        $       417,966
                                                                        ===============
</TABLE>



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


                                       2
<PAGE>
                              SOLPOWER CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                   Three Months Ended              Nine Months Ended
                                                                  December 31,                      December 31,
                                                                  2005         2004             2005          2004
<S>                                                           <C>             <C>             <C>             <C>
Revenues                                                  $     170,768    $   184,582    $    572,013    $    364,941

Cost of Revenues                                                 59,530         83,553         262,540         158,582
                                                          --------------   ------------   -------------   -------------

Gross Profit                                                    111,238        101,029         309,473         206,359

Expenses:
     General and administrative                                 172,493        131,274         443,788         429,762
                                                          --------------   ------------   -------------   -------------

Operating (Loss) from Continuing Operations                     (61,255)       (30,245)       (134,315)       (223,403)
                                                          --------------   ------------   -------------   -------------

Other Income (Expense):
     Interest income                                                329              -             929               -
     Royalty income                                               6,631              -           6,631               -
     Income associated with extended warrants                         -         15,670               -               -
     Costs associated with issuance of call options                   -              -               -         (63,000)
     Interest expense                                              (252)        (5,941)           (252)        (18,049)
                                                          --------------   ------------   -------------   -------------
           Total Other Income (Expense)                           6,708          9,729           7,308         (81,049)
                                                          --------------   ------------   -------------   -------------

 Loss Before Provision for Income Taxes
     and Discontinued Operations                                (54,547)       (20,516)       (127,007)       (304,452)

Provision for Income Taxes                                            -              -               -               -
                                                          --------------   ------------   -------------   -------------

Loss from Continuing Operations                                 (54,547)       (20,516)       (127,007)       (304,452)
                                                          --------------   ------------   -------------   -------------

Discontinued Operations:
        Operating (loss) from discontinued operations                 -         (9,464)        (48,282)        (49,455)
        Gain on disposition of discontinued operations                -              -          93,240               -
                                                          --------------   ------------   -------------   -------------
            Gain (Loss) from Discontinued Operations                  -         (9,464)         44,958         (49,455)
                                                          --------------   ------------   -------------   -------------

Net Loss                                                  $     (54,547)   $   (29,980)   $    (82,049)   $   (353,907)
                                                          ==============   ============   =============   =============
</TABLE>

<TABLE>
<CAPTION>

Basic and Diluted Loss Per Share:
      Loss from operations available to stockholders:
<S>                                                            <C>             <C>            <C>             <C>
            Continuing operations                             $0.00           $0.00          $0.00           $0.00
                                                              =====           =====          =====           =====
            Discontinued operations                           $0.00           $0.00          $0.00           $0.00
                                                              =====           =====          =====           =====
      Net Loss Per Share                                      $0.00           $0.00          $0.00           $0.00
                                                              =====           =====          =====           =====
Weighted Average Number
    of Common Shares Outstanding                           70,554,292      57,166,755      69,897,909      55,968,922
                                                           ==========      ==========      =============   =============
</TABLE>



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



                                       3
<PAGE>
                              SOLPOWER CORPORATION
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     For the Nine Months Ended
                                                                            December 31,
                                                                     2005                2004
                                                                 ---------------    ----------------

<S>                                                                <C>                <C>
Net (Loss)                                                       $     (82,049)     $    (353,907)

Other Comprehensive Income (Loss), Net of Tax:
   Foreign currency translation adjustment                                   -                  -
                                                                 ---------------    ----------------

Comprehensive Loss                                               $     (82,049)     $    (353,907)
                                                                 ===============    ================
</TABLE>




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


                                       4
<PAGE>
                              SOLPOWER CORPORATION
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                   FOR THE NINE MONTHS ENDED DECEMBER 31, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                          Additional                                     Cumulative
                                  Common      Stock         Paid In     Common Stock   Accumulated      Translation
                                  Shares      Amount        Capital      Subscribed      Deficit          Account          Total
                                  ------      ------        -------                      -------           -------         -----

<S>                                                     <C>          <C>         <C>           <C>            <C>              <C>
Balance, March 31, 2005           69,309,727   $693,097    $12,293,125   $         -    $(13,486,767)      $  2,423     $ (498,122)
Change in cumulative
translation account                        -          -              -             -               -         (2,423)        (2,433)


Issuance of common for
exercise of warrants                 750,000      7,500        142,500             -               -              -         150,000


Sale of common stock                 500,000      5,000         20,000             -               -              -          25,000


Loss for the nine months
ended December 31, 2005
  (Unaudited)                              -          -              -             -         (82,049)                       (82,049)

                                 ------------ ----------- ------------- ------------- ---------------- -------------- --------------

Balance, December 31, 2005
(Unaudited)                        70,559,727   $705,597   $12,455,625   $         -    $(13,568,816)  $          -      $ (407,594)
                                 ============ =========== ============= ============= ================ ============== ==============
</TABLE>



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


                                       5
<PAGE>
                              SOLPOWER CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE NINE MONTHS ENDED DECEMBER 31, 2005
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                   December 31,
                                                                              2005                2004
                                                                              ----                ----
Cash Flows From Operating Activities:
<S>                                                                        <C>                 <C>
     Net (loss)                                                        $    (82,049)       $    (353,907)
            Gain (loss) from discontinued operations                         44,958              (49,455)
                                                                       -------------       --------------
     Net loss attributable to continuing operations                        (127,007)            (304,452)

       Adjustments to reconcile net loss to net cash used by operating
       activities:
          Depreciation and amortization                                       2,347                  598
          Non-cash transactions                                                   -              300,858
           Gain on sale of assets                                           (93,240)                   -
          Changes in operating assets and liabilities:
             Accounts receivable                                             76,403               30,500
             Subscription receivable                                              -              (18,265)
             Inventory                                                      (91,889)             (69,183)
             Prepaid expenses                                                43,483              (77,187)
             Deposit                                                            400                 (400)
             Accounts payable - trade                                        18,206              (23,499)
                              - related parties                              60,182              (41,059)
             Accrued interest - related party                                     -               17,757
             Accrued expenses                                              (112,922)               3,399
                                                                       -------------       --------------
               Net Cash (Used) by Continuing Operating Activities          (224,037)            (180,933)

               Gain (loss) from discontinued operations                      44,958              (49,455)
                                                                       -------------       --------------
               Net Cash Used by Operating Activities                       (179,079)            (230,388)
                                                                       -------------       --------------

Cash Flows from Investing Activities:
        Net change in investment of discontinued operations                  48,282               49,455
        Capital transactions                                                 (3,829)                   -
                                                                       -------------       --------------
                   Net Cash Provided by Investing Activities                 44,453               49,455
                                                                       -------------       --------------

Cash Flows from Financing Activities:
     Proceeds from call options                                                   -               15,000
     Proceeds from exercise of warrants                                     150,000                    -
     Proceeds from sale of common stock                                      25,000              186,167
     Net advances from customer                                             (31,698)              13,453
                                                                       -------------       --------------
                   Net Cash Provided by Financing Activities                143,302              214,620
                                                                       -------------       --------------


Increase in Cash and Cash Equivalents                                         8,676               33,687

Cash and Cash Equivalents, Beginning of Period                               62,396                6,664
                                                                       -------------       --------------

Cash and Cash Equivalents, End of Period                               $     71,072        $      40,351
                                                                       =============       ==============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>
                                          SOLPOWER CORPORATION
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               FOR THE NINE MONTHS ENDED DECEMBER 31, 2005
                                               (UNAUDITED)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                  September 30,
                                                                            2005                2004
                                                                            ----                ----
Supplemental Information

Cash Paid For:
<S>                                                                         <C>                 <C>
     Interest                                                              $   -               $    -
                                                                           ========            ========
     Income Taxes                                                          $   -               $    -
                                                                           ========            ========

Non-Cash Investing and Financing:

   Intangible asset acquired as part of discontinued operation             $120,000            $    -
                                                                           ========            ========

   Issuance of common stock for services                                   $                   $
                                                                           ========            ========
                                                                           $   -                165,858
                                                                           ========            ========

   Issuance of common stock for debt                                       $   -               $ 68,000
                                                                           ========            ========

   Miscellaneous expense associated with extending warrants                $   -               $ 78,350
                                                                           ========            ========

   Stock-based compensation                                                $   -               $ 4,000
                                                                           ========            ========

   Cost associated with options issued                                     $                   $
                                                                           ========            ========
                                                                           $   -                63,000
                                                                           ========            ========
</TABLE>



The accompanying notes are an integral part of these financial statements.


                                       7
<PAGE>
                              SOLPOWER CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED DECEMBER 31, 2005 AND 2004
                                   (UNAUDITED)


NOTE 1 - ORGANIZATION, OPERATIONS, BASIS OF PRESENTATION AND MANAGEMENT PLANS

Organization

Solpower  Corporation (the "Company"),  formerly known as Virtual  Technologies,
Inc. and Dynafuel  Corporation,  was incorporated under the laws of the State of
Utah on June 7, 1982.

The Company was originally incorporated with an authorized capital of 30,000,000
shares of  common  stock  with a par value of one cent  ($0.01)  per  share.  On
December 12, 1995, the Company amended its articles of  incorporation,  changing
its name to  Virtual  Technologies,  Inc.  and  authorizing  preferred  stock of
5,000,000  shares at $.25 par value.  On July 22, 1996, the Company  changed its
legal  domicile  to the State of Nevada.  On  November  22,  1997,  the  Company
restated  the  articles  of   incorporation,   changing  its  name  to  Solpower
Corporation  and changing its preferred stock par value to one-tenth of one cent
($.001) per share.  On December 11, 2000, at the Annual  Shareholders'  Meeting,
shareholders approved an amendment to the Company's articles of incorporation to
increase the authorized shares of common stock to 100,000,000.

Nature of Operations

The principal  business  purpose of the Company is the sales and distribution of
Soltron(R),  a  fuel-enhancing  product and SP34ETM,  a replacement  refrigerant
(through  September  30,  2005),  and other  environmentally  friendly  products
throughout the world.

The Company has the  exclusive  worldwide  sales,  distribution,  marketing  and
manufacturing rights to the products, Soltron(R), A fuel-enhancing product.

Acquisitions

During  the  year  ended  March  31,  2003,  the  Company  acquired  100% of the
outstanding  stock of Virtual  Technologies  (Australia) Pty Ltd. The subsidiary
was acquired by the issuance of 6,000,000  shares of restricted  common stock by
the  Company.   This  acquisition   delivers  the  exclusive   worldwide  sales,
distribution,  marketing  and  manufacturing  rights to the  products,  SP34ETM,
SP22E-A,  SP22E-B and SP22E-C,  refrigerant gas products.  On September 30, 2005
the  Company  sold the  outstanding  stock of  Virtual  Technologies  Pty.  Ltd.
including  all assets and  liabilities  in  exchange  for a royalty of 4% on all
gross  sales for the next  twenty  years.  This sale will  reduce the  Company's
losses  of  operations,  reduce  liabilities  and  enable  the  Company  to have
financial information more timely for reporting SEC purposes.

During the year ended March 31, 2003, the Company  acquired the worldwide rights
to the product Soltron(R) by the issuance of 9,000,000  restricted shares of its
common stock. These rights include the exclusive worldwide sales,  distribution,
marketing and manufacturing rights to the product,  Soltron(R), a fuel-enhancing
product.  In the year ended March 31, 2004, the value of these rights was deemed
impaired and the costs  associated  with these  rights were  written  off.  (See
Impairment of Long-Lived Assets)

Discontinued Operations - Sale of Virtual Technologies Pty. Ltd. (Australia)

On September 30, 2005,  the Company  signed an agreement for the sale of 100% of
the outstanding common stock of Virtual Technologies Pty Ltd (VT) for assumption
of all the assets  and  liabilities  of VT and a royalty  payment.  The  royalty
payment is for a period of twenty (20) years and is equal to four  percent  (4%)
of gross  sales  excluding  taxes and  freight.  The  royalty is due and payable
within forty-five (45) days at the end each calendar quarter, beginning with the
quarter  ending  December 31, 2005. As part of the sale, the Company agreed that
it would not enter into any sales, distribution, licensing, manufacturing or any


                                       8
<PAGE>
other  commercial  application  of the  PRODUCTS  (SP34E,  SP22E-A,  SP22E-B and
SB22E-C)  for a  period  of five  (5)  years  and to  maintain  all  information
concerning the PRODUCTS as confidential.

This sale has been accounted for as a discontinued  operation in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the
Impairment or Disposal of Long-lived Assets. The Company has determined that the
fair value of the  royalty  agreement  is  $120,000.  A gain on the  disposal of
$93,240 has been  recognized on the sale and  represents  the excess of the fair
value of the  royalty  agreement  less the book  value  of VT.  The  results  of
operations of VT for the current and prior periods have  therefore been reported
as discontinued operations. Operating results for VT are summarized as follows:
<TABLE>
<CAPTION>

                                                            Three Months Ended               Nine Months Ended
                                                              December 31,                    December 31,
                                                           2005             2004             2005           2004
<S>                                                      <C>                  <C>         <C>             <C>
Revenues                                               $                $   103,847     $    96,470     $   260,880
                                                                   -

Cost of Revenues                                                   -         36,893          43,143         108,573
                                                       --------------   ------------    -------------   ------------

Gross Profit                                                       -         66,954          53,327         152,307

Expenses:
     General and administrative                                    -         75,873         100,908         199,440
                                                       --------------   ------------    -------------   ------------

Operating Income (Loss) from Continuing Operations                 -         (8,919)        (47,581)        (47,133)
                                                       --------------   ------------    -------------   ------------

Other Income (Expense):
     Interest income                                               -            199             174             294
     Interest expense                                              -           (744)           (875)         (2,616)
                                                       --------------   ------------    -------------   ------------
           Total Other Income (Expense)                            -           (545)           (701)         (2,322)
                                                       --------------   ------------    -------------   ------------

Income (Loss) Before Provision for Income Taxes                    -         (9,464)        (48,282)        (49,455)

Provision for Income Taxes                                         -
                                                       --------------   ------------    -------------   ------------

Net Loss from Discontinued Operations                  $           -    $    (9,464)    $   (48,282)    $   (49,455)
                                                       ==============   ============    =============   ============
</TABLE>

Basis of Presentation, Going Concern, Management Plans

The unaudited interim consolidated  financial statements of the Company included
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles  for  interim  financial  information  and  in  accordance  with  the
instructions  for Form 10-QSB  under the Security  Exchange  Act of 1934.  These
statements  do not  include all of the  information  and  footnotes  required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the  nine-month  period  ended  December 31, 2005 are not
necessarily  indicative  of the results  that may be expected for the year ended
March 31, 2006. The unaudited  consolidated  financial statements should be read
in conjunction with the audited consolidated  financial statements and footnotes
thereto  for the fiscal year ended  March 31,  2005  included  in the  Company's
Annual Report on Form 10-KSB, as filed with Securities and Exchange Commission.

The accompanying  consolidated  financial statements have been prepared assuming
that the  Company  will  continue as a going  concern,  which  contemplates  the
realization of assets and the  satisfaction  of liabilities in the normal course
of business.  The Company has historically  experienced  significant  losses and
negative cash flows from  operations.  For the nine-month  period ended December
31, 2005, we had a net loss of $82,049. Operations have resulted in a deficiency
in working  capital of $529,691 and an accumulated  deficit of $13,568,816 as of
December 31, 2005.

During our fiscal years ended March 31, 2005 and 2004, and continuing during the
current  fiscal year, the Company has been in the middle stages as a development


                                       9
<PAGE>
company seeking to find the  complementary  mix of products for future marketing
and distribution.  The Company  continues to explore the total  distribution and
marketing for its products through established distributors,  both wholesale and
retail.  The Company  anticipates  that this  methodology  will enable it to cut
costs,  increase the revenue  stream and  increase  profits over the long range.
Although  profits may  decrease  initially  with certain  revenues  going to the
benefit of the distributors, we believe that the Company's revenues, profits and
cash flow will increase in the long term as a result of this methodology as more
distributors penetrate and sell through the end users of these products.

During  the  first  quarter  of  2006,  the  Company  intends  to bring in a new
executive management that has experience in business  development,  product line
development,  background in  distribution  channels and development of strategic
business  alliances.  The  timing  of this  will be  predicated  on the  Company
arranging  necessary  financing  to implement  various  segments of its business
plan. The Company  anticipates  exploring  expansion of additional product lines
with  environmentally  friendly  products with  established  marketplaces and to
accomplish these through mergers and acquisitions.

In  mid-January  2005 the Company  contracted the services of Mr. Robert Kohn to
review  and  formalize  the  short-term  and  long-range  plans of the  Company.
Beginning in April 2005,  Mr. Kohn became  Interim CEO for the  Company,  and is
continuing to develop the Company's  current business  environment and develop a
business  plan to move the Company  into  potential  other  profitable  business
segments and enhance the performance of the current product mix. In October 2005
Mr. Kohn became the full time CEO for the Company.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The balance  sheet is of the  Company at December  31,  2005.  The  consolidated
statement of  operations  for the three and nine months ended  December 31, 2005
and 2004 includes the activity of Solpower  Corporation and Virtual Technologies
Pty Ltd  (VT).  VT has  been  presented  in  these  statements  as  discontinued
operations.  All significant  inter-company  transactions and accounts have been
eliminated in consolidation.

Pervasiveness of Estimates

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

Fair Value of Financial Instruments

Accounts  receivable,  accounts and loans payable,  customer  deposits,  line of
credit,  and accrued  liabilities are  substantially  current or bear reasonable
interest rates. As a result, the carrying values of these financial  instruments
approximate fair value.

Revenue Recognition

Revenues from sales to  distributors  and resellers are recognized  when related
products  are shipped.  Revenues  from  consignment  sales are  recognized  when
payments  are  received.  The Company had no  consignment  sales for the periods
presented. Royalty income is recognized in the quarter earned.

Cash and Cash Equivalents

All short-term  investments  purchased with an original maturity of three months
or less is considered to be cash equivalents.  Cash and cash equivalents include
cash on hand and amounts on deposit with a financial institution.


                                       10
<PAGE>
Accounts Receivable

The Company follows the allowance method of recognizing  uncollectible  accounts
receivable.  The allowance method recognizes bad debt expense as a percentage of
accounts receivable based on a review of the individual accounts outstanding and
the Company's prior history of uncollectible  accounts  receivable.  The Company
does not have a formal policy to charge  interest on late payments of receivable
amounts.

Concentration of Credit Risk

The Company  sells its products and extends  credit to various  customers  based
upon their financial  condition.  Exposure to losses on accounts  receivables is
principally  dependent  on each  customer's  financial  condition.  The  Company
monitors its exposure for credit losses and maintains  allowances  for potential
losses when required.

During the nine-month period ended December 31, 2005, one customer accounted for
approximately 87% of the Soltron(R) revenue. The customer referred to is a major
distributor of Soltron(R) product.

Inventory

Inventory  at  December  31,  2005  consists  of the  Soltron(R)  fuel  additive
concentrate,  and is stated at the lower of cost or market  using the  first-in,
first-out  (FIFO)  method.  The Company  periodically  reviews its inventory and
makes provisions for damaged or obsolete inventory,  if necessary.  No provision
for  damaged  or  obsolete  inventory  has  been  included  in the  accompanying
financial statements.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided for on the
straight-line  and declining  balance methods over the estimated useful lives of
the assets.  Ordinary maintenance and repairs that neither materially add to the
value of the property nor appreciably prolong its life are charged to expense as
incurred. Betterments or renewals are capitalized when incurred. When assets are
retired or disposed,  the cost and accumulated  depreciation are eliminated from
the account and any gain or loss is reflected in the statement of operations.

Estimated useful lives of the assets are as follows:
         Computer and Office Equipment                      5 years
         Furniture                                        5-7 years

Intangible Asset - Royalty Contract

The royalty  contract is a provision  in the sale of Virtual  Technologies  Pty.
Ltd.  (Australia) at September 30, 2005. The sales contract provides for royalty
payments  for a period of twenty (20) years and is equal to four percent (4%) of
gross sales excluding  taxes and freight.  The royalty is due and payable within
forty-five  (45)  days at the end  each  calendar  quarter,  beginning  with the
quarter  ending  December 31, 2005. As part of the sale, the Company agreed that
it would not enter into any sales, distribution, licensing, manufacturing or any
other  commercial  application  of the  PRODUCTS  (SP34E,  SP22E-A,  SP22E-B and
SB22E-C)  for a  period  of five  (5)  years  and to  maintain  all  information
concerning the PRODUCTS as confidential.

The intangible  asset is being amortized on a straight-line  basis over the life
of the agreement.  On an ongoing basis, management will review the valuation and
amortization of contract,  taking into consideration any events or circumstances
which may have  impairment on its fair value.  At December 31, 2005,  management
has made no provision for impairment of this intangible asset.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment  whenever events or changes
in  circumstances   indicate  the  carrying  amount  of  an  asset  may  not  be
recoverable.  Recoverability  of  assets  to be held and used is  measured  by a
comparison of the carrying  amount of an asset to future  undiscounted  net cash
flows expected to be generated by the asset. If such assets are considered to be


                                       11
<PAGE>
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets  exceeded the fair value of the assets.  Assets to
be disposed of are  reported at the lower of the  carrying  amount or fair value
less costs to sell.

During the year  ended  March 31,  2004,  management  determined  that the costs
associated with the marketing licenses for Soltron(R) became impaired when sales
for this product line decreased substantially for the year ended March 31, 2004,
as compared to the sales for the previous year ended.  Accordingly,  the Company
wrote-off the balance associated with this license at March 31, 2004.

Income Taxes

Deferred  income taxes are provided on an asset and  liability  method,  whereby
deferred tax assets are  recognized  for deductible  temporary  differences  and
operating loss and tax credit  carry-forwards,  and deferred tax liabilities are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
basis.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of management,  there is uncertainty of the utilization of the operating
losses in future  periods.  Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of enactment.

Comprehensive Income (Loss)

Statement  of  Financial   Accounting  Standards  ("SFAS")  No.  130,  Reporting
Comprehensive Income,  establishes  requirements for disclosure of comprehensive
income and its components, which include, among other items, unrealized gains or
losses from marketable  securities and foreign currency translation  adjustments
that previously were only reported as a component of stockholders'  equity.  The
Company had no  components  of  comprehensive  income  (loss) during the periods
presented.

Loss per Common Share

Basic  loss per  common  share is  computed  based on  weighted  average  shares
outstanding and excludes any potential dilution from stock options, warrants and
other  common  stock  equivalents.  Basic loss per share is computed by dividing
loss available to common  shareholders by the weighted  average number of common
shares  outstanding  for the period.  Diluted net loss per common share reflects
potential  dilution from the exercise or  conversion  of securities  into common
stock or from other contracts to issue common stock. As of December 31, 2005 and
2004,  diluted  net loss per  common  share is not  included,  as the  effect of
including these shares is anti-dilutive.

At December 31, 2005,  stock options  representing  1,000,000 common shares were
outstanding  with an exercise price of $0.15.  On July 29, 2005,  750,000 of the
1,567,500 outstanding warrants were exercised and the remaining warrants expired
on July 30, 2005 unexercised.

Foreign Currency Translation

Account  balances and  transactions  denominated  in foreign  currencies and the
accounts of the  Corporation's  foreign  operations  have been  translated  into
United  States funds,  as follows:  (i) assets and  liabilities,  if any, at the
rates of  exchange  prevailing  at the  balance  sheet  date;  (ii)  revenue and
expenses  at average  exchange  rates for the  period in which the  transactions
occurred;  (iii)  exchange  gains  and  losses  arising  from  foreign  currency
transactions  are included in the  determination of net earnings for the period;
and  (iv)  exchange  gains  and  losses  arising  from  the  translation  of the
Corporation's  foreign  operations  are deferred and were included as a separate
component of stockholders' equity.

The Company purchased its wholly owned Australian subsidiary on January 31, 2003
and the foreign  currency  translation  adjustment  account is  presented in the
stockholders'  equity  section.  On September  30, 2005,  the Company  signed an
agreement for the sale of its wholly owned Australian subsidiary.


                                       12
<PAGE>
Stock-Based Compensation

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting   for  Stock  Issued  to   Employees   ("APB  25")  and  the  related
interpretations  in accounting  for its employee  stock  options.  Under APB 25,
because the  exercise  price of  employee  stock  options  equals or exceeds the
market  price of the  underlying  stock on the date of  grant,  no  compensation
expense is recorded.  If the exercise  price of employee  stock options is under
the  market  price of the  underlying  stock on the date of grant,  compensation
expense is recorded  for the price  differential  times the  quantity of options
granted. The Company has adopted the disclosure-only  provisions of Statement of
Financial  Accounting  Standards  ("SFAS") No. 123,  "Accounting for Stock Based
Compensation,"  as  amended  by  SFAS  No.  148,   "Accounting  For  Stock-Based
Compensation - Transition & Disclosure."

The Company recognized  stock-based employee  compensation for options issued to
two employees during the nine-month  period ended December 31, 2004 amounting to
$4,000 and none was incurred in the comparative period for 2005.

The fair value of option  grants is estimated as of the date of grant  utilizing
the  Black-Scholes  option-pricing  model with the  following  weighted  average
assumptions  for all grants,  expected life of options of 1.75 years,  risk-free
interest  rates of two and a quarter  percent  (2.25%),  and a zero percent (0%)
dividend yield.

Transactions in equity instruments with non-employees for goods and services are
accounted for by the fair value method.

The  effect  on our net loss and loss per  share  had  compensation  costs  been
recognized based on the fair value method prescribed by SFAS 123 "Accounting for
Stock-Based Compensation," is as follows:
<TABLE>
<CAPTION>

                                                                  Nine Months Ended
                                                                               December 31,
                                                                2005                   2004
                                                       ---------------          -------------
<S>                                                      <C>                      <C>
Reported net loss                                      $     (82,049)           $(353,907)
      Add - stock-based compensation
         expense included in reported
         net loss                                                  -                4,000
      Deduct - stock-based compensation
         expense determined under the
         fair value method                                         -              (42,000)
                                                       ---------------          -------------
      Pro forma net (loss)                             $     (82,049)           $(391,907)
                                                       ===============          =============

      Basic and diluted loss per share:
     As reported                                       $        0.00            $   (0.00)
                                                       ===============          =============
     Pro forma                                         $        0.00            $   (0.00)
                                                       ===============          =============
</TABLE>

Recent Accounting Pronouncements

In November  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of  Financial  Accounting  Standards  No. 151 (SFAS 151),  "Inventory
Costs."  SFAS 151  amends the  guidance  in APB No.  43,  Chapter 4,  "Inventory
Pricing,"  to clarify  the  accounting  for  abnormal  amounts of idle  facility
expense,  freight,  handling  costs,  and wasted material  (spoilage).  SFAS 151
requires that those items be recognized as current period charges  regardless of
whether they meet the criteria of "so abnormal." In addition,  SFAS 151 requires
that  allocation  of fixed  production  overheads to the costs of  conversion be
based on the normal capacity of the production facilities. SFAS 151 is effective
for financial  statements issued for fiscal years beginning after June 15, 2005.
The  adoption  of SFAS 151 is not  expected  to have a  material  effect  on the
Company's financial position or results of operations.

In December 2004, the FASB issued  Statement of Financial  Accounting  Standards
No. 153 (SFAS 153),  "Exchanges  of  Non-monetary  Assets."  SFAS 153 amends the
guidance in APB No. 29,  "Accounting  for  Non-monetary  Assets."  APB No.29 was


                                       13
<PAGE>
based on the principle that exchanges of non-monetary  assets should be measured
on the fair  value  of the  assets  exchanged.  SFAS 153  amends  APB No.  29 to
eliminate the exception for non-monetary  exchanges of similar productive assets
and replaces it with a general  exception for exchanges of  non-monetary  assets
that do not have commercial substance if the future cash flows of the entity are
expected  to  change  significantly  as a result  of the  exchange.  SFAS 151 is
effective for financial  statements issued for fiscal years beginning after June
15, 2005. The adoption of SFAS 153 is not expected to have a material  effect on
the Company's financial position or results of operations.

In December 2004, the FASB revised Statement of Financial  Accounting  Standards
No. 123 (SFAS  123(R)),  "Accounting  for  Stock-Based  Compensation."  The SFAS
123(R)  revision  established  standards for the accounting for  transactions in
which an entity  exchanges  its equity  instruments  for goods or  services  and
focuses  primarily on accounting  for  transactions  in which an entity  obtains
employee services in share-based  payment  transactions.  It does not change the
accounting guidance for share-based payment transactions with parties other than
employees.  For public entities that do not file as small business issuers,  the
revisions to SFAS 123 are  effective as of the beginning of the first interim or
annual  reporting  period that begins after June 15, 2005.  For public  entities
that file as small business issuers,  the revisions to SFAS 123(R) are effective
as of the beginning of the first interim or annual  reporting period that begins
after December 15, 2005. For non-public entities,  the revisions to SFAS 123 are
effective as of the beginning of the first annual  reporting  period that begins
after  December  15,  2005.  Management  has not yet  determined  the effects of
adopting  this  statement  on the  Company's  financial  position  or results of
operations.

In May  2005,  the FASB  issued  SFAS no.  154,  "Accounting  Changes  and Error
Corrections  ("SFAS No.  154") which  replaces  APB Opinion No. 20,  "Accounting
Changes"  and SFAS No. 3,  "Reporting  Accounting  Changes in Interim  Financial
Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance on
the  accounting for and reporting of accounting  changes and error  corrections.
Specially,  this statement  requires  "retrospective  application" of the direct
effect  foe a  voluntary  change  in  accounting  principle  to  prior  periods'
financial  statements,  if it is practical to do so. SFAS No. 154 also  strictly
defines  the term  "restatement"  to mean the  correction  of an error  revising
previously issued financial statements. SFAS No. 154 is effective for accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005 and are  required to be adopted by the Company in the first  quarter of
fiscal year 2007.  Although we will continue to evaluate the application of SFAS
No. 154,  management  does not currently  believe  adoption will have a material
impact on our results of operations, financial position or cash flows.

NOTE 3 - RELATED PARTY TRANSACTIONS

Convertible Loan Payable to Related Party

On September 18, 2000, the Company issued a $400,000 Convertible Promissory Note
to entities  controlled  by Peter Voss.  The note matured on September 18, 2001,
and was  convertible  into  common  shares of the  Company  at the lesser of the
market price on the date conversion  notice is given to the Company or $0.40 per
share for the amount of  principal  outstanding  at  conversion.  The note bears
interest at 8% percent per annum,  payable  quarterly  in arrears.  The note was
unpaid at December 11,  2002,  with  accrued  interest on the note  amounting to
$71,365 and the note and Dominion Capital Pty Ltd. assigned accrued interest, to
Peter Voss.  Pursuant to the  provisions of the Assignment and Amendment of Debt
Agreement,  the interest rate was reduced from 8% to 5%,  quarterly  payments of
$64,813  were to be made,  and the  conversion  rate was reduced  from $0.40 per
common  share  to  $0.10  per  common  share.  The due date of the note was also
extended an  additional  twenty-four  (24) months from the date of the Agreement
signing on November 22, 2002. As of November 22, 2004, no payments had been made
on this obligation.  Subsequent to the amended due date of the note, the Company
negotiated with Peter Voss to convert the loan  obligation and accrued  interest
into common shares. On January 18, 2005, the Company's Board of Directors agreed
by unanimous consent to settle the debt and accrued interest for the issuance of
11,000,000 shares of restricted common stock


                                       14
<PAGE>
Purchase of Virtual Technologies (Australia) Pty Ltd.

Effective  January  31,  2003,  the  Company  issued  6,000,000  shares  of  its
unregistered,  restricted  Common Stock pursuant to the terms the Share Purchase
and  Sale  Agreement  with  Virtual  Technologies   (Australia)  Pty  Ltd.  This
acquisition delivers the exclusive worldwide sales, distribution,  marketing and
manufacturing  rights to the  products,  SP34E,  SP22E-A,  SP22E-B and  SP22E-C,
refrigerant gas products. On September 30, 2005 the Company sold the outstanding
stock of Virtual  Technologies Pty. Ltd. including all assets and liabilities in
exchange for a royalty of 4% on all gross sales for the next twenty years.  This
sale will reduce the Company's  losses of  operations,  reduce  liabilities  and
enable the  Company to have  financial  information  more  timely  basis for SEC
reporting purposes.

Purchase of Soltron(R) Worldwide Rights

On February 20, 2003, the Company  acquired the worldwide  rights to the product
Soltron(R)  under the terms of the  Acquisition  Agreement,  by the  issuance of
9,000,000  restricted  shares of its common  stock to Dominion  Capital Pty Ltd.
This  acquisition   delivered  the  exclusive  worldwide  sales,   distribution,
marketing and manufacturing  rights for the enzyme technologies for the product,
Soltron(R),  a fuel-enhancing product. The costs associated with these marketing
rights were  written off as of March 31,  2004 due to a  determination  that the
value of these assets was impaired

Issuance of Options to Director and Employee

On June 1, 2004,  the Company  issued an  aggregate of 400,000 call options to a
director and to an employee for an aggregate consideration amount of $6,000. The
call options are exercisable for a three-year period and at an exercise price of
$0.15 a share.

NOTE 4 - EQUITY BASED TRANSACTIONS

Call Options Sold

On June 1, 2004, the Company  issued  600,000 call options to three  individuals
and 400,000 call options to two  employees  for an aggregate  total of 1,000,000
call options and received an aggregate consideration amount of $15,000. The call
options are exercisable for a three year period and at an exercise price $0.15 a
share.

Exercise of Warrants and Sale of Common Stock

On  July  29,  2005,  750,000  warrants  were  exercised  for  the  purchase  of
unregistered common stock at $0.20 per share.

On October 2, 2005, the Company issued  500,000  shares of  unregistered  common
stock at $0.05  per  share for stock  subscriptions  received  May 2005  through
September  2005 from  accredited  investors  pursuant to a private  placement of
securities.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

THIS FORM 10-QSB MAY CONTAIN CERTAIN  "FORWARD-LOOKING"  STATEMENTS AS SUCH TERM
IS DEFINED IN THE PRIVATE  SECURITIES  LITIGATION  REFORM ACT OF 1995 AND BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE  REGISTRANT'S  EXPECTATIONS OR BELIEFS,  INCLUDING BUT NOT LIMITED
TO, STATEMENTS  CONCERNING THE REGISTRANT'S  OPERATIONS,  ECONOMIC  PERFORMANCE,
FINANCIAL CONDITION, GROWTH AND ACQUISITION STRATEGIES,  INVESTMENTS, AND FUTURE
OPERATIONAL  PLANS. FOR THIS PURPOSE,  ANY STATEMENTS  CONTAINED HEREIN THAT ARE
NOT  STATEMENTS  OF  HISTORICAL  FACT  MAY  BE  DEEMED  TO  BE   FORWARD-LOOKING


                                       15
<PAGE>
STATEMENTS.  WITHOUT  LIMITING THE  GENERALITY OF THE  FOREGOING,  WORDS SUCH AS
"MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE", "INTENT", "COULD", "ESTIMATE",
"MIGHT",  "PLAN",  "PREDICT" OR "CONTINUE"  OR THE NEGATIVE OR OTHER  VARIATIONS
THEREOF OR  COMPARABLE  TERMINOLOGY  ARE  INTENDED TO  IDENTIFY  FORWARD-LOOKING
STATEMENTS.  THESE  STATEMENTS  BY THEIR NATURE  INVOLVE  SUBSTANTIAL  RISKS AND
UNCERTAINTIES,  CERTAIN OF WHICH ARE BEYOND THE REGISTRANT'S CONTROL, AND ACTUAL
RESULTS  MAY DIFFER  MATERIALLY  DEPENDING  ON A VARIETY OF  IMPORTANT  FACTORS,
INCLUDING UNCERTAINTY RELATED TO ACQUISITIONS, GOVERNMENTAL REGULATION, MANAGING
AND  MAINTAINING  GROWTH,  THE  OPERATIONS OF THE COMPANY AND ITS  SUBSIDIARIES,
VOLATILITY  OF STOCK  PRICE AND ANY OTHER  FACTORS  DISCUSSED  IN THIS AND OTHER
REGISTRANT FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY DOES
NOT INTEND TO  UNDERTAKE  TO UPDATE THE  INFORMATION  IN THIS FORM 10-QSB IF ANY
FORWARD-LOOKING STATEMENT LATER TURNS OUT TO BE INACCURATE. THE FOLLOWING SHOULD
BE READ IN CONJUNCTION  WITH THE INFORMATION  PRESENTED IN THE COMPANY'S  ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED MARCH 31, 2005.

Going Concern

The accompanying  consolidated  financial statements have been prepared assuming
that the  Company  will  continue as a going  concern,  which  contemplates  the
realization of assets and the  satisfaction  of liabilities in the normal course
of business.  The Company has historically  experienced  significant  losses and
negative cash flows from  operations.  For the nine-month  period ended December
31, 2005, we had a net loss of $82,049. Operations have resulted in a deficiency
in working  capital of $529,691 and an accumulated  deficit of $13,568,816 as of
December 31, 2005.

There can be no  assurance  that the Company will be able to continue as a going
concern in view of its financial  condition.  The Company's  continued existence
will depend upon its ability to obtain sufficient additional capital in a timely
manner to fund its  operations  and to further  develop its  long-term  business
plan. Any inability to obtain additional  financing will have a material adverse
effect on the Company, including possibly requiring the Company to significantly
reduce or cease its operations.

These  factors  raise  substantial  doubt  about the  ability of the  Company to
continue  as a going  concern.  The  consolidated  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies

Our  consolidated  financial  statements  have been prepared in accordance  with
accounting principles generally accepted in the United States of America,  which
require  us to make  estimates  and  judgments  that  significantly  affect  the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure of contingent  assets and liabilities at the date of the consolidated
financial statements.  Note 2, "Significant Accounting Policies" in the Notes to
the  Consolidated   Financial  Statements  in  our  Form  10-QSB  describes  our
significant  accounting  policies  which are reviewed by management on a regular
basis.

An  accounting  policy is deemed by us as critical if it requires an  accounting
estimate to be made based on assumptions about matters that are uncertain at the
time the estimate is made, and if different estimates that reasonably could have
been used, or changes in the accounting  estimates that are reasonable likely to
occur  periodically,  could  materially  impact the  financial  statements.  The
policies and estimates  that we believe are most critical to the  preparation of
our  consolidated  financial  statements  and that  require  a higher  degree of
judgment are:


                                       16
<PAGE>
Stock-based  compensation;  and Valuation of extended  warrants  under the Black
Scholes option-pricing model.

Operating Results for the Three Months Ended December 31, 2005 and 2004

Revenues - Revenues for the three months ended  December 31, 2005 were  $170,768
as compared to $184,582  for the three  months  ended  December  31,  2004.  The
decrease  in  revenues  of $13,814 was mainly  attributable  to  decreased  bulk
Soltron(R)  sales  to a major  distributor.  Operations  from our  wholly  owned
subsidiary have been classified as discontinued operations in the current period
and the prior year comparable period.

Gross  Profit - Gross  profit  increased  from 54.7% for the three  months ended
December  31, 2004 to 65.1% for the three months  ended  December 31, 2005.  The
increased  gross  profit  margin  of 10.4%  is  mainly  attributable  to a price
increase  on the  Soltron(R)  product and a  retroactive  price  adjustment  for
Soltron(R) sales in the previous quarter.. The total gross profit earned for the
three months ended December 31, 2005  increased  $10,209 to $111,238 as compared
to $101,029 for the three months ended December 31, 2004. This increase in gross
profit is attributable to the retroactive price adjustment made for the previous
quarter.

General  and  Administrative  Costs - General and  administrative  costs for the
three months ended  December 31, 2005 were  $172,493 as compared to $131,274 for
the same period ended December 31, 2004, or an increase of $41,219. The increase
is primarily comprised of increases in consulting fees of $27,233,  professional
fees of  $9,171,  office  operating  costs of $6,732,  travel and  entertainment
expenses of $20,799 and executive costs of $18,745.  These increases were offset
mainly by decreases in investor relations / marketing costs of $37,047 and sales
costs of $5,261.

Income  (Costs)  Associated  with Extended  Warrants - On January 21, 2004,  the
Board of  Directors of the Company  extended  the  exercise  period of 1,567,000
warrants from January 31, 2004 to January 31, 2005 and on January 11, 2005,  the
Board  extended the exercise  period to July,  30,  2005.  The warrants  have an
exercise price of $0.20 per warrant.  At December 31, 2004, none of the extended
warrants were exercised.  The Company applied variable accounting in relation to
the  extended  warrants  at  December  31,  2004.  Utilizing  the  Black-Scholes
option-pricing  model the  revaluation  of the extended  warrants  resulted in a
credit to  operations  amounting to $15,670 for the period  ending  December 31,
2004 and no  associated  entry for the three months ended  December 31, 2005. On
July 29, 2005, 750,000 of the warrants were exercised and the remaining warrants
expired on July 30, 2005 unexercised.

Net  Loss - The  Company's  consolidated  net loss for the  three  months  ended
December 31, 2005 was $54,547 as compared to a net loss of $29,980  incurred for
the  comparable  three-month  period ended  December  31, 2004.  The increase of
$24,567 in net loss for the current period ended is mainly  attributable  to the
increased gross profit earned and increased general and administrative  expenses
incurred during the three month period ended December 31, 2005. .

Operating Results for the Nine Months Ended December 31, 2005 and 2004

Revenues - Revenues for the nine months ended December 31, 2005 were $572,013 as
compared to $364,941 for the nine months ended  December 31, 2004.  The increase
in revenues of $207,072 was mainly  attributable  to increased  bulk  Soltron(R)
sales to a major  distributor.  Operations from our wholly owned subsidiary have
been classified as  discontinued  operations in the current period and the prior
year comparable period.

Gross  Profit - Gross  profit  decreased  from 56.5 % for the nine months  ended
December  31, 2004 to 54.1% for the nine months ended  December  31,  2005.  The
decrease in the gross profit from Soltron(R) is a direct result of lower margins
on the sale of the Soltron(R) product due to increased  production costs related
to  increased  prices in  solvents  and these  costs were not passed  through to
increased finished product prices until our quarter ending December 31,2005.  As
a result of the increased sales revenue,  total gross profit earned for the nine


                                       17
<PAGE>
months ended December 31, 2005 increased  $103,144 to $309,473 from $206,359 for
the comparable period ended December 31, 2004.

General and Administrative Costs - General and administrative costs for the nine
months  ended  December  31, 2005 were  $443,788 as compared to $429,762 for the
comparable  period  ended  December  31,  2004,  or an increase of $14,026.  The
increase is primarily comprised increased consulting fees of $88,571, travel and
entertainment  expenses  of  $31,734  and  executive  costs  of  $14,534.  These
increases  were  offset by  decreases  in investor  relations / marketing  costs
aggregating $124,439.

Income  (Costs)  Associated  with Extended  Warrants - On January 21, 2004,  the
Board of  Directors of the Company  extended  the  exercise  period of 1,567,000
warrants from January 31, 2004 to January 31, 2005 and on January 11, 2005,  the
Board  extended the exercise  period to July,  30,  2005.  The warrants  have an
exercise price of $0.20 per warrant.  At December 31, 2004, none of the extended
warrants were exercised.  The Company applied variable accounting in relation to
the  extended  warrants  at  December  31,  2004.  Utilizing  the  Black-Scholes
option-pricing  model the  revaluation of the extended  warrants  resulted in no
entry effecting operations the period ending December 31, 2004 and no associated
entry for the nine - months ended  December 31, 2005. On July 29, 2005,  750,000
of the warrants were  exercised and the remaining  warrants  expired on July 30,
2005 unexercised.

Costs  Associated with Issuance of Options - During the nine-month  period ended
December 31, 2004, we incurred a $63,000 charge for the issuance of 600,000 call
options to three individuals.  The cost associated with the issuance of the call
options was determined utilizing the Black-Scholes option-pricing model.

Net  Loss - The  Company's  consolidated  net loss  for the  nine  months  ended
December 31, 2005 was $82,049 as compared to a net loss of $353,907 incurred for
the  comparable  nine-month  period ended December 31, 2004. The decrease in net
loss of $271,858 for the current nine month period ended is mainly  attributable
to the  increased  gross  profit of  $103,114,  decreased  interest  expense  of
$17,797,  no recognized  costs  associated  with options of $63,000 and a profit
recognized  in the  current  period on  discontinued  operations  of  $44,958 as
compared to a loss on  discontinued  operations  for the  comparable  prior year
period of $49,455.

Plan of Operation

We continue to historically report significant losses. Nevertheless,  we believe
that we may be able to  continue  to reduce our  operating  losses  based on the
current trend of increasing  Soltron(R)  product sales,  together with licensing
fees  from  Virtual  Technologies  Pty  Ltd.  Because  of  discussions  with new
distributors  we anticipate  increased  sales of Soltron  during our fiscal year
2006.

During our fiscal years ended March 31, 2005 and 2004, and continuing during the
current  fiscal year, the Company has been in the middle stages as a development
company seeking to find the  complementary  mix of products for future marketing
and distribution.  The Company  continues to explore the total  distribution and
marketing for its products through established distributors,  both wholesale and
retail.  The Company  anticipates  that this  methodology  will enable it to cut
costs,  increase the revenue  stream and  increase  profits over the long range.
Although gross profits may decrease initially with certain revenues going to the
benefit of the distributors, we believe that the Company's revenues, profits and
cash flow will increase in the long term as a result of this methodology as more
distributors penetrate and sell through to the end users of these products.

During the first  quarter  of 2006 the  Company  intends to bring in  additional
executive  management  expertise  that has  experience in business  development,
product line development, background in distribution channels and development of
strategic business  alliances.  Part of the business plan is to arrange adequate
financing  to assist the Company to implement  these  business  strategies.  The
Company  anticipates  exploring  expansion  of  additional  product  lines  with
environmentally   friendly   products  with  established   marketplaces  and  to
accomplish these through acquisitions and exclusive licenses.

In  mid-January  2005 the Company  contracted the services of Mr. Robert Kohn to
review and  formalize  the  short-term  and long-  range  plans of the  Company.


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<PAGE>
Beginning  in April  2005,  Mr. Kohn became  interim  CEO for the  Company,  and
continues to review of the Company's current business  environment and develop a
business  plan to move the Company  into  potential  other  profitable  business
segments and to enhance the  performance of the current  product mix. In October
2005 Mr. Kohn became the full time CEO for the Company.

We intend to seek to have our securities quoted on the OTC Bulletin Board, which
may  provide  a better  ability  to  attract  investors.  We are in  process  of
completing our Securities Act filings to facilitate  this process.  We intend to
raise capital to provide working  capital and to expand our present  operations.
We also  have  outstanding  stock  options  that,  if  converted,  will  provide
additional cash flow for working capital.

Liquidity and Capital Reserves

Product sales did not provide  sufficient working capital to fund our operations
during the  nine-month  period  ended  December 31,  2005.  Operations  utilized
$179,079 of cash during this period.  Additional  liquidity  was provided by the
sale of common stock and the exercise of warrants amounting to $175,000.  During
the  comparable  for the previous year  reporting  period,  $230,388 of cash was
utilized by operations. Additional liquidity for this period was provided mainly
from advances from a major  distributor of our Soltron product and proceeds from
the sale of common stock and subscriptions  receivable amounting to $214,620. As
of December 31, 2005, we had no commitments for capital expenditures.

Factors Affecting Future Performance and Risks

Limited  Operating  History  - We have  only a limited  operating  history  with
respect to the distribution and marketing of Soltron(R).

History of Losses - We have  consistently  had  significant  negative cash flow,
operating losses and insufficient  liquidity with respect to current operations,
all  of  which  we  expect  to  continue  until  our  sales  revenues   increase
substantially.  There can be no  assurance  that we will be able to achieve,  or
maintain, profitable operations or positive cash flow at any time in the future.

Additional Capital Requirement - We will require significant  additional capital
to meet our growth  objectives  and to fully  implement  our  business  plan and
expand our operations.  We will need to continue raising working capital through
private  placement  equity  financing we may also seek additional debt financing
through  banks,  other  financial  institutions,  companies or  individuals.  No
assurance can be given that we will be able to obtain any such additional equity
or debt financing on satisfactory terms or at all. Further, even if financing is
obtained,  no assurance  can be given that such  financing  would be adequate to
meet our needs for the foreseeable  future.  If we are unsuccessful in obtaining
sufficient  additional  capital,  our ability to  continue as a viable  business
enterprise will be substantially impaired.

Need to Develop Sales and Product  Awareness -  Establishment  of a distribution
network  sufficient to create and supply  customer demand for Soltron(R) will be
critical to our future success. We anticipate  developing this network primarily
through  distributors  with established  distribution  channels in the fuel, oil
chemical and automotive aftermarket industries. Numerous factors, including lack
of  sufficient  inventory  or  capital,  or failure of our  products to generate
sufficient demand and lack of sufficient  qualified,  experienced  personnel may
contribute  to the  difficulties  we will  face  in  establishing  an  efficient
distribution  network  for our  products.  While we intend  to engage  qualified
personnel to assist in establishing our distribution  network,  no assurance can
be given that our products will be accepted by  industrial or retail  consumers,
that  a  satisfactory  distribution  network  can be  established  or  that  our
operations will ever be profitable.

Uncertainty of Market Acceptance of Products,  Limited Marketing Experience - We
are still in the early  stages of marketing  Soltron(R).  As is typical with new
products,  demand and market  acceptance  for our  products is subject to a high
degree of uncertainty.  Achieving  widespread market acceptance for our products
will require  substantial  marketing  efforts and the  expenditure of sufficient
funds to create brand  recognition  and customer  demand and to cause  potential


                                       19
<PAGE>
customers to consider the potential benefits of our products.  The prospects for
our product line will be largely  dependent  upon our ability to achieve  market
penetration,  which  will  require  significant  efforts  on our part to  create
awareness of and demand for our products. Our ability to build our customer base
will depend in large part on our ability to locate,  hire and retain  sufficient
qualified  marketing   personnel  and  to  fund  marketing  efforts,   including
advertising. There can be no assurance that our products will achieve widespread
market acceptance or that our marketing efforts will result in future profitable
operations.

Variability  of Operating  Results and  Volatility  of Common Stock Prices - Our
quarterly  operating  results have in the past been, and are  anticipated in the
future to be, highly  volatile.  While we anticipate that increased sales of our
products  will  continue  to  generate  revenue,  the  operating  results of any
quarterly period as compared to the previous quarter or the same quarter for the
prior period will, in all likelihood, vary significantly.  Significant variances
in operating  results from period to period could result in high  volatility  of
the market price for our common stock.

Limited Product Line - We currently hold the marketing and  distribution  rights
to Soltron(R). Our future success and profitability will, to a very high degree,
depend upon the market  acceptance of these  products and our ability to improve
these products.

Supply,  Capacity and  Distribution  Constraints  - To  successfully  market our
products, we must be able to fill orders promptly for our shipment.  Our ability
to meet our  supply  requirements  promptly  will  depend  on  numerous  factors
including  our  ability to  establish  successfully  an  effective  distribution
network and to maintain adequate  inventories.  The ability of our sole supplier
of the  Soltron(R)  enzyme to adequately  produce the enzymes  needed to produce
Soltron(R) in volumes  sufficient to meet demand will also affect our ability to
produce this product.  Failure to adequately supply products to distributors and
retailers or of any of our suppliers to produce sufficient materials to meet our
demand would materially adversely impact our operations.

Dependence  Upon Raw  Materials  and  Supplier  - We are  dependent  on a single
supplier  of the  enzyme  concentrate  needed  to make  Soltron(R)  and on other
suppliers of chemicals.  Chemicals are subject to price  fluctuations based upon
supply and demand.  In addition,  because the  Soltron(R)  enzyme is produced in
Japan,  fluctuations in currency values could adversely  affect our cost of this
product.  Interruption of our product supply could result from several  factors,
such as disruption of supply of raw product,  work  stoppages,  strikes or other
labor  difficulties,  changes in  governmental or  international  regulations or
natural or man caused  disasters  occurring with respect to our  suppliers.  Any
increase in the costs of our raw materials or disruption of our suppliers  could
severely and adversely affect our business operations.

Reliance on Management;  Limited Personnel - Attracting and retaining  qualified
personnel is critical to our business plan. Our inability to attract  additional
qualified  personnel would have a materially adverse affect on our business.  No
assurances  can be  given  that  we  would  be able to  attract  such  qualified
personnel or agents, or to successfully implement our business plan.

Management  of Growth - We anticipate  growth in the future,  which will require
effective  management of all aspects of our business.  If achieved,  this growth
may place significant strains on our financial,  managerial, personnel and other
resources.  Failure to effectively  manage our  anticipated  growth could have a
materially adverse effect on our business and profitability.

Competition  - The markets for fuel  additives,  refrigerants  and enzyme  based
cleaning and bio-remediation  products are highly  competitive.  We believe that
our  products  and our  management's  qualifications  will  enable us to compete
effectively in these  markets,  but we cannot give any assurance that we will be
successful. We will be competing with established manufacturers and distributors
that have already  developed brand  recognition and gained consumer  acceptance.
Many of these  competitors  have  significantly  greater  financial,  marketing,
personnel,  managerial and other  resources than we do. New competitors may also
enter these  markets.  Even though we believe our products are superior to those
of our competitors, our lack of financial strength and brand recognition will be
significant  disadvantages to our ability to penetrate and compete in our target
markets.


                                       20
<PAGE>
Limited Patent and Proprietary  Information  Protection - We do not believe that
our products or our  proprietary  production  processes  infringe on proprietary
rights of others, but we cannot give any assurance that infringement claims will
not be made  against us. If it is  determined  that our products or processes do
infringe someone else's  proprietary  rights, we could be required to modify our
products or processes or obtain a license to continue our use of them. There can
be no  assurance  that we  would  be able to do this in a  timely  manner,  upon
acceptable  terms and  conditions  or at all.  Our failure to do so would have a
material adverse effect on our business. In addition,  there can be no assurance
that we would have the  financial or other  resources  necessary to prosecute or
defend a patent  infringement or other proprietary rights action.  Moreover,  if
any of our products or processes  were held to infringe  patents or  proprietary
rights of others,  we could,  under  certain  circumstances,  be held liable for
damages,  which could be  significant  in amount and which could  materially and
adversely effect our operations.  We rely on confidentiality  agreements,  trade
secret protection and other methods to protect our processes,  concepts,  ideas,
documentation  and other  information  related to our products  and  proprietary
processes.  However,  these methods may not afford complete protection and there
can be no assurance that others will not independently  develop similar products
and  processes.  All of our  employees  are  required  to  sign  non-disclosure,
non-competition and inventions agreements,  but there can be no assurance that a
court  would  enforce  such  agreements  or that they would  provide us with any
meaningful  protection.  There  can be no  assurance  that  we  will  be able to
adequately  protect our trade secrets or that other  companies  will not acquire
information that we consider proprietary.

Product  Acquisition  Agreement - We own the worldwide rights to manufacture and
distribute  Soltron(R),  as well as the process,  formulae and other proprietary
rights related to such products, pursuant to product acquisition agreements with
Dominion  Capital.  Any  termination  or  impairment  of the rights of  Dominion
Capital to such proprietary rights or to our rights under these agreements would
materially adversely affect our operations.

Need for Additional  Product  Development - We believe that our development work
on Soltron(R) is  substantially  complete,  but testing of these products in the
United  States has been  limited.  We  anticipate  that our future  research and
development activities, combined with experience we hope to gain from commercial
production  and  use  of our  products  will  result  in the  need  for  further
refinement of our products and development of new products. Such refinements and
development may be required for our products to remain competitive. There can be
no  assurance  that we will  have  the  experience  or the  financial  resources
necessary  to make such  improvements  to our product  line,  which could have a
significant negative impact on our business.

Adequacy  of  Product  Liability  Insurance  - The use of our  products  entails
inherent  risks that could expose us to product  liability  claims,  which could
have a material adverse effect on our business and financial condition. While we
do maintain product  liability  insurance to cover these types of claims,  there
can be no  assurance  that  we  will  be able  to  maintain  such  insurance  on
acceptable terms or, even if maintained, that such insurance would be sufficient
to cover all potential claims.

Control  by  Existing   Stockholders/Foreign   Stockholders   -  Our   principal
stockholder,  and its  affiliates  own or  control  a  substantial  block of our
outstanding common stock. Accordingly, these stockholders,  acting together, are
able to effectively  control  matters  requiring  approval by our  stockholders,
including  the  election  of our board of  directors  and  approval  of  certain
significant  transactions.  Our principal  stockholder is domiciled in Australia
and if we, or our  stockholders,  were to bring  legal  action  against  it, its
domicile in a foreign  country may prevent it from being subject to jurisdiction
of a United States court.  While our  stockholders  or we may be able to proceed
against these entities in an Australian court, such actions may be prohibitively
expensive and an Australian  court may not recognize  claims or provide remedies
similar to those available in United States courts.

International Trade - We currently anticipate selling Soltron(R)  worldwide,  as
well as  importing  Soltron(R)  concentrate  from  Japan.  This will  expose our
business to certain additional risks related to doing business  internationally,
which could include,  among others,  fluctuations  in currency  exchange  rates,
changes  in  both  United  States  and  foreign   import  and  export  laws  and


                                       21
<PAGE>
regulations,  increases in tariffs,  customs,  foreign tax liabilities and other
adverse United States and foreign tax consequences  and potential  difficulty in
contract  enforcement.  Risks of conducting  international  business  operations
could have a negative impact on our overall business.

ITEM 3 - CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer have evaluated
the Registrant's disclosure controls and procedures within 90 days of the filing
date of this annual  report.  Based upon this  evaluation,  the Company's  Chief
Executive  Officer and Chief Financial Officer have concluded that the Company's
disclosure  controls  and  procedures  pursuant to Exchange Act Rules 13a-15 and
15d-15 as of the end of the period  covered  by this  report  are  effective  in
ensuring that material  information  required to be disclosed is included in the
reports that it files with the  Securities and Exchange  Commission  were timely
recorded,  processed  and  reported  within the time  periods  specified  in the
Securities and Exchange commission rules and forms.

There were no significant  changes in the Company's internal controls or, to the
knowledge  of the  management  of the  Company,  in  other  factors  that  could
significantly affect these controls subsequent to the evaluation date.


                                     PART II
                                OTHER INFORMATION

ITEM 2.       UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

     On July 29,  2005,  750,000  warrants  were  exercised  for the purchase of
     unregistered common stock at $0.20 per share.

     On October 2, 2005,  the  Company  issued  500,000  shares of  unregistered
     common stock at $0.05 per share for stock  subscriptions  received May 2005
     through  September  2005 from  accredited  investors  pursuant to a private
     placement of securities.

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

     None.

ITEM 6.       EXHIBITS

     (a) The following exhibits are filed as part of this report:

     31.1  Certification of Chief Executive officer and Chief accounting Officer
     of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a).

     32.1  Certification of Chief Executive officer and Chief accounting Officer
     pursuant to 18 U.S.C. - Section 1350.



SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                       22
<PAGE>
Dated:  February 14, 2006                SOLPOWER CORPORATION

                                         By:  /s/ Robert  Kohn
                                           -------------------
                                              Robert Kohn
                                              Chief Executive Officer, Principal
                                              Accounting Officer

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