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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

(Mark One)

[   ] Registration Statement Pursuant to Section 12(b)
or (g) of the Securities Exchange Act of 1934.

or

[X] Annual Report Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934 for the Fiscal Year Ended December 31,
2010.

or

[   ] Transition Report Pursuant to Section 13 OR
15(d) of the Securities Exchange Act pf 1934. For the transition period from
_______ to ________.

Commission file number 000-52145

RAINCHIEF ENERGY INC.(Exact name of Registrant as specified in its charter)

__________________________________________________________(Translation
of Registrant's name into English)

Business Corporations Act (British Columbia)(Jurisdiction of incorporation or organization)

Suite 900  925 West Georgia Street, Vancouver, BC,
Canada, V6C 3L2(Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act.

|Title of each class                        | Name of each exchange on which registered 
|------------------------------------------ | ------------------------------------------
|__________________________________________ | __________________________________________

Securities registered or to be registered pursuant to Section
12(g) of the Act.

Common Stock, without par value
  (Title of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

______________________________________________(Title of
Class)

Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period covered by the annual report: 37,573,908 as
at December 31, 2010.

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

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to filed reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 [   ]
Yes     [X] No

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) [X] Yes [   ] No; and
(2) has been subject to such filing requirements for the past 90 days. [X]
Yes [   ] No.

Indicate which financial statement item the registrant elects to
follow: [X] Item 17     [   ] Item 18.

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

|Large accelerated filer [   ] | Accelerated filer [   ] | Non-accelerated filer [X]
|----------------------------- | ----------------------- | -------------------------

If this is an annual report, indicated by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[   ] Yes     [X] No

2

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Rainchief Energy Inc.

Table of Contents

|PART
      I                                                                                      | 4 
|------------------------------------------------------------------------------------------------- | --
|ITEM
      1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                               | 4 
|ITEM
      2. OFFER STATISTICS AND EXPECTED TIMETABLE                                             | 4 
|ITEM
      3. KEY INFORMATION                                                                     | 5 
|ITEM
      4. INFORMATION ON THE COMPANY                                                          | 10
|ITEM
      5. OPERATING AND FINANCIAL REVIEW                                                      | 12
|ITEM
      6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                          | 16
|ITEM
      7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.                                  | 18
|ITEM
      8. FINANCIAL INFORMATION                                                               | 19
|ITEM
      9. THE OFFER AND LISTING                                                               | 20
|ITEM
      10. ADDITIONAL INFORMATION.                                                            | 21
|ITEM
      11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                         | 31
|ITEM
      12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                             | 31
|                                                                                                  |   
|PART
      II                                                                                     | 32
|ITEM
      13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 32
|ITEM
      14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS | 32
|ITEM
      15T. CONTROLS AND PROCEDURES                                                           | 32
|ITEM
      15. CONTROLS AND PROCEDURES                                                            | 32
|ITEM
      16A. AUDIT COMMITTEE FINANCIAL EXPERTS                                                 | 33
|ITEM
      16B. CODE OF ETHICS                                                                    | 33
|ITEM
      16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                            | 33
|ITEM
      16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                        | 33
|ITEM
      16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
      PURCHASERS      | 33
|ITEM
      16F CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                       | 34
|ITEM
      16G. CORPORATE GOVERNANCE                                                              | 34
|                                                                                                  |   
|PART
      III                                                                                    | 35
|ITEM
      17. FINANCIAL STATEMENTS                                                               | 35
|ITEM
      18. FINANCIAL STATEMENTS                                                               | 35
|ITEM
      19. EXHIBITS                                                                           | 35
|SIGNATURES                                                                                        | 36

3

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PART I

Introduction. Rainchief Energy Inc. (referred to as
Rainchief, the Company), is a British Columbia corporation incorporated on
December 28, 2000. The business endeavor will seek to identify for evaluation
undervalued energy assets worldwide for possible development and / or
acquisition.

Item 1. Identity of Directors, Senior Management and
Advisors.

The President of the Company is Bradley J. Moynes, and the
directors of the Company are Paul E. Heney, Robin Lecky and J. Robert Moynes,
all of Suite 900  925 West Georgia Street, Vancouver, BC, Canada, V6C 3L2. Mr.
Heney also serves as our Chairman and Chief Executive Officer.. See Item 6 for
further information.

The Companys registered independent auditors are Watson
Dauphinee & Masuch, Chartered Accountants, Suite 420, 1501 West Broadway,
Vancouver, British Columbia, Canada, V6J-4Z6. For further information, see Item
16C and the consolidated financial statements under Item 8.

Item 2. Offer Statistics and Expected Timetable. Not
applicable.

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Item 3. Key Information

**A.**           
**Selected Financial Data**.

The following selected information should be read in
conjunction with the Companys financial statements, and notes, filed with this
Form 20-F. This information, and all other financial information in this Form
20-F, is stated in Canadian dollars unless otherwise noted.

The financial information is presented on the basis of
generally accepted accounting principles in Canada. With respect to the
Companys consolidated financial statements, there are no material differences
from applying these principles compared to applying United States generally
accepted accounting principles. Please see note 16 of the consolidated financial
statements.

Selected Consolidated Financial and Operating Data.

Year Ended December 31,Operating Data
      2010
      2009
      2008
      2007
      2006$
      $
      $
      $
      $Sales
      -
      3,838
      14,767
      3,965
      5,105Gross profit, net cost of sales
      -
      597
      (28,584)
      1,000
      3,204(Net loss)
      (398,327)
      (480,025)
      (485,973)
      (524,780)
      (440,672)(Loss) per common share  basic & diluted
      (0.02)
      (0.19)*
      (0.27)*
      (0.30)*
      (0.32)*Number of shares outstanding
      18,560,292
      2,495,843*
      1,804,562*
      1,741,885*
      1,357,722*As at December 31,Balance Sheet Data
      2010
      2009
      2008
      2007
      2006$
      $
      $
      $
      $Current Assets
      204,815
      13,843
      34,205
      79,862
      104,245Current Liabilities
      129,940
      282,429
      315,430
      451,077
      269,931Total assets
      205,148
      14,284
      35,345
      112,313
      113,145Share Capital
      2,786,932
      2,241,445
      2,031,174
      1,567,600
      1,025,342Accumulated Shareholders deficit
      (3,280,089)
      (2,881,762)
      (2,401,737)
      (1,915,764)
      (1,390,984)Dividends per common share
      0.00
      0.00
      0.00
      0.00
      0.00


* Adjusted to reflect the consolidation of the Companys stock
on March 22, 2010 in the the ratio of 1 new common share for 10 old common
shares.

Exchange Rates.

The Companys consolidated financial statements are stated in
Canadian dollars. The Company realized losses on foreign exchange of $9,917 and
$30,773 for the years ended December 31, 2010 and 2008 respectively, and a gain
of $20,315 for the year ended December 31, 2009. These gains, and the loss, were
due to currency exchange rate fluctuations between the Canadian and United
States dollar.

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In this Form 20-F/A, references to dollars, $ or Cdn$ are
to Canadian dollars, unless otherwise specified. Reference to US$ refers to
United States dollars. Since June 1, 1970, the Government of Canada has
permitted a floating exchange rate to determine the value of the Canadian dollar
as compared to the United States dollar.

The Bank of Canada closing exchange rate on December 31, 2010
was Cdn$0.9946 per US$1.00. For the past five fiscal years ended December 31,
and for the period between January 1, 2010 and December 31, 2010, the following
exchange rates were in effect for Canadian dollars exchanged for United States
dollars, expressed in terms of United States dollars (based on the nominal
exchange rates provided by the Bank of Canada):

|Year Ended        | Average per US$1
|----------------- | ----------------
|December 31, 2006 | $ 1.13          
|December 31, 2007 | $ 1.07          
|December 31, 2008 | $ 1.07          
|December 31, 2009 | $ 1.14          
|December 31, 2010 | $ 1.03          

|Month ended        | per US$1
|------------------ | --------
|                   | High    
|January 31, 2010   | $ 1.05  
|February 28, 2010  | $ 1.06  
|March 31, 2010     | $ 1.03  
|April 30, 2010     | $ 1.01  
|May 31, 2010       | $ 1.05  
|June 30, 2010      | $ 1.04  
|July 31, 2010      | $ 1.05  
|August 31, 2010    | $ 1.05  
|September 30, 2010 | $ 1.04  
|October 31, 2010   | $ 1.02  
|November 30, 2010  | $ 1.02  
|December 31, 2010  | $ 1.01  

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**B.**            **Capitalization and Indebtedness.**

The following table sets forth our capitalization as of
December 31, 2010, using:

- 37,573,908 shares outstanding on an actual basis; and
- 34,777,242 shares outstanding on an as-adjusted basis to reflect changes
  through April 29, 2011:

December 31,
    
    
    As adjusted2010
    
    
    April 29, 2011(audited)
    
    
    (unaudited)$
    
    
    $Cash and cash equivalents
    
    171,237
    
    
    104,447Long-term obligations, less current portion
    
    -
    
    
    -Shareholders (deficiency) surplusShare capital, without par
      value (December 31, 2009 $2,241,445 )
    
    2,786,932
    
    
    2,945,606Share Subscription Advance
    
    196,263
    
    
    -Contributed Surplus
    
    372,102
    
    
    372,102Accumulated deficit
    
    (3,280,089
    )
    
    (3,242,753
    )Shareholders surplus
    
    75,208
    
    
    74,955Total Capitalization (long-term debt plus
      shareholders surplus)
    
    75,208
    
    
    74,955


On March 22, 2010, we completed a private placement of 50,000
units at a price of US$0.10 per unit, raising total gross proceeds of $5,384
(US$5,000). Each unit consisted of one common share and one share purchase
warrant exercisable into one common share at a price of US$1.00 per share until
March 22, 2011.

On May 19, 2010, we completed a private placement of 9,110,000
units at a price of US$0.02 per unit, raising gross proceeds of $191,505
(US$182,200). Each unit consisted of one common share and one share purchase
warrant exercisable into one common share at a price of US$0.02 per share until
March 30, 2015.

On October 5, 2010 we completed a private placement of 500,000
units at a price of US$0.04 per unit, raising gross proceeds of $20,276
(US$20,000). Each unit consisted of one common share and one share purchase
warrant exercisable into one common share at a price of US$0.04 per share until
October 15, 2015.

On November 22, 2010 we completed a private placement of
1,000,000 units at a price of US$0.02 per unit, raising gross proceeds of
$20,373 (US$200,000). Each unit consisted of one common share and one share
purchase warrant exercisable into one common share at a price of US$0.02 per
share until October 28, 2015. The subscription proceeds owing by a director of
the Company was received subsequently on April 21, 2011.

On May 19, 2010, we issued 15,000,000 common shares with a fair
value of $150,000 for settlement of debts totalling $97,710, and accordingly
recorded a loss of $52,290 on debt settlement. These debts were owed, on the
date of settlement, to arms length parties who acquired the debts from related
parties of the Company on March 2, 2010 for a nominal consideration of $10.

7

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On November 2, 2010, we paid $5,000 in cash and issued 130,000
common shares with a fair value of $2,600 for settlement of accounts payable
totalling $46,558 owing to arms length parties. We recorded a gain of $38,958
on debt settlement.

On January 24, 2011, we completed a private placement of
1,300,001 shares at a price of US$0.15 per share, raising gross proceeds of
$196,263 (US$195,000). The proceeds were received as of December 31, 2010 and
were recorded as share subscription advance in equity.

On March 14, 2011, we completed a private placement of 403,333
shares at a price of US$0.15 per share, raising gross proceeds of $59,747
(US$60,500).

On March 4, 2011, we entered into a Stock Surrender, Settlement
and Voluntary Pooling Agreement with the vendors on March 4, 2011, who agreed to
surrender 50% of the common shares received for the sale of Jaydoc and 50% of
the common shares received upon the exercise of share rights. A total of
4,500,000 common shares were returned to the treasury of the Company as final
settlement of deficiencies identified by us in certain representations arising
out of the Jaydoc acquisition. In connection to the settlement, the vendors
agreed to hold in escrow the remaining 4,500,000 common shares received from the
Jaydoc sale and the private placement. 12.5% of these shares will be released at
a 90-day interval with the first release on May 30, 2011.

You should read this information together with our consolidated
financial statements, including the related notes, and Item 5, Operating and
Financial Review and Prospects.

None of the capitalization referred to above is secured or
guaranteed. All amounts in respect of capitalization including long term debt
are unsecured and not guaranteed.

**C.**           
**Reasons for the Offer and Use of Proceeds**. Not applicable.

**D.**           
**Forward Looking-Statements and Risk Factors**.

Forward-looking Statements. In this document, we are
showing you a picture which is part historical (events which have happened) and
part predictive (events which we believe will happen). Except for the historical
information, all of the information in this document comprises "forward looking"
statements. Specifically, all statements (other than statements of historical
fact) regarding our financial position, business strategy and plans and
objectives are forward-looking statements. These forward-looking statements are
based on the beliefs of management, as well as assumptions made by, and
information currently available to management. These statements involve known
and unknown risks, including the risks resulting from economic and market
conditions, accurately forecasting operating and capital expenditures and
capital needs, successful anticipation of competition which may not yet be fully
developed, and other business conditions. Our use of the words "anticipate",
"believe", "estimate", "expect", "may", "will", "continue" and "intend", and
similar words or phrases, are intended to identify forward-looking statements
(also known as "cautionary statements"). These statements reflect our current
views with respect to future events. They are subject to the realization in fact
of assumptions, but what we now believe will occur may turn out to be inaccurate
or incomplete. We cannot assure you that our expectations will prove to be
correct. Actual operating results and financial performance may prove to be very
different from what we now predict or anticipate. The "risk factors" below
specifically address all of the factors now identifiable by us that may
influence future operating results and financial performance.

8

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Risk Factors.

Risks Related to the Business.

We have a history of operating losses and need additional
capital to implement our business plan. For the year ended December 31,
2010, we recorded a net loss of $398,327 from operations compared to a net loss
of $480,025 for the year ended December 31, 2009. The financial statements have
been prepared using Canadian generally accepted accounting principles applicable
to a going concern. However, as shown in note 1 to the consolidated financial
statements, our ability to continue operations is uncertain.

We continue to incur operating losses, and have a consolidated
deficit of $3,280,089 as at December 31, 2010. Operations for the year ended
December 31, 2010 have been funded primarily from the issuance of share capital
and the continued support of creditors. Historically, we have met working
capital needs primarily by selling equity to Canadian residents, and from loans
(including loans from relatives of principal shareholders).

We estimate that we will require at least $1,500,000 to begin a
series of alternative energy property acquisitions. A full implementation of our
business plan for these property acquisitions will be delayed until the
necessary capital is raised. See Item 5, Operating and Financial Review and
Prospects.

Our entry into the alternative energy property acquisition
business may not be successful and there are risks attendant on these
activities

The alternative energy property acquisition business is highly
competitive, and is populated with many companies, large and small, with the
capital and expertise to evaluate, purchase, and exploit producing and
non-producing opportunities. Even with capital and experience, industry risks
are significant. Environmental compliance is an increasingly complex and costly
obstacle to many new projects, and often times, and even if permits are
obtained, they may be sufficiently restrictive that a property cannot be
exploited to its full potential.

We may not be able to locate acquisition opportunities, or
finance those we can identify. We offer no assurance that our entry into this
business activity will be successful.

Risks Related to Our Stock.

If we have to raise capital by selling securities in the
future, your rights and the value of your investment in the Company could be
reduced. If we issue debt securities, the lenders would have a claim to our
assets that would be superior to the stockholder rights. Interest on the debt
would increase costs and negatively impact operating results. If we issue more
common stock or any preferred stock, your percentage ownership will decrease and
your stock may experience additional dilution, and the holders of preferred
stock (called preference securities in Canada) may have rights, preferences and
privileges which are superior to (more favorable) the rights of holders of the
common stock. It is likely the Company will sell securities in the future. The
terms of such future transactions presently are not determinable.

If the market for our common stock is illiquid in the
future, you could encounter difficulty if you try to sell your stock. Our
stock trades on the OTC.BB but it is not actively traded. If there is no
active trading market, you may not be able to resell your shares at any price,
if at all. It is possible that the trading market in the future will continue to
be "thin" or "illiquid," which could result in increased price volatility.
Prices may be influenced by investors' perceptions of us and general economic
conditions, as well as the market for energy generally. Until our financial
performance indicates substantial success in executing our business plan, it is unlikely that there will be coverage by stock
market analysts will be extended. Without such coverage, institutional investors
are not likely to buy the stock. Until such time, if ever, as such coverage by
analysts and wider market interest develops, the market may have a limited
capacity to absorb significant amounts of trading. As the stock is a penny
stock, there are additional constraints on the development of an active trading
market  see the next risk factor.

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The penny stock rule operates to limit the range of
customers to whom broker-dealers may sell our stock in the market. In
general, "penny stock" (as defined in the SECs rule 3a51-1 under the Securities
Exchange Act of 1934) includes securities of companies which are not listed on
the principal stock exchanges, or the Nasdaq National Market or the Nasdaq
Capital Market, and which have a bid price in the market of less than $5.00; and
companies with net tangible assets of less than $2 million ($5 million if the
issuer has been in continuous operation for less than three years), or which has
recorded revenues of less than $6 million in the last three years.

As "penny stock" our stock therefore is subject to the SECs
rule 15g-9, which imposes additional sales practice requirements on
broker-dealers which sell such securities to persons other than established
customers and "accredited investors" (generally, individuals with net worth in
excess of $1 million or annual incomes exceeding $200,000, or $300,000 together
with their spouses, or individuals who are the officers or directors of the
issuer of the securities). For transactions covered by rule 15g-9, 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. This rule may adversely affect the ability of broker-dealers to sell our
stock, and therefore may adversely affect our stockholders' ability to sell the
stock in the public market.

Your legal recourse as a United States investor could be
limited. The Company is incorporated under the laws of British Columbia.
Most of the assets now are located in Canada. Our directors and officers and the
audit firm are residents of Canada. As a result, if any of our shareholders were
to bring a lawsuit in the United States against the officers, directors or
experts in the United States, it may be difficult to effect service of legal
process on those people who reside in Canada, based on civil liability under the
Securities Act of 1933 or the Securities Exchange Act of 1934. In addition, we
have been advised that a judgment of a United States court based solely upon
civil liability under these laws would probably be enforceable in Canada, but
only if the U.S. court in which the judgment were obtained had a basis for
jurisdiction in the matter. We also have been advised that there is substantial
doubt whether an action could be brought successfully in Canada in the first
instance on the basis of liability predicated solely upon the United States'
securities laws.

Item 4. Information on the Company.

**A.**           
**History and Development of the Company.**

The Company is a British Columbia corporation (organized on
December 28, 2000, incorporation number BC 0619991, which is the incorporation
number reflecting transition to the new corporate statute (the British Columbia
Business Corporations Act)). The registered office is at Suite 1825  900 West
Georgia Street, Vancouver, British Columbia, V6C-3L2. We do not have an agent in
the United States.

The Companys legal name is Rainchief Energy Inc. and business
is carried on in this name in Canada at this time. On November 21, 2008 the
Company changed its corporate name from Black Diamond Brands Corporation to
Rainchief Energy Inc.

10

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**B.**            **Overview.**

Rainchief Energy Inc. (the Company) was incorporated on
  December 28, 2000 under the Company Act of the Province of British Columbia,
  Canada. We are engaged in the financing and development of photovoltaic solar
  energy projects in Europe. Prior to January 1, 2010, we had operations in oil
  and gas exploration, and wine and spirit distribution.

On December 7, 2010 we signed a Memorandum of Understanding (MOU)
  with Prometea Partners Ltd. for the joint development of a 1MW photovoltaic
  (PV) solar plant to be located on the rooftop of one of Italys leading
  industrial corporations. Prometea is a London-based corporation with its primary
  operations office and subsidiary operating companies based in Italy. It is anticipated
  that the initial project MOU will be expanded into a long-term agreement between
  the two companies for the joint development of as many as 60 MW of PV solar
  capacity in Italy over the next 24 month period. Prometea and its subsidiary
  operating companies are experienced turn-key facilitators of PV solar power
  projects, currently focused on development opportunities in Italy. The group
  brings together a highly professional organization with expertise in all the
  relevant aspects of renewable energy project development. Prometea has extensive
  experience in this specialized sector and combines technical and financial expertise
  with on-the-ground knowledge and regulatory awareness. ENERGYKA, ENERGYKA Engineering
  and ENERGYKA Electrosystems (Prometea Group) provides design and
  installation services, including EPC and subcontracting for ground or roof mounted
  PV systems. Prometea also provides RainChief with in-depth knowledge of the
  incentive framework and the approval process required for officially authorized
  PV projects in Italy. Additionally, the group has the professional background
  to identify ideal authorized rooftop or field sites for potential project development
  and to source and manage bankable engineering, procurement and construction
  (EPC) contractors with a proven record of PV project completion. Prometea has
  advised the Company that it has been involved in the development of over 175MW
  of PV solar projects in Italy.

The Companys Organization Structure.

On September 30, 2009, we disposed of two subsidiaries, Black
Diamond Importers Inc., a British Columbia, Canada, corporation and Liberty
Valley Wines, LLC., a Delaware, U.SA., limited liability company. On December
30, 2009, we disposed of our remaining subsidiary, Point Grey Energy Inc., an
Alberta, Canada corporation.

Effective December 22, 2010, we acquired all of the issued and
  outstanding common shares of Jaydoc Capital Corp (Jaydoc), a company
  incorporated under the Business Corporations Act of the Province of British
  Columbia, Canada. Jaydoc was acquired to facilitate our business venture in
  solar energy development. The assets of Jaydoc are its business plan and strategic
  business relationship with operational partners that offer experience and knowledge
  in the development, engineering and construction of solar energy projects in
  Italy and the European Union.

On December 18, 2010 we incorporated a wholly-owned subsidiary,
  Rainchief Renewable-1 S.R.L under the laws of Italy.

Commitments.

In April 2008, we entered into a royalty and licensing
agreement with an arms length party for the exclusive right to use copyrighted
photographs for a term of 3 years. In the first quarter of 2009, we were served
a Notice of Termination of the licensing agreement citing breach by us as a
result of our default on the royalty payment due on January 01, 2009. The total
amount of claim against us is US$50,625 which represents the guaranteed royalty
payments payable for the remaining term of the agreement. We are pursuing a
resolution to the dispute. As at December 31, 2009, we have recorded a provision
of $60,750 for this contingent liability. The outcome of the legal claim is uncertain, and management is of
the opinion that the claim has no merit and seeks to recover all costs.

11

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We own computer and office furniture and equipment with a
depreciated cost of $333 as at December 31, 2010. See note 5 to the consolidated
financial statements.

Item 5. Operating and Financial Review

For the years ended December 31, 2010, 2009, and 2008, we had
net losses of $398,397, $480,025 and $485,973, respectively.

Accounting, Audit and Legal expenses decreased by $7,201 from
$51,226 in 2009 to $44,025 in 2010 as additional legal fees relative to the
restructuring of the Company, the roll back of our stock and review of various
acquisition opportunities were not incurred in 2010. Accounting audit and legal
fees for the year ended December 31, 2009 decreased by $38,858 to $51,226 from
$90,084 for the year ended December 31, 2008, as a result of adjustments to
accruals for professional services made in 2008.

Expenditure on Advertising, Promotion and Website Development
costs increased by $14,684 from $1,816 in the year ended December 31, 2009 to
$16,500 during the year ended December 31, 2010 as a result of the redesign of
our website. Advertising, Promotion and Website Development costs for the year
ended December 31, 2009 decreased by $36,744 to $1,816 from $38,560 for the year
ended December 31, 2008 as a result of the discontinuance of our activities in
the wine and spirit business.

Consulting and Investor Relations Expense for the year ended
December 31, 2010 amounted to $148,050 a decrease of $26,141 as compared with
$174,191 for the year ended December 31, 2009 as we terminated certain investor
relation services and engaged the services of the former Chief Executive Officer
as a Consultant after his management contract with the Company was terminated by
mutual agreement in December 2009. In addition, we engaged a business
development consultant (who is also a shareholder of the Company). Consulting
and investor relations expenses increased by $71,029 to $174,191 for the year
ended December 31, 2009 from $103,162 for the year ended December 31, 2008, as a
result of additional business development and investor relations activity during
2009.

During the year ended December 31, 2010, we incurred
Development Costs of $3,480 in connection with our efforts to enter the solar
energy market in Italy (years ended December 31, 2009 and 2008 - $Nil)

Filing and Transfer Agents Fees for the year ended December 31,
2010 increased by $3,544 to $17,639 from $14,095 for the year ended December 31,
2009 as a result of continued corporate activity during the year. Filing and
Transfer Agents Fees for the year ended December 31, 2009 increased by $10,967
to $14,095 from $3,128 for the year ended December 31, 2008 as a result of
additional corporate activity related to the reorganization of the Company
during 2009.

Interest and Bank Charges for the year ended December 31, 2010
decreased by $3,095 to $283 from $3,378 for the year ended December 31, 2009 as
a result of a reduction in bank transaction volumes. Bank Charges for the year
ended December 31, 2009 were almost unchanged as compared with the expense
incurred for the year ended December 31, 2008.

No management fees were paid during the year ended December 31,
2010, following the termination of the management agreements with our President
and Vice-president during 2009. Management fees charged by our President and
Vice-President for the year ended December 31, 2009, reduced by US$15,000 to
US$105,000 as compared with the year ended December 31, 2008 as
a result of the early termination of the management contract of our
Vice-President. In addition, we paid management fees in the amount of $3,100 to
a company controlled by a director. Management fees for the year ended December
31, 2008 were fixed at US$120,000. Other changes in the amounts recorded in the
years ended December 31, 2009 and 2008 resulted from fluctuations in the
exchange rate between the US and Canadian Dollars.

12

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Office and Telephone expenses, and Office and Warehouse Rent
expense decreased by $9,011 and $6,586 respectively to $1,036 and $4,635 for the
year ended December 31, 2010 from $10,047 and $11,221 for the year ended
December 31, 2009 as a result of cost saving initiatives initiated by
management. Office and Telephone expenses, and Office and Warehouse Rent expense
remained substantially unchanged for the years ending December 31, 2009 and
2008.

Travel expenses for the year ended December 31, 2010 increased
by $6,150 to $9,177 as compared with $3,027 expended during the year ended
December 31, 2009 as a result of travel undertaken in connection with our entry
into the PV solar industry in Italy. Travel expenses for the year ended December
31, 2009 decreased by $10,904 to $3,027 from $13,931 during the year ended
December 31, 2008. These expenses were incurred in connection with our
involvement in the oil and gas sector.

We incurred a loss on foreign exchange of $9,917 for the year
ended December 31, 2010, as compared with a foreign exchange gain of $20,315 for
the year ended December 31, 2009, and a loss of $30,773 for the year ended
December 31, 2008. The losses in the years ending December 31, 2010 and 2008,
and the gain in the year ended December 31, 2009, respectively, resulted from
changes in the foreign currency exchange rate between the Canadian and US
Dollars.

During the year ended December 31, 2010, we realized a net loss
on the settlement of certain debts in the amounts of $13,332. During the year
ended December 31, 2008, we realized a net gain of $21,505 on the settlement of
certain debts.

On December 31, 2010, we wrote down the intangible asset
acquired as a result of the acquisition of Jaydoc, due to the lack of reliable
measurement of the future cash flows of the solar energy project and recorded a
charge of $124,246.

During the year ended December 31, 2009 we disposed of our
loss-making subsidiaries realizing a gain of $222,555.

During the year ended December 31, 2009 we issued warrants with
a fair value of $194,281 to consultants, officers and directors of the Company
for services provided to the Company.

We are the respondent in a lawsuit filed in the Supreme Court
of British Columbia. The Plaintiff seeks damages in the amount of $60,750,
claiming breach of a licensing agreement relating to our use of certain
photographs, the copyright to which is held by the plaintiff. We recorded a
contingent liability for this amount as at December 31, 2009. The outcome of
this legal claim is uncertain, and management is of the opinion that the claim
has no merit.

During the year ended December 31, 2009, we acquired a
five-year petroleum and natural gas lease in the Peace River area of Alberta,
Canada for a total consideration of $10,501. We subsequently disposed of its
interest in the property to an arms length party on December 30, 2009 for
settlement of the outstanding principal and interest totaling $7,783 of a
short-term promissory note and recorded a loss of $2,718 on the disposition of
the lease.

13

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During the year ended December 31, 2008, through a
then-subsidiary, Point Grey Energy Inc., we entered into a purchase agreement to
acquire a 10% working interest in certain oil and gas interests in a property
located in the Province of Alberta, Canada for a total purchase price of
$40,500. The vendor is involved in a legal action with the underlying owner and
operator of the property with respect to the vendors entitlement to a working
interest in the property. Our interest in the property was wholly derived from
the purchase agreement with the vendor, and in the event that the vendors
interest in the property should have been determined to be nil, our interest
would also have been determined to be nil. As such, we wrote off $40,499 in
acquisition costs due to the uncertainty over ownership of the working interest.

Financial position

For the year ended December 31, 2010 we had a working capital
surplus of $74,875 as compared with a working capital deficiency of $268,586 as
at December 31, 2009.

The increase in working capital during the year ended December
31, 2010 is due reductions in Accounts Payable and Accrued Liabilities of
$49,693, Amounts owed to Related Parties of $91,810; and a reduction in GST/HST
Recoverable of $639; and an increase in Subscriptions Receivable of $20,374.
Total cash balances increased by $182,223 from an overdraft of $10,986 as at
December 31, 2009 to cash on hand as at December 31, 2010 of $171,237.

Liquidity and Capital Resources

Cash provided from private placements in the year ended
December 31, 2010 was $475,490 (year ended December 31, 2009 - Cash provided
from private placements, promissory note, related parties and the disposal of
subsidiaries - $287,638). Changes in working capital accounts during the year
ended December 31, 2010 consumed $12,880 (year ended December 31, 2009 
provided $53,921).

The uses of cash during the year ended December 31, 2010 were
$254,741 to fund our continuing operations, and $25,646 to acquire Jaydoc. The
uses of cash during the year ended December 31, 2009 were $10,501 for the
purchase of the oil and gas assets and $352,325 to fund our continuing
operations. We realized cash proceeds in the amount of $10,001 and disposed of
$283 in cash as a result of the sale of our subsidiaries Black Diamond
Importers, Liberty Valley Wines and Point Grey Energy.

Subsequent events

Private Placements

On January 24, 2011 we completed a
  private placement of 1,300,001 shares at US$0.15 for total proceeds of $196,263
  (US$195,000). These securities are subject to resale restrictions in accordance
  with applicable securities legislation.

On March 14, 2011, we completed a
private placement of 403,333 shares at a price of US$0.15 per share, raising
gross proceeds of $59,747 (US$60,500).

Shares Surrendered and Returned to
Treasury

Subsequent to year-end, we entered into
  a Stock Surrender, Settlement and Voluntary Pooling Agreement with the vendors
  on March 4, 2011, who agreed to surrender 50% of the common shares received for
  the sale of Jaydoc and 50% of the common shares received upon the exercise of
  share rights.

14

---

A total of 4,500,000 common shares were
returned to the treasury of the Company as final settlement of deficiencies
identified by us in certain representations arising out of the Jaydoc
acquisition. The Company will record the book value of the shares surrendered in
the amount of $97,336 as a recovery in the statement of operations upon
settlement in 2011.

In connection to the settlement, the
vendors agreed to hold in escrow the remaining 4,500,000 common shares received
from the Jaydoc sale and the private placement. 12.5% of these shares will be
released at a 90-day interval with the first release on May 30, 2011.

Investor relations contract

On February 10, 2011, we entered into
  an agreement with another company for the provision of investor relations
  consulting services for a three month period commencing on the date of the
  agreement. For the services to be rendered by the Consultant under this
  Agreement,we shall pay to the consultant company a
  total fee in the amount of $15,000 and issue to the consultant company 200,000 stock options at a price to be
  mutually agreed upon.

**C.**            **Research and Development, Patents and Licenses, Etc.**Not applicable.

**D.**           
**Trend Information**.

Management is not aware of any trend, commitment, event or
uncertainty that is expected to have a material effect on our business,
financial condition or results of operations.

**E.**           
**Off-Balance Sheet Arrangements**. Not applicable.

**F.**           
**Contractual Obligations.**

On November 1, 2010, we entered into a consulting contract with
the President of the Company for general management and operational services for
a period of 2 years.

15

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Item 6. Directors, Senior Management and Employees

**A.**            **Directors, Senior Management, and Employees**.

The following table sets forth the name, positions held and
principal occupation of each of our directors, senior management and employees
upon whose work the Company is dependent. Information on such persons share
ownership is under Item 7.

| | Name and Positions Held                                              | Experience and Principal Business
      Activities              
| | -------------------------------------------------------------------- | ----------------------------------------------------------------
| |                                                                      |                                                                 
| | Paul Heney (51) Chairman, Chief Executive
      Officer and Director | Director of the
      Company since Nov 18, 2010.               
| |                                                                      |                                                                 
| | Bradley J. Moynes (41) President, and
      Director                 | President and
      Director of the Company since December 2000.
| |                                                                      |                                                                 
| | J. Robert Moynes (66) Director                                       | Director of the
      Company since July 2008.                  
| |                                                                      |                                                                 
| | Robin Lecky (65) Director                                            | Director of the
      Company since Nov 9, 2010                 

**B.**            **Compensation**.

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid to the executive
  officers of the Company in each of the years ended December 31, 2010, 2009 and
  2008. The table includes compensation paid for service by such persons to subsidiaries.
  All amounts are stated in US dollars.

|                   |      | Annual Compensation |       |       | Long Term Compensation
|------------------ | ---- | ------------------- | ----- | ----- | ----------------------
|                   |      |                     |       |       | Awards                
|(a)                | (b)  | (c)                 | (d)   | (e)   | (f)                   
|                   |      |                     |       |       | Restricted            
|Name and Current   |      |                     |       |       | Stock                 
|Principal Position | Year | Salary              | Bonus | Other | Awards                
|                   |      | (US$)               | (US$) | (US$) | (US$)                 
|Paul Heney         | 2010 | $ -                 | $ -   | $ -   | $ -                   
|Chairman and CEO   | 2009 | $ -                 | $ -   | $ -   | $ -                   
|                   | 2008 | $ -                 | $ -   | $ -   | $ -                   
|                   |      |                     |       |       |                       
|Bradley J. Moynes, | 2010 | $ -                 | $ -   | $ -   | $ -                   
|President and      | 2009 | $60,000             | $ -   | $ -   | $ -                   
|former CEO         | 2008 | $60,000             | $ -   | $ -   | $ -                   
|                   |      |                     |       |       |                       
|J. Robert Moynes,  | 2010 | $ -                 | $ -   | $ -   | $ -                   
|Vice-President and | 2009 | $45,000             | $ -   | $ -   | $ -                   
|interim CFO        | 2008 | $60,000             | $ -   | $ -   | $ -                   

16

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Executive Compensation Plans and Employment
Agreements.

Management Agreements.

On January 1, 2008, we signed ten-year Management Agreements
with Bradley J. Moynes and J. Robert Moynes. Under the Management Agreements, we
agreed to pay each officer US$60,000 annually.

On September 30, 2009, the management agreement with our
Vice-President was terminated by mutual agreement. On December 30, 2009 the
management agreement with our President was terminated by mutual agreement. Both
the President and Vice-President waived their entitlements to severance payments
as provided for in their management agreements.

Equity Compensation Plans.

Effective December 31, 2010, our Board of Directors adopted the
2010 Stock Option Incentive Plan (the Stock Option Plan). The purpose of the
Stock Option Plan is to enhance the long-term stockholder value of the Company
by offering opportunities to directors, officers, key employees and eligible
consultants of the Company to acquire and maintain stock ownership in the
Company, in order to give these persons the opportunity to participate in the
Company's growth and success, and to encourage them to remain in the service of
the Company. A maximum of 10% of the issued and outstanding shares of common
stock are available for issuance under the Stock Option Plan.

**C.**           
**Board Practices**.

Each director holds office until the next annual general
meeting of the Company unless his office is earlier vacated in accordance with
the Articles of the Company or the Canada Business Corporations Act.

During the most recently completed fiscal year, there are no
arrangements (standard or otherwise) under which directors of the Company were
compensated by the Company or its subsidiaries for services rendered in their
capacity as directors, nor were any amounts paid to the directors for committee
participation or special assignments, other than the granting of stock options.
There were no arrangements under which the directors would receive compensation
or benefits in the event of the termination of that office.

The Company does not have audit, compensation, or corporate
governance committees at the present time. The Company is listed for trading on
the OTC.BB as a reporting issuer under registration statement Form 20-F (Foreign
Private Issuer) and as such we believe that we are not required to have such
committees.

**D.**           
**Employees**.

The Company currently has two officers and no employees.
Employees will be added as required.

17

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**E.**           
**Share Ownership**.

Our directors and officers own the indicated shares of common
stock as at the date hereof; percentages are based on 34,777,242 shares
outstanding on April 29, 2011.

Percentage ofoutstanding atName
    No. of Shares
    April 29, 2011Paul Heney
    1,000,000
    2.88%Bradley James Moynes
    651,586
    1.87%J. Robert Moynes
    461,039
    1.33%Robin Lecky
    250,000
    0.72%


Item 7. Major Shareholders and Related Party
Transactions.

**A.**           
**Major Shareholders**

To our knowledge, no persons beneficially own, directly or
indirectly, or exercise control or direction over, common shares carrying more
than 5% of the voting rights attached to the 34,777,242 shares outstanding at
April 29, 2011.

The Company has approximately 200 shareholders of record at
April 29, 2011. The number of shareholders holding securities beneficially
through street name nominees, as reflected in the record position of Cede &
Co. and other intermediaries, is approximately 2.42% . None of the major
shareholders, if any, have different voting rights.

To the best of our knowledge, approximately 86.2% of the
Companys common shares are owned by residents of Canada or residents of
countries other than residents of the United States. The number of shareholders
holding securities beneficially through street name nominees, as reflected in
the record position of Cede & Co. and other intermediaries, who may be
residents of other countries, is approximately 2.42% . These assumptions are
based on our shareholder registry issued by Presidents Stock Transfer Company as
of April 29, 2011

To our knowledge, we are not owned or controlled directly or
indirectly by another corporation or by any foreign government, nor by any other
natural or legal person, nor are there any arrangements which may result in a
change of control of the Company. The directors of the Company own approximately
6.8%% as a result of the March 22, 2010 share consolidation and the subsequent
private placement and debt settlement issues. As a direct result of these
treasury orders and subsequent non-brokered private placements the percentage of
shares controlled by the directors no longer represents voting control of the
Company.

18

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**B.**           
**Related Party Transactions**.

We had the following amounts due from (to) related parties as
at December 31, 2010 and 2009:

| |                                                             |  | 2010 |  |  | 2009    |  
| | ----------------------------------------------------------- |  | ---- |  |  | ------- | -
| |                                                             |  | $    |  |  | $       |  
| |                                                             |  |      |  |  |         |  
| | Due (to) from Directors and Officers                        |  | -    |  |  | (81,896 | )
| | Due to Companies with Common Directors and Officers         |  | -    |  |  | (4,414  | )
| | Due to a Person Related to the Directors
      and Officers |  | -    |  |  | (5,500  | )
| |                                                             |  |      |  |  |         |  
| |                                                             |  | -    |  |  | (91,810 | )

Balances due from (to) related parties are unsecured,
non-interest bearing and have no specific terms of repayment.

We had the following transactions with related parties for the
years ended December 31, 2010, 2009 and 2008:

| |                                                                                                                                             |  | 2010    |  |  | 2009    |  |  | 2008    | 
| | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- |  |  | ------- |  |  | ------- | 
| |                                                                                                                                             |  | $       |  |  | $       |  |  | $       | 
| | Management fees charged by officers of the
      Company for management, administration, supervision and company
      development services |  | -       |  |  | 125,515 |  |  | 129,279 | 
| |                                                                                                                                             |  |         |  |  |         |  |  |         | 
| | Consulting fees charged by directors of the
      Company and companies controlled by them for management and administration
      services |  | 105,817 |  |  | -       |  |  | -       | 
| |                                                                                                                                             |  |         |  |  |         |  |  |         | 
| | Bad debt on amount owed by related parties                                                                                                  |  | 5,900   |  |  | 71,000  |  |  | -       | 
| |                                                                                                                                             |  |         |  |  |         |  |  |         | 
| |                                                                                                                                             |  | 111,717 |  |  | 196,515 |  |  | 129,279 | 

**C.**           
**Interest of Experts and Counsel**. None.

19

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Item 8. Financial Information. See the
consolidated financial statements under Item 18.

Item 9. The Offer and Listing.

**A.**           
**Offer and Listing Details**.

The Company's common shares are traded on the OTC.BB under
the symbol RCFEF; the shares are not listed on any exchange or traded on any
other medium. Trading commenced in the first quarter 2004 on the Pink Sheets and
then became a reporting issuer and was listed for trading on the OTC.BB during
the second quarter of 2007.

The following table sets forth the high and low closing prices
on the OTC Markets and the OTC.BB for the periods indicated, adjusted for the
consolidation of the Companys stock on March 22, 2010. See Item 10A below.

By Quarters in 2006, 2007, 2008, 2009 & 2010
      High 
        Sales Price US$
      Low Sales Price US$Fourth Quarter 2010
    $ 0.30
    $ 0.10Third Quarter 2010
    $ 0.22
    $ 0.13Second Quarter 2010
    $ 0.20
    $ 0.11First Quarter 2010
    $ 0.40
    $ 0.10Fourth Quarter 2009
    $ 1.00
    $ 0.20Third Quarter 2009
    $ 1.00
    $ 0.50Second Quarter 2009
    $ 1.20
    $ 0.50First Quarter 2009
    $ 1.20
    $ 0.30Fourth Quarter 2008
    $ 1.50
    $ 0.40Third Quarter 2008
    $ 2.50
    $ 0.90Second Quarter 2008
    $ 2.50
    $ 1.00First Quarter 2008
    $ 2.00
    $ 1.00Fourth Quarter 2007
    $ 1.40
    $ 1.00Third Quarter 2007
    $ 3.50
    $ 0.60Second Quarter 2007
    $ 3.80
    $ 0.70First Quarter 2007
    $ 3.00
    $ 2.60Fourth Quarter 2006
    $ 2.60
    $ 2.00Third Quarter 2006
    $ 2.50
    $ 1.60Second Quarter 2006
    $ 3.00
    $ 1.40First Quarter 2006
    $ 2.20
    $ 1.60


On
December 31, 2010, the closing price was US$0.22 per share.

B. Plan of Distribution. Not
applicable.

C. Markets. See "Offer and
Listing Details" above.

20

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D. Selling Shareholders. Not
applicable.

E. Dilution. Not applicable.

F. Expenses of the Issue. Not
applicable.

Item 10. Additional Information.

A.            
Share Capital.

****         **Authorized.**

Unlimited number of common shares without par value

Issued and Outstanding.

Number ofCommon
    
    
    AmountShares
    
    
    $Balance, December 31, 2008 (Pre-Share
      Consolidation)
    
    23,818,852
    
    
    2,031,174Shares Issued for Cash, Net of Share Issue
      Costs (i)
    
    4,020,000
    
    
    210,271Balance, December 31, 2009 (Pre-Share
      Consolidation)
    
    27,838,852
    
    
    2,241,445Share Consolidation (ii)
    
    (25,054,944
    )
    
    -Balance, March 22, 2010 (Post-Share
      Consolidation)
    
    2,783,908
    
    
    2,241,445Shares Issued for Cash, Net of Share Issue
      Costs (iii)
    
    10,660,000
    
    
    198,215Shares Issued for Debt (iv)
    
    15,130,000
    
    
    152,600Shares Issued for Exercise of Share Rights
      (Note 4)
    
    5,000,000
    
    
    101,386Fair Value of Share Rights Exercised (Note 4)
    
    -
    
    
    13,286Shares Issued for Acquisition of Subsidiary
      (Note 4)
    
    4,000,000
    
    
    80,000Balance, December 31, 2010 (Post-Share
      Consolidation)
    
    37,573,908
    
    
    2,786,932


On June 26, 2009 we completed a private
placement of 3,050,000 pre-share consolidation units at a price of US$0.05 per
unit, raising gross proceeds of $179,463 (US$152,500). Each unit consisted of
one common share and one share purchase warrant exercisable into one common
share at a price of US$0.10 per share expiring from March 27, 2010 to May 29,
2010.

21

---

On December 2, 2009 we completed a
private placement of 970,000 pre-share consolidation units at a price of US$0.05
per unit, raising gross proceeds of $51,747 (US$48,500). Each unit consisted of
one common share and one share purchase warrant exercisable into one common
share at a price of US$0.10 per share expiring from May 29, 2010 to August 5,
2010. We incurred share issue costs totalling $20,939.

On March 22, 2010, we consolidated our
share capital ration the basis of 1 new common share for 10 old common
shares.

On March 22, 2010, we completed a
private placement of 50,000 units at a price of US$0.10 per unit, raising total
gross proceeds of $5,384 (US$5,000). Each unit consisted of one common share and
one share purchase warrant exercisable into one common share at a price of
US$1.00 per share until March 22, 2011.

On May 19, 2010, we completed a private
placement of 9,110,000 units at a price of US$0.02 per unit, raising gross
proceeds of $191,505 (US$182,200). Each unit consisted of one common share and
one share purchase warrant exercisable into one common share at a price of
US$0.02 per share until March 30, 2015.

On October 5, 2010 we completed a
private placement of 500,000 units at a price of US$0.04 per unit, raising gross
proceeds of $20,276 (US$20,000). Each unit consisted of one common share and one
share purchase warrant exercisable into one common share at a price of US$0.04
per share until October 15, 2015.

On November 22, 2010 we completed a
private placement of 1,000,000 units at a price of US$0.02 per unit, raising
gross proceeds of $20,373 (US$200,000). Each unit consisted of one common share
and one share purchase warrant exercisable into one common share at a price of
US$0.02 per share until October 28, 2015. The subscription proceeds owing by a
director of the Company was received subsequently on April 21, 2011.

On May 19, 2010, we issued 15,000,000
common shares with a fair value of $150,000 for settlement of debts totalling
$97,710, and accordingly recorded a loss of $52,290 on debt settlement. These
debts were owed, on the date of settlement, to arms length parties who acquired
the debts from related parties of the Company on March 2, 2010 for a nominal
consideration of $10.

On November 2, 2010, we paid $5,000 in
cash and issued 130,000 common shares with a fair value of $2,600 for settlement
of accounts payable totalling $46,558 owing to arms length parties. We recorded
a gain of $38,958 on debt settlement.

22

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Share Purchase Warrants

We have the following warrants outstanding as at December 31,
2010 which expire on various dates between March 21, 2011 and October 28, 2015:

Weighted AverageNumber of
    
    
    Exercise PriceWarrants
    
    
    US$Balance, December 31, 2008 (Pre-Share
      Consolidation)
    
    2,800,000
    
    
    0.17IssuedPrivate Placements
      (Note 6(b)(i))
    
    4,020,000
    
    
    0.10Consulting and Investor Relations
      Services (i)
    
    1,700,000
    
    
    0.08Management Services
      (ii)
    
    1,500,000
    
    
    0.08Expired
    
    (2,300,000
    )
    
    0.19Balance, December 31, 2009 (Pre-Share
      Consolidation)
    
    7,720,000
    
    
    0.09Share Consolidation (Note 6(b)(ii))
    
    (6,948,000
    )
    
    -Balance, March 22, 2010 (Post-Share
      Consolidation)
    
    772,000
    
    
    0.92Issued  Private Placements (Note
      6(b)(iii))
    
    10,660,000
    
    
    0.03Expired
    
    (452,000
    )
    
    1.00Balance, December 31, 2010 (Post-Share
      Consolidation)
    
    10,980,000
    
    
    0.05


As a consequence of the consolidation of our share capital on
March 19, 2010, the outstanding warrants were also consolidated in the ratio of
1 new warrant for 10 warrants issued. As of April 29, 2011, we had 10,980,000
warrants outstanding at an average exercise price of US$0.05.

**B.**           
  **Memorandum and Articles of Association**.

The Company is registered under the Canada Business
Corporations Act (BC 0619991).

With respect to directors, under the by-laws, a director who is
a party to a material contract or proposed material contract with us, or is a
director or officer of or has a material interest in any person who is a party
to a material contract or proposed material contract with us, must disclose to
us in writing the nature and extent of such interest. An interested director can
vote on only a limited number of such matters (securing a loan from the director
to the Company, his remuneration, indemnity or insurance, or a contract with an
affiliate) provided the interest is disclosed. Otherwise, even with disclosure
of the interest, such a director cannot vote on a material contract or proposed
material contract. A contract approved by the board of directors is not voidable
because one or more directors has a conflict of interest, if the conflict is
disclosed and the interested director(s) do not vote on the matter. Subject to
the conflict of interest provisions summarized above, there is no restriction in
the by-laws on the power of the board of directors to have the Company borrow
money, issue debt obligations, or secure debt or other obligations of the
Company. The by-laws contain no provision for the retirement or non-retirement
of directors under an age limit requirement. A director is not required to hold
any shares of the Company in order to be a director.

23

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The Articles of the Company provide for the issuance of
unlimited number of shares of common stock, without par value. All holders of
common stock have equal voting rights, equal rights to dividends when and if
declared, and equal rights to share in assets upon liquidation of the
corporation. The common shares are not subject to any redemption or sinking fund
provisions. Directors serve from year to year, there being no provision for a
staggered board; cumulative voting for directors is not allowed. Between annual
general meetings, the existing board can appoint one or more additional
directors to serve until the next annual general meeting, but the number of
additional directors shall not at any time exceed one-third of the number of
directors who held office at the expiration of the last annual meeting. All
issued and outstanding shares are fully paid and non-assessable securities.

In order to change the rights of the holders of common stock,
the passing of a special resolution by such shareholders is required, being the
affirmative vote of not less than 2/3 of the votes cast in person or by proxy at
a duly called meeting of shareholders.

An annual meeting of shareholders must be called by the board
of directors not later than 15 months after the last annual meeting. The board
at any time may call a special meeting of shareholders. Notice of any meeting
must be sent not less than 21 and not more than 50 days before the meeting, to
every shareholder entitled to vote at the meeting. All shareholders entitled to
vote are entitled to be present at a shareholders meeting. A quorum is the
presence in person or by proxy of the holders of at least 5% of the issued and
outstanding shares of common stock.

Except under the Investment Canada Act, there are no
limitations specific to the rights of non-Canadians to hold or vote our shares
under the laws of Canada or our charter documents. The Investment Canada Act
("ICA") requires a non-Canadian making an investment which would result in the
acquisition of control of a Canadian business, the gross value of the assets of
which exceed certain threshold levels or the business activity of which is
related to Canada's cultural heritage or national identity, to either notify, or
file an application for review with, Investment Canada, the federal agency
created by the ICA. The notification procedure involves a brief statement of
information about the investment on a prescribed form which is required to be
filed with Investment Canada by the investor at any time up to 30 days after
implementation of the investment. It is intended that investments requiring only
notification will proceed without intervention by government unless the
investment is in a specific type of business related to the scope of the ICA. If
an investment is reviewable under the ICA, an application for review in the
prescribed form normally is required to be filed with Investment Canada before
the investment is made and it cannot be implemented until completion of review
and Investment Canada has determined that the investment is likely to be of net
benefit to Canada. If the agency is not so satisfied, the investment cannot be
implemented if not made, or if made, it must be unwound.

**C.**           
**Material Contracts**.

Except as otherwise disclosed in this Form 20-F, we have no
material contracts.

24

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**D.**            **Exchange Controls**.

There are no laws, decrees or regulations in Canada relating to
restrictions on the export or import of capital, or affecting the remittance of
interest, dividends or other payments to non-resident holders of our shares of
common stock.

**E.**           
**Taxation**.

Canada.

Canadian Federal Income Tax Information for United States
Residents.

The following is a discussion of material Canadian federal
income tax considerations generally applicable to holders of our common shares
who acquire such shares in this offering and who, for purposes of the Income Tax
Act (Canada) and the regulations thereunder, or the Canadian Tax Act:

- deal at arms length and are not affiliated with us;
- hold such shares as capital property;
- do not use or hold (and will not use or hold) and are not deemed to use or
  hold our common shares, in or in the course of carrying on business in Canada;
- have not been at any time residents of Canada; and
- are, at all relevant times, residents of the United States, or U.S.
  Residents, under the Canada- United States Income Tax Convention (1980), or
  the Convention.

TAX MATTERS ARE VERY COMPLICATED AND THE CANADIAN FEDERAL
INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES
WILL DEPEND UPON THE STOCKHOLDERS PARTICULAR SITUATION. THE SUMMARY OF MATERIAL
CANADIAN FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS INTENDED TO PROVIDE
ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR
DESCRIPTION OF ALL POTENTIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES.

THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF THE TAX
LAWS OF ANY PROVINCE OR TERRITORY WITHIN CANADA. ACCORDINGLY, HOLDERS AND
PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED TO CONSULT WITH THEIR
OWN TAX ADVISERS ABOUT THE TAX CONSEQUENCES TO THEM HAVING REGARD TO THEIR OWN
PARTICULAR CIRCUMSTANCES, INCLUDING ANY CONSEQUENCES OF PURCHASING, OWNING OR
DISPOSING OF OUR COMMON SHARES ARISING UNDER CANADIAN FEDERAL, CANADIAN
PROVINCIAL OR TERRITORIAL, U.S. FEDERAL, U.S. STATE OR LOCAL TAX LAWS OR TAX
LAWS OF JURISDICTIONS OUTSIDE THE UNITED STATES OR CANADA.

This summary is based on the current provisions of the Canadian
Income Tax Act, proposed amendments to the Canadian Income Tax Act publicly
announced by the Minister of Finance (Canada) prior to the date hereof (the
Proposed Amendments), and the provisions of the Convention as in effect on the
date hereof. No assurance can be given that the Proposed Amendments will be
entered into law in the manner proposed, or at all. No advance income tax ruling
has been requested or obtained from the Canada Revenue Agency to confirm the tax
consequences of any of the transactions described herein.

25

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This summary is not exhaustive of all possible Canadian federal
income tax consequences for U.S. Residents, and other than the Proposed
Amendments, does not take into account or anticipate any changes in law, whether
by legislative, administrative, governmental or judicial decision or action, nor
does it take into account Canadian provincial, U.S. or foreign tax
considerations which may differ significantly from those discussed herein. No
assurances can be given that subsequent changes in law or administrative policy
will not affect or modify the opinions expressed herein.

A U.S. Resident will not be subject to tax under the Canadian
Tax Act in respect of any capital gain on a disposition of our common shares
unless such shares constitute taxable Canadian property, as defined in the
Canadian Tax Act, of the U.S. Resident and the U.S. Resident is not eligible for
relief pursuant to the Convention. Our common shares will not constitute
taxable Canadian property if, at any time during the 60-month period
immediately preceding the disposition of the common shares, the U.S. Resident,
persons with whom the U.S. Resident did not deal at arms length, or the U.S.
Resident together with all such persons, did not own 25% or more of the issued
shares of any class or series of shares of our capital stock. In addition, the
Convention generally will exempt a U.S. Resident who would otherwise be liable
to pay Canadian income tax in respect of any capital gain realized by the U.S.
Resident on the disposition of our common shares, from such liability provided
that the value of our common shares is not derived principally from real
property situated in Canada. The Convention may not be available to a U.S.
Resident that is a U.S. LLC which is not subject to tax in the U.S.

Amounts in respect of our common shares paid or credited or
deemed to be paid or credited as, on account or in lieu of payment of, or in
satisfaction of, dividends to a U.S. Resident will generally be subject to
Canadian non-resident withholding tax at the rate of 25%. Currently, under the
Convention the rate of Canadian nonresident withholding tax will generally be
reduced to:

- 5% of the gross amount of dividends if the beneficial owner is a company
  that is resident in the U.S. and that owns at least 10% of our voting shares;
  or
- 15% of the gross amount of dividends if the beneficial owner is some other
  resident of the U.S.

United States Federal Income Tax Information for United
States Holders.

The following is a general discussion of material U.S. federal
income tax consequences of the ownership and disposition of our common shares by
U.S. Holders (as defined below). This discussion is based on the United States
Internal Revenue Code of 1986, as amended, Treasury regulations promulgated
thereunder, and judicial and administrative interpretations thereof, all as in
effect at the date hereof and all of which are subject to change, possibly with
retroactive effect. This discussion only addresses the tax consequences for U.S.
Holders that will hold their common shares as a capital asset and does not
address U.S. federal income tax consequences that may be relevant to particular
U.S. Holders in light of their individual circumstances or U.S. Holders that are
subject to special treatment under certain U.S. federal income tax laws, such
as:

- tax-exempt organizations and pension plans;
- persons subject to alternative minimum tax;
- banks and other financial institutions;
- insurance companies;
- partnerships and other pass-through entities (as determined for United States
    federal income tax purposes);

26

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- broker-dealers;
- persons who hold their common shares as a hedge or as part of a straddle,
  constructive sale, conversion transaction, and other risk management
  transaction; and
- persons who acquired their common shares through the exercise of employee
  stock options or otherwise as compensation.

As used herein, the term U.S. Holder means a beneficial owner
of our common shares that is:

- an individual citizen or resident of the United
  States;
- a corporation, a partnership or entity treated as a
      corporation or partnership for U.S. federal income tax purposes, that is
      created or organized in or under the laws of the United States or any
  political subdivision thereof;
- an estate the income of which is subject to U.S. federal
  income taxation regardless of its source; and
- a trust if both:
    a United States court is able to exercise primary
      supervision over the administration of the trust; and
      one or more United States persons have the authority to
      control all substantial decisions of the trust.
- a United States court is able to exercise primary
      supervision over the administration of the trust; and
- one or more United States persons have the authority to
      control all substantial decisions of the trust.

TAX MATTERS ARE VERY COMPLICATED AND THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR
COMMON SHARES WILL DEPEND UPON THE STOCKHOLDERS PARTICULAR SITUATION. THE
SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES SET FORTH
BELOW IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A
COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.

NOTE THAT THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF
THE TAX LAWS OF ANY STATE OR LOCAL GOVERNMENT WITHIN THE UNITED STATES.
ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED
TO CONSULT THEIR TAX ADVISORS ABOUT THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN
TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON
SHARES.

Ownership of Shares.

The gross amount of any distribution received by a U.S. Holder
with respect to our common shares generally will be included in the U.S.
Holders gross income as a dividend to the extent attributable to our current
and accumulated earnings and profits (as determined under U.S. federal income
tax principles). To the extent a distribution received by a U.S. Holder is not a
dividend because it exceeds the U.S. Holders pro rata share of our current and
accumulated earnings and profits, it will be treated first as a tax-free return
of capital and reduce (but not below zero) the adjusted tax basis of the U.S.
Holders shares. To the extent the distribution exceeds the adjusted tax basis
of the U.S. Holders shares, the remainder will be taxed as capital gain (the
taxation of capital gain is discussed under the heading Sale of Shares
below).

27

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For taxable years beginning before January 1, 2009, dividends
received by non-corporate U.S. Holders from a qualified foreign corporation are
taxed at the same preferential rates that apply to long-term capital gains. A
foreign corporation is a qualified foreign corporation if it is eligible for
the benefits of a comprehensive income tax treaty with the United States (the
income tax treaty between Canada and the United States is such a treaty) or the
shares with respect to which such dividend is paid is readily tradable on an
established securities market in the United States (such as the Nasdaq Capital
Market). Notwithstanding satisfaction of one or both of these conditions, a
foreign corporation is not a qualified foreign corporation if it is a passive
foreign investment company (PFIC) for the taxable year of the corporation in
which the dividend is paid or the preceding taxable year. (Whether a foreign
corporation is a PFIC is discussed below under the heading Passive Foreign
Investment Companies). A foreign corporation that is a PFIC for any taxable
year within a U.S. persons holding period generally is treated as a PFIC for
all subsequent years in the U.S. persons holding period. Although we have not
been, are not now, and do not expect to be a PFIC, and we dont expect to pay
dividends, you should be aware of the following matters in the event that we do
become a PFIC and do pay dividends.

If we were to become a PFIC, then U.S. Holders who acquire our
common shares may be treated as holding shares of a PFIC throughout their
holding period for the purpose of determining whether dividends received from us
are dividends from a qualified foreign corporation. As a consequence, dividends
received by U.S. Holders may not be eligible for taxation at the preferential
rates applicable to long-term capital gains.

If a distribution is paid in Canadian dollars, the U.S. dollar
value of such distribution on the date of receipt is used to determine the
amount of the distribution received by a U.S. Holder. A U.S. Holder who
continues to hold such Canadian dollars after the date on which they are
received, may recognize gain or loss upon their disposition due to exchange rate
fluctuations. Generally such gains and losses will be ordinary income or loss
from U.S. sources.

U.S. Holders may deduct Canadian tax withheld from
distributions they receive for the purpose of computing their U.S. federal
taxable income (or alternatively a credit may be claimed against the U.S.
Holders U.S. federal income tax liability as discussed below under the heading
Foreign Tax Credit). Corporate U.S. Holders generally will not be allowed a
dividend received deduction with respect to dividends they receive from us.

Foreign Tax Credit.

Generally, the dividend portion of a distribution received by a
U.S. Holder will be treated as income in the passive income category for foreign
tax credit purposes. Subject to a number of limitations, a U.S. Holder may elect
to claim a credit against its U.S. federal income tax liability (in lieu of a
deduction) for Canadian withholding tax deducted from its distributions. The
credit may be claimed only against U.S. federal income tax attributable to a
U.S. Holders passive income that is from foreign sources.

If we were to become a qualified foreign corporation with
respect to a non-corporate U.S. Holder, dividends received by such U.S. Holder
will qualify for taxation at the same preferential rates that apply to long-term
capital gains. In such case, the dividend amount that would otherwise be from
foreign sources is reduce by multiplying the dividend amount by a fraction, the
numerator of which is the U.S. Holders preferential capital gains tax rate and
the denominator of which is the U.S. Holders ordinary income tax rate. The
effect is to reduce the dividend amount from foreign sources, thereby reducing
the U.S. federal income tax attributable to foreign source income against which
the credit may be claimed. Canadian withholding taxes that cannot be claimed as
a credit in the year paid may be carried back to the preceding year and then
forward 10 years and claimed as a credit in those years, subject to the same
limitations referred to above.

28

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The rules relating to the determination of the foreign tax
credit are very complex. U.S. Holders and prospective U.S. Holders should
consult their own tax advisors to determine whether and to what extent they
would be entitled to claim a foreign tax credit.

Sale of Shares.

Subject to the discussion of the passive foreign investment
company rules below, a U.S. Holder generally will recognize capital gain or
loss upon the sale of our shares equal to the difference between: (a) the amount
of cash plus the fair market value of any property received; and (b) the U.S.
Holders adjusted tax basis in such shares. This gain or loss generally will be
capital gain or loss from U.S. sources, and will be long-term capital gain or
loss if the U.S. Holder held its shares for more than 12 months. Generally, the
net long-term capital gain of a non-corporate U.S. Holder from the sale of
shares is subject to taxation at a top marginal rate of 15%. A Capital gain that
is not long-term capital gain is taxed at ordinary income rates. The
deductibility of capital losses is subject to certain limitations.

Passive Foreign Investment
Companies.

We will be a PFIC if, in any taxable year either: (a) 75% or
more of our gross income consists of passive income; or (b) 50% or more of the
value of our assets is attributable to assets that produce, or are held for the
production of, passive income. Subject to certain limited exceptions, if we meet
the gross income test or the asset test for a particular taxable year, our
shares held by a U.S. Holder in that year will be treated as shares of a PFIC
for that year and all subsequent years in the U.S. Holders holding period, even
if we fail to meet either test in a subsequent year.

If we were a PFIC in the future, gain realized by a U.S. Holder
from the sale of PFIC Shares and certain dividends received on such shares would
be subject to tax under the excess distribution regime, unless the U.S. Holder
made one of the elections discussed below. Under the excess distribution regime,
federal income tax on a U.S. Holders gain from the sale of PFIC Shares would be
calculated by allocating the gain ratably to each day the U.S. Holder held its
shares. Gain allocated to years preceding the first year in which we were a PFIC
in the U.S. Holders holding period, if any, and gain allocated to the year of
disposition would be treated as gain arising in the year of disposition and
taxed as ordinary income. Gain allocated to all other years would be taxed at
the highest tax rate in effect for each of those years. Interest for the late
payment of tax would be calculated and added to the tax due for each of the PFIC
Years, as if the tax was due and payable with the tax return filed for that
year. A distribution that exceeds 125% of the average distributions received on
PFIC Shares by a U.S. Holder during the 3 preceding taxable years (or, if
shorter, the portion of the U.S. Holders holding period before the taxable
year) would be taxed in a similar manner.

A U.S. Holder may avoid taxation under the excess distribution
regime by making a qualified electing fund (QEF) election. For each year that
we would meet the PFIC gross income test or asset test, an electing U.S. Holder
would be required to include in gross income, its pro rata share of our net
ordinary income and net capital gains, if any. The U.S. Holders adjusted tax
basis in our shares would be increased by the amount of such income inclusions.
An actual distribution to the U.S. Holder out of such income generally would not
be treated as a dividend and would decrease the U.S. Holders adjusted tax basis
in our shares. Gain realized from the sale of our shares covered by a QEF
election would be taxed as a capital gain. U.S. Holders will be eligible to make
QEF elections, only if we agree to provide to the U.S. Holders, which we do, the
information they will need to comply with the QEF rules. Generally, a QEF
election should be made by the due date of the U.S. Holders tax return for the first taxable year in
which the U.S. Holder held our shares that includes the close of our taxable
year for which we met the PFIC gross income test or asset test. A QEF election
is made on IRS Form 8621.

29

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A U.S. Holder may also avoid taxation under the excess
distribution regime by timely making a mark-to-market election. An electing U.S.
Holder would include in gross income the increase in the value of its PFIC
Shares during each of its taxable years and deduct from gross income the
decrease in the value of its PFIC Shares during each of its taxable years.
Amounts included in gross income or deducted from gross income by an electing
U.S. Holder are treated as ordinary income and ordinary deductions from U.S.
sources. Deductions for any year are limited to the amount by which the income
inclusions of prior years exceed the income deductions of prior years. Gain from
the sale of PFIC Shares covered by an election is treated as ordinary income
from U.S. sources while a loss is treated as an ordinary deduction from U.S.
sources only to the extent of prior income inclusions. Losses in excess of such
prior income inclusions are treated as capital losses from U.S. sources. A
mark-to-market election is timely if it is made by the due date of the U.S.
Holders tax return for the first taxable year in which the U.S. Holder held our
shares that includes the close of our taxable year for which we met the PFIC
gross income test or asset test. A mark-to-market election is also made on IRS
Form 8621.

As noted above, a PFIC is not a qualified foreign corporation
and hence dividends received from a PFIC are not eligible for taxation at
preferential long-term capital gain tax rates. Similarly, ordinary income
included in the gross income of a U.S. Holder who has made a QEF election or a
market-to-market election, and dividends received from corporations subject to
such election, are not eligible for taxation at preferential long-term capital
gain rates. The PFIC rules are extremely complex and could, if they apply, have
significant, adverse effects on the taxation of dividends received and gains
realized by a U.S. Holder. Accordingly, prospective U.S. Holders are strongly
urged to consult their tax adviser concerning the potential application of these
rules to their particular circumstances.

Controlled Foreign Corporation.

Special rules apply to certain U.S. Holders that own stock in a
foreign corporation that is classified as a controlled foreign corporation
(CFC). We do not expect to be classified as a CFC. However, future ownership
changes could cause us to become a CFC. Prospective U.S. Holders are urged to
consult their tax advisor concerning the potential application of the CFC rules
to their particular circumstances.

Information Reporting and Backup Withholding.

United States information reporting and backup withholding
requirements may apply with respect to distributions to U.S. Holders, or the
payment of proceeds from the sale of shares, unless the U.S. Holder: (a) is an
exempt recipient (including a corporation); (b) complies with certain
requirements, including applicable certification requirements; or (c) is
described in certain other categories of persons. The backup withholding tax
rate is currently 28%. Any amounts withheld from a payment to a U.S. Holder
under the backup withholding rules may be credited against any U.S. federal
income tax liability of the U.S. Holder and may entitle the U.S. Holder to a
refund.

**F.**           
**Dividends and Paying Agents**. Not applicable.

**G.**           
**Statements by Experts**. Not applicable.

**H.**           
  **Documents on Display**. Not applicable.

30

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**I.**       
    **Subsidiary Information**. See the notes to the
financial statements.

Item 11. Quantitative and Qualitative Disclosures About
Market Risk. Not applicable.

Item 12. Description of Securities Other Than Equity
Securities. Not applicable

31

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PART II

Item 13. Defaults, Dividend Arrearages and
Delinquencies. Not applicable.

Item 14. Material Modifications to the Rights of Security
Holders and Use of Proceeds. Not applicable.

Item 15T. Controls and Procedures.

Item 15. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and participation of the Chief Executive
Officer, the Interim Chief Financial Officer, has evaluated the effectiveness of
our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act) as of the end of the period covered by this
report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that, as of December 31, 2010, these disclosure
controls and procedures were not effective to ensure that all information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is: (i) recorded, processed, summarized and reported, within the
time periods specified in the Commissions rule and forms; and (ii) accumulated
and communicated to our management, including our Chief Executive Officer and
Interim Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure, primarily due to the Companys minimal financial
staff which prevents us from segregating duties, which management believes is a
material weakness in our internal controls and procedures. We intend to address
such weakness and work with outside advisors to improve our controls and
procedures as and when the circumstances of the Company permit this.

Managements Annual Report on Internal Control Over
Financial Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial
reporting is a process designed by, or under the supervision of, our Chief
Executive Officer and Chief Financial Officer, and effected by our Board,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.

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 the assets of the Company; (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 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 our financial
statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Forward looking
statements regarding the effectiveness of internal controls during future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies and
procedures may deteriorate.

Management completed an assessment of the effectiveness of the
Companys internal control over financial reporting (ICFR) as of December 31,
2009, using the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) framework as contemplated by Rule 13a-15(c). Based on this assessment,
the Company concluded that it did not have effective internal
controls over financial reporting as of December 31, 2009.

32

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The Companys assessment of the effectiveness of the ICFR as at
December 31, 2010 identified certain material weaknesses as of that date:

1.      Weakness: It is not possible to
adequately segregate incompatible duties among the officers of the Company,
because the Company has only two officers and one accounting consultant.
Remediation: Appoint a new Chief Financial Officer, in addition to the
current officers, to formally segregate the duties of maintaining accounting
records and preparing financial statements, from the executive duties of the
current officers. J. Robert Moynes, who has served as Interim Chief Financial
Officer from July 2009, will cease to serve in that position upon appointment of
a new individual as Chief Financial Officer.

2.      Weakness: The Company is small, with
only two officers, thereby creating a risk of override of existing controls by
management. Remediation: Require the new Chief Financial Officers
approval of all expenditures and other dispositions of assets.

3.      Weakness: The Company maintains limited
audit evidence in documentary form which is used to test the operating
effectiveness of control activities. Remediation: Improve the
documentation of expenditures and receipts, under the joint supervision of the
new Chief Financial Officer and the Chief Executive Officer, to ensure received
goods and third-party services conform to contract terms.

The Company appointed a third director on June 9, 2009. This
director is independent as that term is defined by Rule 4200 (a) (15) of the
Marketplace Rules of NASDAQ and Canadian National Instrument 52-110, and will
not be involved in the day-to-day running of the Company. In addition the
Company appointed a fourth director on November 22, 2010. However, these
appointments did not result in the remediation of the weaknesses described
above. The Company intends to appoint additional levels of executive management
and personnel to remediate the weaknesses, in the specific manners described in
paragraphs 1 through 3 above, as and when the Company has sufficient financial
resources to effect the remediations.

This Annual Report does not include an attestation report of
the Companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by the
Companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
managements report in this Annual Report.

Changes in Internal Control over Financial Reporting

As disclosed above, the Company completed its assessment of its
ICFR in place for the year ended December 31, 2010, using the COSO framework.
There were no changes in ICFR during the 2010 fiscal year that have materially
affected, or are reasonably likely to materially affect, the Companys ICFR.

Item 16A. Audit Committee Financial Experts. Not
applicable.

Item 16B. Code of Ethics. Not applicable.

Item 16C. Principal Accountant Fees and Services. Not
applicable.

Item 16D. Exemptions from the Listing Standards for Audit
Committees. Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and
Affiliated Purchasers. None.

33

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Item 16FChange in Registrants Certifying
Accountant. Not applicable.

Item 16G. Corporate Governance . Not applicable.

34

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PART III

Item 17. Financial Statements. Not applicable.

Item 18. Financial Statements

See the consolidated financial statements of the Company, the
notes thereto, and the auditors reports thereon, which are filed as Exhibit
99.1 with this Form 20-F. All of the financial information is presented in
accordance with Canadian GAAP; however, as stated in the notes, there are
material differences between Canadian GAAP and United States GAAP as applied to
our financial statements.

Item 19. Exhibits.

|Exhibit No. | Description of Exhibit                                                                  |  
|----------- | --------------------------------------------------------------------------------------- | -
|            |                                                                                         |  
|3.(i)       | Articles of Incorporation (Notice
      of Articles and Transition Application)         |  
|            |                                                                                         |  
|3.(ii)      | By-laws (Schedule A)                                                                  |  
|            |                                                                                         |  
|4. (1)      | Management Agreement of January
      1, 2008 (Bradley James Moynes)                    |  
|            |                                                                                         |  
|4. (2)      | Management Agreement of January
      1, 2008 (James Robert Moynes)                     |  
|            |                                                                                         |  
|4. (3)      | Certifications
      (Paul E. Heney)                                                    | *
|            |                                                                                         |  
|4. (4)      | Certifications
      (Brad J. Moynes)                                                   | *
|            |                                                                                         |  
|4. (5a)     | Certification
      Pursuant 18 USC Section 1350 (Paul E. Heney)                        | *
|            |                                                                                         |  
|4. (5b)     | Certification
      Pursuant 18 USC Section 1350 (Brad J. Moynes)                       | *
|            |                                                                                         |  
|4. (6)      | Form of Warrant dated May 23, 2007                                                      |  
|            |                                                                                         |  
|23. (1)     | Consent
      of Independent Auditors                                                   | *
|            |                                                                                         |  
|99. (1)     | Consolidated
      Financial Statements for the years ended December 31, 2010 and 2009. | *

*         
 Filed herewith

35

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SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this Annual Report.

|                  | Rainchief Energy Inc.               
|----------------- | ------------------------------------
|                  |                                     
|Date: May 6, 2011 | /s/ Paul E. Heney                   
|                  | Paul E. Heney,                      
|                  | Chairman and Chief Executive Officer
|                  |                                     
|Date: May 6, 2011 | /s/ Bradley J. Moynes               
|                  | Bradley J. Moynes,                  
|                  | President                           

36

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