---







Rainchief Energy Inc.

December 31, 2010(Expressed in
Canadian Dollars)

Consolidated Financial Statements



| |                                                           | Page
| | --------------------------------------------------------- | ----
| |                                                           |     
| | Managements
      Responsibility for Financial Reporting | 2   
| |                                                           |     
| | Independent Auditors
      Report                        | 3   
| |                                                           |     
| | Consolidated Balance
      Sheets                         | 4   
| |                                                           |     
| | Consolidated Statements
      of Operations and Deficit   | 5   
| |                                                           |     
| | Consolidated Statements
      of Comprehensive Loss       | 6   
| |                                                           |     
| | Consolidated Statements
      of Cash Flows               | 7   
| |                                                           |     
| | Notes to the Consolidated
      Financial Statements      | 8   

---

Managements
      Responsibility for Financial Reporting


These consolidated financial statements have been prepared by
and are the responsibility of the management of the Company. The consolidated
financial statements have been prepared in accordance with accounting principles
generally accepted in Canada, using managements best estimates and judgments
based on currently available information. When alternative accounting methods
exist, management has chosen those it considers most appropriate in the
circumstances.

The Company maintains an appropriate system of internal
controls to provide reasonable assurance that financial information is accurate
and reliable and that the Companys assets are appropriately accounted for and
adequately safeguarded.

The Companys independent auditors, Watson Dauphinee &
Masuch, Chartered Accountants, were appointed by the shareholders to conduct an
audit in accordance with generally accepted auditing standards in Canada and the
Public Company Accounting Oversight Board (United States), and their report
follows.



Paul E.
HeneyPaul
E. Heney Director



Bradley J.
MoynesBradley J. Moynes Director

2

---

Independent
      Auditors Report


To the Shareholders of: RAINCHIEF ENERGY INC.

We have audited the accompanying consolidated financial
statements of Rainchief Energy Inc. and its subsidiaries, which comprise the
consolidated balance sheets as at December 31, 2010 and 2009 and the
consolidated statements of operations, deficit, comprehensive loss, and cash
flows for the years then ended, and a summary of significant accounting policies
and other explanatory information.

Management's Responsibility for the Consolidated Financial
Statements

Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
Canadian generally accepted accounting principles and for such internal control
as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to
fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. We conducted our audit in
accordance with Canadian generally accepted auditing standards and standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.

An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the
consolidated financial statements.

We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Rainchief Energy
Inc. and its subsidiaries as at December 31, 2010 and 2009, and their financial
performance and cash flows for the years then ended in accordance with Canadian
generally accepted accounting principles.

Emphasis of Matter  Going Concern

In forming our opinion, which is not qualified, we have
considered the adequacy of the disclosures made in Note 1 to the consolidated
financial statements concerning the ability of Rainchief Energy Inc. and its
subsidiaries to continue as a going concern. The company incurred a net loss of
$398,327 during the year ended December 31, 2010, and as of that date, had an
accumulated deficit of $3,280,089 since inception. These conditions, along with
the other matters explained in Note 1 to the consolidated financial statements,
indicate the existence of a material uncertainty which may cast significant
doubt about the companys ability to continue as a going concern. The financial
statements do not include the adjustments that would result if Rainchief Energy
Inc. and its subsidiaries were unable to continue as a going concern.

Watson Dauphinee & MasuchChartered
Accountants

Vancouver, B.C., Canada 
  April 29, 2011

3

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|RAINCHIEF ENERGY INC.                
|-------------------------------------
|                                     
|Consolidated Balance Sheets          
|As at December 31, 2010 and 2009     
|(Expressed in
      Canadian Dollars)

|                                                    |  | 2010       |   |  | 2009       |  
|--------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                    |  | $          |   |  | $          |  
|ASSETS                                              |  |            |   |  |            |  
|                                                    |  |            |   |  |            |  
|CURRENT                                             |  |            |   |  |            |  
|Cash                                                |  | 171,237    |   |  | -          |  
|HST/GST Recoverable                                 |  | 13,204     |   |  | 13,843     |  
|Subscription Receivable (Note 6(b)(iii))            |  | 20,374     |   |  | -          |  
|                                                    |  |            |   |  |            |  
|                                                    |  | 204,815    |   |  | 13,843     |  
|                                                    |  |            |   |  |            |  
|Property and Equipment (Note 5)                     |  | 333        |   |  | 441        |  
|                                                    |  |            |   |  |            |  
|                                                    |  | 205,148    |   |  | 14,284     |  
|                                                    |  |            |   |  |            |  
|LIABILITIES                                         |  |            |   |  |            |  
|                                                    |  |            |   |  |            |  
|CURRENT                                             |  |            |   |  |            |  
|Bank Indebtedness                                   |  | -          |   |  | 10,986     |  
|Accounts Payable and Accrued Liabilities            |  | 129,940    |   |  | 179,633    |  
|Due to Related Parties (Note 9(a))                  |  | -          |   |  | 91,810     |  
|                                                    |  |            |   |  |            |  
|                                                    |  | 129,940    |   |  | 282,429    |  
|                                                    |  |            |   |  |            |  
|SHAREHOLDERS' EQUITY                                |  |            |   |  |            |  
|                                                    |  |            |   |  |            |  
|Share Capital (Note 6(b))                           |  | 2,786,932  |   |  | 2,241,445  |  
|Share Subscription Advance (Note 13(a))             |  | 196,263    |   |  | 5,384      |  
|Contributed Surplus (Note 6(e))                     |  | 372,102    |   |  | 366,788    |  
|Accumulated Other Comprehensive Income              |  | -          |   |  | -          |  
|Deficit                                             |  | (3,280,089 | ) |  | (2,881,762 | )
|                                                    |  |            |   |  |            |  
|                                                    |  | 75,208     |   |  | (268,145   | )
|                                                    |  |            |   |  |            |  
|                                                    |  | 205,148    |   |  | 14,284     |  
|                                                    |  |            |   |  |            |  
|Nature and Continuance of Operations (Note
      1) |  |            |   |  |            |  
|Segmented Information (Note 11)                     |  |            |   |  |            |  
|Subsequent Events (Note 13)                         |  |            |   |  |            |  

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



Approved on Behalf of the Board:

|Paul E
      Heney |  | Bradley J. Moynes
|-------------------- |  | -------------------
|                     |  |                    
|Paul E. Heney        |  | Bradley J. Moynes  
|Director             |  | Director           

4

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|RAINCHIEF ENERGY INC.                                  
|-------------------------------------------------------
|                                                       
|Consolidated Statements of Operations and
      Deficit
|As at December 31, 2010, 2009 and 2008                 
|(Expressed in
      Canadian Dollars)                  

|                                                                              |  | 2010       |   |  | 2009       |   |  | 2008       |  
|----------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                                              |  | $          |   |  | $          |   |  | $          |  
|                                                                              |  |            |   |  |            |   |  |            |  
|SALES                                                                         |  | -          |   |  | 3,838      |   |  | 14,767     |  
|COST OF SALES                                                                 |  | -          |   |  | 3,241      |   |  | 43,351     |  
|                                                                              |  |            |   |  |            |   |  |            |  
|GROSS PROFIT (LOSS)                                                           |  | -          |   |  | 597        |   |  | (28,584    | )
|                                                                              |  |            |   |  |            |   |  |            |  
|EXPENSES                                                                      |  |            |   |  |            |   |  |            |  
|Accounting, Audit and Legal                                                   |  | 44,025     |   |  | 51,226     |   |  | 90,084     |  
|Advertising, Promotion and Website Development                                |  | 16,500     |   |  | 1,816      |   |  | 38,560     |  
|Amortization                                                                  |  | 107        |   |  | 227        |   |  | 519        |  
|Bad Debt (Note 9(a))                                                          |  | 5,900      |   |  | 71,000     |   |  | -          |  
|Consulting and Investor Relations (Note
      9(b))                           |  | 148,050    |   |  | 174,191    |   |  | 103,162    |  
|Development Costs                                                             |  | 3,480      |   |  | -          |   |  | -          |  
|Filing and Transfer Agent Fees                                                |  | 17,639     |   |  | 14,095     |   |  | 3,128      |  
|Interest and Bank Charges                                                     |  | 283        |   |  | 3,378      |   |  | 2,905      |  
|Management Fees (Note 9(b))                                                   |  | -          |   |  | 125,515    |   |  | 129,279    |  
|Office and Telephone                                                          |  | 1,036      |   |  | 10,047     |   |  | 10,189     |  
|Office and Warehouse Rent                                                     |  | 4,635      |   |  | 11,221     |   |  | 15,865     |  
|Stock-Based Compensation (Note 6(e))                                          |  | -          |   |  | 194,281    |   |  | -          |  
|Travel and Automobile                                                         |  | 9,177      |   |  | 3,027      |   |  | 13,931     |  
|                                                                              |  |            |   |  |            |   |  |            |  
|                                                                              |  | 250,832    |   |  | 660,024    |   |  | 407,622    |  
|                                                                              |  |            |   |  |            |   |  |            |  
|LOSS BEFORE OTHER ITEMS                                                       |  | (250,832   | ) |  | (659,427   | ) |  | (436,206   | )
|Foreign Exchange (Loss) Gain                                                  |  | (9,917     | ) |  | 20,315     |   |  | (30,773    | )
|Contingent Loss on Legal Claim (Note 10)                                      |  | -          |   |  | (60,750    | ) |  | -          |  
|Net Gain on Sale of Subsidiaries (Note 3)                                     |  | -          |   |  | 222,555    |   |  | -          |  
|Net (Loss) Gain on Settlement of Debts
      (Note 6(b)(iv))                  |  | (13,332    | ) |  | -          |   |  | 21,505     |  
|Loss on Sale of Oil and Gas Interests (Note 7)                                |  | -          |   |  | (2,718     | ) |  | -          |  
|Write-Down Oil and Gas Interests                                              |  | -          |   |  | -          |   |  | (40,499    | )
|Write-Down Intangible Asset (Note 4)                                          |  | (124,246   | ) |  | -          |   |  | -          |  
|                                                                              |  |            |   |  |            |   |  |            |  
|NET LOSS FOR THE YEAR                                                         |  | (398,327   | ) |  | (480,025   | ) |  | (485,973   | )
|                                                                              |  |            |   |  |            |   |  |            |  
|Deficit, Beginning of the Year                                                |  | (2,881,762 | ) |  | (2,401,737 | ) |  | (1,915,764 | )
|                                                                              |  |            |   |  |            |   |  |            |  
|DEFICIT, END OF THE YEAR                                                      |  | (3,280,089 | ) |  | (2,881,762 | ) |  | (2,401,737 | )
|                                                                              |  |            |   |  |            |   |  |            |  
|WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING
      (POST-SHARE CONSOLIDATION) |  | 18,560,292 |   |  | 2,495,843  |   |  | 1,804,562  |  
|                                                                              |  |            |   |  |            |   |  |            |  
|BASIC AND DILUTED LOSS PER SHARE(POST-SHARE
      CONSOLIDATION)              |  | (0.02      | ) |  | (0.19      | ) |  | (0.27      | )

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

5

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|RAINCHIEF ENERGY INC.                        
|---------------------------------------------
|                                             
|Consolidated Statements of Comprehensive Loss
|As at December 31, 2010, 2009 and 2008       
|(Expressed in
      Canadian Dollars)        

|                                        |  | 2010     |   |  | 2009     |   |  | 2008     |  
|--------------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
|                                        |  | $        |   |  | $        |   |  | $        |  
|                                        |  |          |   |  |          |   |  |          |  
|NET LOSS FOR THE YEAR                   |  | (398,327 | ) |  | (480,025 | ) |  | (485,973 | )
|                                        |  |          |   |  |          |   |  |          |  
|Other Comprehensive Income for the Year |  | -        |   |  | -        |   |  | -        |  
|                                        |  |          |   |  |          |   |  |          |  
|COMPREHENSIVE LOSS FOR THE YEAR         |  | (398,327 | ) |  | (480,025 | ) |  | (485,973 | )

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

6

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|RAINCHIEF ENERGY INC.                 
|--------------------------------------
|Consolidated Statements of Cash Flows 
|As at December 31, 2010, 2009 and 2008
|(Expressed in
      Canadian Dollars) 

|                                                              |  | 2010     |   |  | 2009     |   |  | 2008     |  
|------------------------------------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
|                                                              |  | $        |   |  | $        |   |  | $        |  
|CASH PROVIDED BY (USED IN):                                   |  |          |   |  |          |   |  |          |  
|                                                              |  |          |   |  |          |   |  |          |  
|OPERATING ACTIVITIES                                          |  |          |   |  |          |   |  |          |  
|Net Loss for the Year                                         |  | (398,327 | ) |  | (480,025 | ) |  | (485,973 | )
|                                                              |  |          |   |  |          |   |  |          |  
|Non-Cash Items                                                |  |          |   |  |          |   |  |          |  
|Amortization                                                  |  | 107      |   |  | 227      |   |  | 519      |  
|Bad Debt                                                      |  | 5,900    |   |  | 71,000   |   |  | -        |  
|Consulting and
      Investor Relations                       |  | -        |   |  | 82,029   |   |  | 68,548   |  
|Stock-Based Compensation                                      |  | -        |   |  | 194,281  |   |  | -        |  
|Unrealized
      Foreign Exchange Loss                        |  | -        |   |  | -        |   |  | 754      |  
|Net (Gain) on Sale of
      Subsidiaries                      |  | -        |   |  | (222,555 | ) |  | -        |  
|Net Loss (Gain)
      on Settlement of Debts                  |  | 13,333   |   |  | -        |   |  | (21,505  | )
|Loss on Sale of Oil and Gas
      Interests                   |  | -        |   |  | 2,718    |   |  | -        |  
|Write-Down Oil
      and Gas Property                         |  | -        |   |  | -        |   |  | 40,499   |  
|Write-Down Intangible Asset                                   |  | 124,246  |   |  | -        |   |  | -        |  
|                                                              |  |          |   |  |          |   |  |          |  
|                                                              |  | (254,741 | ) |  | (352,325 | ) |  | (397,158 | )
|Change in Non-Cash Working Capital Accounts
      (Note 8(a)) |  | (12,880  | ) |  | 53,921   |   |  | 105,822  |  
|                                                              |  |          |   |  |          |   |  |          |  
|                                                              |  | (267,621 | ) |  | (298,404 | ) |  | (291,336 | )
|                                                              |  |          |   |  |          |   |  |          |  
|FINANCING ACTIVITIES                                          |  |          |   |  |          |   |  |          |  
|Shares Issued for Cash, Net of Issuance Costs                 |  | 279,227  |   |  | 210,271  |   |  | 169,247  |  
|Shares Subscription Advance                                   |  | 196,263  |   |  | 5,384    |   |  | -        |  
|Advances from Related Parties                                 |  | -        |   |  | 64,199   |   |  | 145,838  |  
|Net Proceeds from Promissory Note                             |  | -        |   |  | 7,784    |   |  | -        |  
|                                                              |  |          |   |  |          |   |  |          |  
|                                                              |  | 475,490  |   |  | 287,638  |   |  | 315,085  |  
|                                                              |  |          |   |  |          |   |  |          |  
|INVESTING ACTIVITIES                                          |  |          |   |  |          |   |  |          |  
|Acquisition of Oil and Gas Interests                          |  | -        |   |  | (10,501  | ) |  | (30,500  | )
|Acquisition of Subsidiary                                     |  | (25,646  | ) |  | -        |   |  | -        |  
|Proceeds on Sale of Subsidiaries                              |  | -        |   |  | 10,001   |   |  | -        |  
|Cash Disposed of on Sale of Subsidiaries                      |  | -        |   |  | (283     | ) |  | -        |  
|                                                              |  |          |   |  |          |   |  |          |  
|                                                              |  | (25,646  | ) |  | (783     | ) |  | (30,500  | )
|                                                              |  |          |   |  |          |   |  |          |  
|INCREASE (DECREASE) IN CASH                                   |  | 182,223  |   |  | (11,549  | ) |  | (6,751   | )
|                                                              |  |          |   |  |          |   |  |          |  
|(Bank Indebtedness) Cash, Beginning of the
      Year         |  | (10,986  | ) |  | 563      |   |  | 7,314    |  
|                                                              |  |          |   |  |          |   |  |          |  
|CASH (BANK INDEBTEDNESS), END OF THE
      YEAR               |  | 171,237  |   |  | (10,986  | ) |  | 563      |  
|                                                              |  |          |   |  |          |   |  |          |  
|Supplemental Cash Flow Information (Note 8)                   |  |          |   |  |          |   |  |          |  

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

7

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|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in
      Canadian Dollars)         

NOTE 1  NATURE AND CONTINUANCE OF OPERATIONS

Rainchief Energy Inc. (the Company) was incorporated on
December 28, 2000 under the Company Act of the Province of British Columbia,
Canada. The Company is engaged in the financing and development of photovoltaic
solar energy projects in Europe (Note 4). Prior to January 1, 2010, the Company
had operations in oil and gas exploration, and wine and spirit distribution
(Note 3).

These consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles on a going
concern basis, which assumes the Company will be able to realize assets and
discharge liabilities in the normal course of business for the foreseeable
future. The Company has incurred significant operating losses and negative cash
flows from operations, and has been reliant on external financing of equity. As
at December 31, 2010, the Company has an accumulated deficit of $3,280,089 since
inception.

The Companys ability to continue operations is uncertain and
is dependent upon the support of its creditors, upon its ability to maintain
current financing obligations and obtain necessary financing for its development
projects, and upon future profitable operations. The outcome of these matters
cannot be predicted at this time.

These consolidated financial statements do not reflect any
adjustments to the amounts and classifications of assets and liabilities, which
would be necessary should the Company be unable to continue as a going concern.

NOTE 2  SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements are prepared using
Canadian generally accepted accounting principles (Canadian GAAP) as
summarized below.

|a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The consolidated financial statements include the
      accounts of the Company, and its wholly-owned subsidiaries, Jaydoc Capital
      Corp. from the date of acquisition on December 22, 2010 (Note 4) and
      Rainchief Renewable-1 S.R.L. All intercompany transactions and balances
      have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company disposed of its wholly-owned subsidiaries,
      Black Diamond Importers Inc., Liberty Valley Wines LLC and Point Grey
      Energy Inc., during the year ended December 31, 2009, and accordingly,
      these consolidated financial statements only include the accounts of these
      subsidiaries up to their date of disposal (Note 3). The wine and spirit
      distribution and oil and gas exploration activities of these subsidiaries
      comprised the Companys principal business operations prior to January 1,
      2010, and therefore has not been presented as a disposal of an operating
      segment of the Company or as discontinued operations in accordance with
      Emerging Issues Committee (EIC) 161 on discontinued operations of the
      Canadian Institute of Chartered Accountants (CICA) Handbook. The
      financial results of the Companys reporting segments have been presented
      in Note 11.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|b) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Property and equipment are recorded at cost. Amortization
      is calculated using the following methods and annual rates, except in the
      year of acquisition when one-half the rate is
used:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| | Computer Equipment      | 30% Per Annum, Declining
      Balance Basis
| | ----------------------- | --------------------------------------------
| | Furniture and Equipment | 20% Per Annum, Declining Balance Basis      

|c) | Project Development Costs                            
|-- | -----------------------------------------------------
|   |                                                      
|   | Project development costs are expensed as
  incurred.

8

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|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 2  SIGNIFICANT ACCOUNTING POLICIES (Continued)

|d) | Long-Lived Asset Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company reviews its long-lived assets for impairment
      whenever events or changes in circumstances indicate that the carrying
      amount may not be recoverable. Recoverability is assessed based on the
      carrying amount of a long-lived asset compared to the sum of the future
      undiscounted cash flows expected to result from the use and the eventual
      disposal of the asset. An impairment loss is recognized when the carrying
      amount is not recoverable and exceeds fair value                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|e) | Share Capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company records proceeds from share issuances net of
      commissions and issuance costs. Shares issued for other than cash
      consideration are valued at the quoted price on the Over-the-Counter
      Bulletin Board in the United States based on the earliest of: (i) the date
      the shares are issued, and (ii) the date the agreement to issue the shares
      is reached.                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|f) | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Employee stock options and other types of stock-based
      compensation are accounted for using the fair value based method. The
      Company estimates the fair value using the Black-Scholes option-pricing
      model. The fair value of an option is estimated on the date of grant and
      expensed over the vesting period. The fair value of a brokers warrant is
      determined on the date of grant and recorded as share issuance
    costs.                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Consideration received on the exercise of stock options
      or brokers warrants is recorded as share capital and the related
      contributed surplus amount is transferred to share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|g) | Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Basic loss per share is calculated using the weighted
      average number of common shares outstanding during the year. Diluted loss
      per share is the same as basic loss per share as the issuance of shares on
      the exercise of stock options and share purchase warrants is
      anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|h) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company uses the asset and liability method of
      accounting for income taxes, whereby future income tax assets and
      liabilities are recognized based on temporary differences between the
      financial statement carrying amounts of assets and liabilities, and their
      respective tax bases. Future income tax assets and liabilities are
      measured using substantively enacted tax rates expected to apply to
      taxable income in the years in which the differences are expected to
      reverse. Future income tax assets, including the benefit of income tax
      losses available for carry-forward, are only recognized to the extent that
      it is more likely than not that the Company will realize those
    assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|i) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys reporting and functional currency is the
      Canadian dollar. Transactions in foreign currencies are translated to
      Canadian dollars at the rates in effect on the transaction date. Exchange
      gains or losses arising on translation or settlement of foreign currency
      denominated monetary items are charged to the statement of operations in
      the period they arise.                                                                                                                                                                                                                                                                                                                                                      

9

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 2  SIGNIFICANT ACCOUNTING POLICIES (Continued)

|j) | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Comprehensive income is the change in net assets from
      transactions related to non-shareholder sources. The Company presents
      gains and losses which would otherwise be recorded as part of net earnings
      in other comprehensive income until it is considered appropriate to
      recognize them into net earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|k) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Companys financial instruments are classified into
      one of the following categories: held-for-trading, held-to-maturity, loans
      and receivables, available-for-sale assets or other financial
      liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Financial assets and liabilities held-for-trading are
      recorded at fair value with gains and losses recognized in net income.
      Financial assets and liabilities held-to-maturity, loans and receivables,
      and other financial liabilities are recorded at amortized cost using the
      effective interest method. Available-for-sale financial instruments are
      recorded at fair value with unrealized gains and losses recognized in
      other comprehensive income and reported in shareholders equity.                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Cash are classified as held-for-trading and carried at
      their fair values. Subscription receivable is classified as loan and
      receivable and carried at its amortized cost. Accounts payable and accrued
      liabilities and amounts due to related parties are classified as other
      financial liabilities and carried at their amortized cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|l) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The preparation of financial statements in conformity
      with Canadian GAAP requires management to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and disclosures
      of contingent assets and liabilities as at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Significant areas requiring the use of management
      estimates include the determination of the amortization period of property
      and equipment, the estimated amount of accrued liabilities, the
      realization of future income tax assets, the determination of the fair
      value of shares, share purchase warrants and share rights issued for debt,
      services and property. Actual results could differ from those
      estimates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|m) | Future Accounting Change International
      Financial Reporting Standards (IFRS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In February 2008, the CICA announced that Canadian GAAP
      for publicly accountable enterprises will be replaced by IFRS for fiscal
      years beginning on or after January 1, 2011. Companies will be required to
      provide IFRS comparative information for the previous fiscal year.
      Accordingly, the conversion from Canadian GAAP to IFRS will be applicable
      to the Companys reporting for the first quarter ended March 31, 2011,
      with restatement of comparative information presented.                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The conversion to IFRS will impact the Companys
      accounting policies, information technology and data systems, internal
      control over financial reporting, and disclosure controls and procedures.
      The transition may also impact business activities, such as foreign
      currency activities, certain contractual arrangements, capital
      requirements and compensation arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The financial reporting impact of the transition to IFRS
      is not expected to have a material impact on the Companys consolidated
      financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

10

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 3  SALE OF SUBSIDIARIES

On September 30, 2009, the Company disposed of its interests in
Black Diamond Importers Inc. (BDI) and Liberty Valley Wines LLC (LVW) to a
Director of the Company for $10,000. These subsidiaries were in the business of
distributing wine and spirit products in the Province of British Columbia,
Canada and in the United States.

On December 30, 2009, the Company disposed of its interests in
Point Grey Energy Inc. (PGE) to a Director of the Company for nominal
consideration. The subsidiary was engaged in the acquisition, exploration,
development and production of oil and gas interests in the Province of Alberta,
Canada.

The Company recorded a net gain on the sale of these
subsidiaries in 2009 as follows:

|                                         |  | BDI     |  |  | LVW    |  |  | PGE   |  |  | Total   | 
|---------------------------------------- |  | ------- |  |  | ------ |  |  | ----- |  |  | ------- | 
|                                         |  | $       |  |  | $      |  |  | $     |  |  | $       | 
|                                         |  |         |  |  |        |  |  |       |  |  |         | 
|Consideration                            |  | 5,000   |  |  | 5,000  |  |  | 1     |  |  | 10,001  | 
|Net Liabilities of Subsidiaries Disposed |  | 197,057 |  |  | 10,543 |  |  | 4,954 |  |  | 212,554 | 
|                                         |  |         |  |  |        |  |  |       |  |  |         | 
|Gain on Sale of Subsidiaries             |  | 202,057 |  |  | 15,543 |  |  | 4,955 |  |  | 222,555 | 

The consolidated carrying amounts of the assets and liabilities
of BDI and LVW as of September 30, 2009 and PGE as of December 30, 2009 were:

|Assets                                   |  |          |   |  |         |   |  |        |   |  |          |  
|---------------------------------------- |  | -------- | - |  | ------- | - |  | ------ | - |  | -------- | -
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|Current                                  |  |          |   |  |         |   |  |        |   |  |          |  
|Cash                                     |  | 566      |   |  | -       |   |  | -      |   |  | 566      |  
|Accounts Receivable                      |  | 1,350    |   |  | -       |   |  | -      |   |  | 1,350    |  
|GST Recoverable                          |  | 818      |   |  | -       |   |  | -      |   |  | 818      |  
|Inventory                                |  | 9,635    |   |  | -       |   |  | -      |   |  | 9,635    |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|                                         |  | 12,369   |   |  | -       |   |  | -      |   |  | 12,369   |  
|Due from Related Party                   |  | -        |   |  | 9,421   |   |  | -      |   |  | 9,421    |  
|Property and Equipment                   |  | 470      |   |  | -       |   |  | -      |   |  | 470      |  
|Oil and Gas Interests                    |  | -        |   |  | -       |   |  | 1      |   |  | 1        |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|                                         |  | 12,839   |   |  | 9,421   |   |  | 1      |   |  | 22,261   |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|Liabilities                              |  |          |   |  |         |   |  |        |   |  |          |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|Current                                  |  |          |   |  |         |   |  |        |   |  |          |  
|Accounts Payable and Accrued Liabilities |  | 128,168  |   |  | 19,964  |   |  | -      |   |  | 148,132  |  
|Due to Related Parties                   |  | 81,728   |   |  | -       |   |  | 4,955  |   |  | 86,683   |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|                                         |  | 209,896  |   |  | 19,964  |   |  | 4,955  |   |  | 234,815  |  
|                                         |  |          |   |  |         |   |  |        |   |  |          |  
|Net (Liabilities)                        |  | (197,057 | ) |  | (10,543 | ) |  | (4,954 | ) |  | (212,554 | )

The operations of these former subsidiaries comprised the
Companys principal business operations, and therefore have not been segregated
and presented as a disposal of an operating segment of the Company or as
discontinued operations.

11

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 3  SALE OF SUBSIDIARIES (Continued)

The accounts of these integrated foreign operations, which were
recorded in United States dollars, were translated into Canadian dollars using
the temporal method. Under this method, monetary assets and liabilities were
translated at the rate of exchange in effect as at the balance sheet date and
non-monetary assets and liabilities were translated at their applicable
historical rates. Revenues and expenses were translated at the average rates
prevailing for the year, except for amortization which was translated at the
historical rates associated with the assets being amortized. Foreign exchange
gains and losses from the translation of foreign operations were reflected in
the statement of operations.

NOTE 4  ACQUISITION OF JAYDOC CAPITAL CORP.

Effective December 22, 2010 the Company 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. The purchase consideration was satisfied by the
Company issuing 4,000,000 common shares with a fair value of $80,000 and
7,000,000 share rights with a fair value of $18,600 valued at the date of the
purchase agreement on October 12, 2010. Each share right was exercisable into
one common share of the Company at a price of US$0.02 per share until November
22, 2010.

Jaydoc was acquired to facilitate the Companys 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. Jaydoc had no other
assets or liabilities as at the date of acquisition.

The acquisition has been accounted for by the purchase method
with the fair value of the consideration being allocated to intangible asset
comprising of the business plan and relationship for solar power project under
development.

|                                                                                  |  | $       | 
|--------------------------------------------------------------------------------- |  | ------- | 
|                                                                                  |  |         | 
|Fair Value of 4,000,000 Common Shares
      Issued                                |  | 80,000  | 
|Fair Value of 7,000,000 Share Rights Issued                                       |  | 18,600  | 
|Legal Fees Incurred                                                               |  | 25,646  | 
|                                                                                  |  |         | 
|Total Consideration Paid, Being the Fair
      Value of Intangible Asset Acquired |  | 124,246 | 

On November 22, 2010, the former shareholders of Jaydoc (the
vendors) subscribed to 5,000,000 common shares of the Company upon the
exercise of share rights for gross proceeds totalling $101,386 (US$100,000) at
an exercise price of US$0.02 per share. The fair value of these share rights in
the amount of $13,286 was transferred from contributed surplus to share capital
accordingly. The remaining 2,000,000 share rights expired unexercised.

On December 31, 2010, the Company wrote down the intangible
asset due to the lack of reliable measurement of the future cash flows of the
solar energy project.

On March 4, 2011, the Company entered into a Stock Surrender,
Settlement and Voluntary Pooling Agreement with the former shareholders of
Jaydoc who agreed to surrender 4,500,000 common shares of the Company as final
settlement of deficiencies identified in certain representations arising out of
the Jaydoc acquisition (Note 13(b)).

12

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 5  PROPERTY AND EQUIPMENT

|                        |  |       |  |  | Accumulated  |  |  | Net Book | 
|----------------------- |  | ----- |  |  | ------------ |  |  | -------- | 
|                        |  | Cost  |  |  | Amortization |  |  | Value    | 
|                        |  | $     |  |  | $            |  |  | $        | 
|2010                    |  |       |  |  |              |  |  |          | 
|Computer Equipment      |  | 3,890 |  |  | 3,757        |  |  | 133      | 
|Furniture and Equipment |  | 1,656 |  |  | 1,456        |  |  | 200      | 
|                        |  |       |  |  |              |  |  |          | 
|                        |  | 5,546 |  |  | 5,213        |  |  | 333      | 
|                        |  |       |  |  |              |  |  |          | 
|2009                    |  |       |  |  |              |  |  |          | 
|Computer Equipment      |  | 3,890 |  |  | 3,699        |  |  | 191      | 
|Furniture and Equipment |  | 1,656 |  |  | 1,406        |  |  | 250      | 
|                        |  |       |  |  |              |  |  |          | 
|                        |  | 5,546 |  |  | 5,105        |  |  | 441      | 

NOTE 6  SHARE CAPITAL

|a) | Authorized Capital                                      
|-- | --------------------------------------------------------
|   |                                                         
|   | Unlimited number of common shares without par
    value.
|   |                                                         
|b) | Issued and Outstanding Common
  Shares                  

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

13

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 6  SHARE CAPITAL (Continued)

|b) | Issued and Outstanding Common Shares
      (Continued)                                            
|-- | --------------------------------------------------------------------------------------------------
|   |                                                                                                   
|   | i)                                                                                                
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   | ii)                                                                                               
|   |                                                                                                   
|   | iii)                                                                                              
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|   | iv)                                                                                               
|   |                                                                                                   
|   |                                                                                                   
|   |                                                                                                   
|c) | Escrow Shares                                                                                     
|   |                                                                                                   
|   | As at December 31, 2010, the Company has no shares (2009
       Nil) held in escrow (Note 13(b)).

14

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 6  SHARE CAPITAL (Continued)

|d) | Share Purchase Warrants                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                  
|   | The Company has the following warrants outstanding as at
      December 31, 2010 which expire on various dates between March 21, 2011 and
      October 28, 2015:

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

| | (i)  | During the year ended December 31, 2009, the Company
      issued a total of 1,700,000 warrants with a total fair value of $82,029
      (Note 6(e)) for investor relations and consulting services. Each warrant
      is exercisable into one common share at US$0.08 per share and expires on
      June 30, 2014. Subsequent to the share consolidation (Note 6(b)(ii)), the
      number of warrants issued has been adjusted to 170,000 warrants
      exercisable at US$0.80 per share.                                
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii) | During the year ended December 31, 2009, the Company
      issued a total of 1,500,000 warrants with a total fair value of $194,281
      (Note 6(e)) to Directors and Officers of the Company for management
      services. Each warrant is exercisable into one common share at a price of
      US$0.08 per share and expires on June 30, 2014. Subsequent to the share
      consolidation (Note 6(b)(ii)), the number of warrants issued has been
      adjusted to 150,000 warrants exercisable at US$0.80 per
  share.

|e) | Contributed Surplus and Stock Based
      Compensation
|-- | ------------------------------------------------------

| |                                                                         |  | 2010    |   |  | 2009    | 
| | ----------------------------------------------------------------------- |  | ------- | - |  | ------- | 
| |                                                                         |  | $       |   |  | $       | 
| |                                                                         |  |         |   |  |         | 
| | Balance, Beginning of the
      Year                                    |  | 366,788 |   |  | 90,478  | 
| | Warrants Issued for Consulting and Investor
      Relations Services    |  | -       |   |  | 82,029  | 
| | Warrants Issued for
      Management Services                           |  | -       |   |  | 194,281 | 
| | Shares Rights Issued for Acquisition of
      Subsidiary (Note 4)       |  | 18,600  |   |  | -       | 
| | Fair Value of Exercised Share
      Rights Transferred to Share Capital |  | (13,286 | ) |  | -       | 
| |                                                                         |  |         |   |  |         | 
| | Balance, End of the
      Year                                          |  | 372,102 |   |  | 366,788 | 

15

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 6  SHARE CAPITAL (Continued)

|e) | Contributed Surplus and Stock Based Compensation
      (Continued)                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                  
|   | The weighted average unit fair value of share rights and
      warrants issued during the years ended December 31, 2010 and 2009 was
      $0.003 and $0.09 respectively. The fair value of these share rights and
      warrants was estimated on the grant date utilizing the Black-Scholes
      pricing model with the following assumptions:

2010
    2009Risk-Free Annual Interest Rate
    0.89%
    2.6%Expected Annual Dividend Yield
    0%
    0%Expected Stock Price Volatility
    98%
    179%Expected Life of Share Right or Warrant
    0.1
      years
    5.0
      years


Option pricing models require the input
of highly subjective assumptions. Changes in the subjective input assumptions
can materially affect the fair value estimate, and therefore the existing models
may not necessarily provide a single reliable measure of the fair value of the
warrants issued.

NOTE 7  DISPOSAL OF OIL AND GAS INTERESTS

On July 8, 2009 the Company acquired a five-year petroleum and
natural gas lease in the Peace River area of Alberta, Canada for total
consideration of $10,501. The Company 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. Accordingly, the Company recorded a loss of $2,718 on the disposition of
the lease.

NOTE 8  SUPPLEMENTAL CASH FLOW INFORMATION

|   |                                                         |  | 2010    |   |  | 2009    |   |  | 2008    |  
|-- | ------------------------------------------------------- |  | ------- | - |  | ------- | - |  | ------- | -
|   |                                                         |  | $       |   |  | $       |   |  | $       |  
|a) | Change in Non-Cash Working Capital
      Accounts       |  |         |   |  |         |   |  |         |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|   | Accounts Receivable                                     |  | -       |   |  | 9,699   |   |  | (11,050 | )
|   | HST/GST Recoverable                                     |  | 639     |   |  | (11,548 | ) |  | 10,734  |  
|   | Inventory                                               |  | -       |   |  | 9,844   |   |  | 38,456  |  
|   | Accounts Payable and Accrued Liabilities                |  | (13,519 | ) |  | 45,926  |   |  | 67,682  |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|   |                                                         |  | (12,880 | ) |  | 53,921  |   |  | 105,822 |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|b) | Significant Non-Cash Financing Activities               |  |         |   |  |         |   |  |         |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|   | Shares Issued for Business Acquisition                  |  | 80,000  |   |  | -       |   |  | -       |  
|   | Share Rights Issued for Business
      Acquisition      |  | 18,600  |   |  | -       |   |  | -       |  
|   | Shares Issued for Settlement of Debts                   |  | 152,600 |   |  | -       |   |  | 17,664  |  
|   | Shares Issued for Amounts Owed to Related
      Parties |  | -       |   |  | -       |   |  | 279,232 |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|   |                                                         |  | 251,200 |   |  | -       |   |  | 296,896 |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|c) | Other Information                                       |  |         |   |  |         |   |  |         |  
|   |                                                         |  |         |   |  |         |   |  |         |  
|   | Interest Paid                                           |  | -       |   |  | 1,787   |   |  | 1,115   |  

16

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 9  RELATED PARTIES TRANSACTIONS

In addition to those transactions disclosed elsewhere in these
consolidated financial statements, the Company has the following related party
balances and transactions. All related party transactions were in the normal
course of operations and were measured at the exchange value, which represented
the fair value established and agreed to by the related parties.

|a) | Due to Related Parties
|-- | ----------------------

| |                                                             |  | 2010 |  |  | 2009   | 
| | ----------------------------------------------------------- |  | ---- |  |  | ------ | 
| |                                                             |  | $    |  |  | $      | 
| | Due to 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 | 

|   | As at December 31, 2009, the Company had a net amount of
      $91,810 due to related parties which was unsecured, non-interest bearing
      and had no specific terms of repayment. During the year ended December 31,
      2010, debts of $97,710 were assigned to arms length parties for a nominal
      consideration and were subsequently settled by the Company through the
      issuance of shares (Note 6(b)(iv)). Concurrent with the debt settlement,
      the Company wrote off $5,900 in an amount owed by a related
  party.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|b) | Related Party
Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                                                                                                                             |  | 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 | 

Effective November 1, 2010, the Company
entered into a consulting agreement with a company controlled by a Director
(also an Officer) of the Company for general management and administration
services at $5,000 per month for a term of 2 years.

NOTE 10  CONTINGENCY

In March 2009, the Company was served a Notice of Termination
citing breach of a licensing agreement by the Company as a result of its default
on certain royalty payments. The total amount of claim against the Company was
$60,750 which the Company has recorded a provision on December 31, 2009 for this
contingent liability.

The outcome of this legal claim is uncertain, and management is
of the opinion that the claim has no merit and seeks to recover all costs. Any
recovery resulting from the resolution of this contingency will be accounted for
in the period of settlement.

17

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 11  SEGMENTED INFORMATION

Prior to 2010, the Company had operations in the exploration of
oil and gas, and the distribution of wine and spirit (Note 3). Concurrent with
the acquisition of Jaydoc on December 22, 2010 (Note 4), the Company commenced
its operations in the financing and development of solar energy projects. As at
December 31, 2010, the solar energy operation has no assets.

|                     |  |         |  |  |             |  |  | Oil and Gas  |  |  | Wine and Spirit |  |  |      |  |  |       | 
|-------------------- |  | ------- |  |  | ----------- |  |  | ------------ |  |  | --------------- |  |  | ---- |  |  | ----- | 
|                     |  | Total   |  |  | Exploration |  |  | Distribution |  |  | Corporate       | 
|                     |  | 2010    |  |  | 2009        |  |  | 2010         |  |  | 2009            |  |  | 2010 |  |  | 2009  | 
|                     |  | $       |  |  | $           |  |  | $            |  |  | $               |  |  | $    |  |  | $     | 
|Sales                |  | -       |  |  | 3,838       |  |  | -            |  |  | -               |  |  | -    |  |  | 3,838 | 
|Gross Profit         |  | -       |  |  | 597         |  |  | -            |  |  | -               |  |  | -    |  |  | 597   | 
|Amortization         |  | 107     |  |  | 227         |  |  | -            |  |  | -               |  |  | -    |  |  | 83    | 
|Total Assets         |  | 205,148 |  |  | 14,284      |  |  |              |  |  | -               |  |  |      |  |  | -     | 
|Capital Expenditures |  | -       |  |  | 10,501      |  |  | -            |  |  | 10,501          |  |  | -    |  |  | -     | 

NOTE 12  INCOME TAXES

|a) | Provision for Income Taxes                                                     
|-- | -------------------------------------------------------------------------------
|   |                                                                                
|   | A reconciliation of income taxes at the statutory tax
      rate is as follows:

| |                                                        |  | 2010     |   |  | 2009     |   |  | 2008     |  
| | ------------------------------------------------------ |  | -------- | - |  | -------- | - |  | -------- | -
| |                                                        |  |          |   |  |          |   |  |          |  
| | Combined Federal and Provincial Income Tax
      Rates |  | 13.50%   |   |  | 13.50%   |   |  | 14.92%   |  
| |                                                        |  |          |   |  |          |   |  |          |  
| |                                                        |  | $        |   |  | $        |   |  | $        |  
| | Loss Before Income Taxes                               |  | (398,327 | ) |  | (480,025 | ) |  | (485,973 | )
| |                                                        |  |          |   |  |          |   |  |          |  
| | Expected Income Tax Recovery                           |  | (53,774  | ) |  | (64,803  | ) |  | (72,495  | )
| | Permanent Differences                                  |  | -        |   |  | (2,223   | ) |  | 488      |  
| | Change in Valuation Allowance                          |  | 45,845   |   |  | 62,163   |   |  | (43,707  | )
| | Effect of Change in Tax Rates                          |  | 8,387    |   |  | 243      |   |  | 79,308   |  
| | Expiration of Non-Capital Losses and Other             |  | (458     | ) |  | 4,620    |   |  | 36,406   |  
| |                                                        |  |          |   |  |          |   |  |          |  
| | Income Tax Expense (Recovery)                          |  | -        |   |  | -        |   |  | -        |  

|b) | Future Income Taxes                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                  
|   | The tax effects of significant temporary differences that
      give rise to future income tax assets as at December 31, 2010 and 2009
      are:

Future Income Tax Assets:Non-Capital Losses
      Carry-Forward
    
    374,174
    
    
    337,526Capital Losses Carry-Forward
    
    183
    
    
    183Property and Equipment
      and Other
    
    8,598
    
    
    197Share Issue Costs
    
    7,102
    
    
    6,306Valuation Allowance
    
    (390,057
    )
    
    (344,212
    )Net Future Income Tax Assets
    
    -
    
    
    -


18

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 12  INCOME TAXES (Continued)

|b) | Future Income Taxes (Continued)                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                
|   | As at December 31, 2010, the Company has non-capital
      losses of approximately $2,771,600 which may be applied to reduce future
      taxable income in Canada. The non-capital losses expire as
  follows:

2014
    
    24,2002015
    
    86,3002026
    
    313,1002027
    
    515,3002028
    
    367,4002029
    
    1,157,9002030
    
    307,4002,771,600


Future tax benefits which may arise as a result of these losses
have not been recognized in these financial statements and have been offset by a
valuation allowance.

NOTE 13  SUBSEQUENT EVENTS

|a) | Private Placements                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On January 24, 2011, the Company 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, the Company 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).                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                              
|b) | Shares Surrendered and Returned to
  Treasury                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Subsequent to year-end, the Company 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 (Note 4).                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                              
|   | A total of 4,500,000 common shares were returned to the
      treasury of the Company as final settlement of deficiencies identified by
      the Company 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.                                                                                                               

19

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 14  FINANCIAL INSTRUMENTS

The Companys financial instruments are exposed to certain
financial risks:

|a) | Fair Values                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The carrying values of cash, bank indebtedness,
      subscription receivable, accounts payable and accrued liabilities, and
      amounts due to related parties approximate their fair value as at the
      balance sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|b) | Liquidity Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Liquidity risk refers to the risk that an entity will
      encounter difficulty meeting obligations associated with financial
      liabilities. The Company is dependent upon on the availability of credit
      from its suppliers and its ability to generate sufficient funds from
      equity and debt financing to meet current and future obligations. There
      can be no assurance that such financing will be available on terms
      acceptable to the Company.                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|c) | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Credit risk is the risk of loss associated with a counter
      partys inability to fulfill its payment obligations. Management considers
      that risks related to credit are not significant to the Company at this
      time.                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|d) | Interest Rate Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Interest rate risk is the risk that the fair value or
      future cash flows of a financial instrument will fluctuate because of
      changes in market interest rates. Management considers that risks related
      to interest are not significant to the Company at this time. Amounts owed
      from and to related parties are non-interest bearing.                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|e) | Foreign Exchange Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company operates in Canada and Europe, and is
      publicly listed on the Over-The-Counter Bulletin Board in the United
      States. Some of its expenditures are payable in Euros and U.S. dollars,
      and its share subscription proceeds are receivable in U.S. dollars. The
      Company is therefore subject to currency exchange risk arising from the
      degree of volatility of changes in exchange rates. The Company does not
      use derivative instruments to reduce its exposure to foreign currency
      risk. As at December 31, 2010, the Company had the following financial
      instruments denominated in U.S. dollars:

US$Cash
    
    165,532Subscription Receivable
    
    20,000185,532


NOTE 15  CAPITAL MANAGEMENT

The Companys objective for managing its capital structure is
to safeguard the Companys ability to continue as a going concern and to ensure
it has the financial capacity, liquidity and flexibility to fund its on-going
operations and capital expenditures including investment in resource properties
it has or may acquire.

The Company manages its share capital as capital, which as at
December 31, 2010 totalled $2,786,932 (2009  $2,241,445). At this time the
Companys access to the debt market is limited and it relies on equity issuances
and the support of shareholders to fund its investments in capital assets and
development of solar power projects. The Company monitors capital to maintain a
sufficient working capital position to fund annualized administrative expenses
and capital investments.

20

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 15  CAPITAL MANAGEMENT (Continued)

As at December 31, 2010 the Company had a working capital
surplus of $74,875. The Company will issue shares and may from time to time
adjust its capital spending to maintain or adjust the capital structure. There
can be no assurance that the Company will be able to obtain debt or equity
capital in the case of operating cash deficits.

The Companys share capital is not subject to external
restrictions. The Company has not paid or declared any dividends since the date
of incorporation, nor are any contemplated in the foreseeable future. There were
no changes in the Companys approach to capital management during the year ended
December 31, 2010.

NOTE 16  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The Company prepares its consolidated financial statements in
accordance with accounting principles generally accepted in Canada (CDN GAAP)
which differ in certain respects from those principles that the Company would
have followed had its consolidated financial statements been prepared in
accordance with accounting principles generally accepted in the United States
(US GAAP) and from practices prescribed by the United States Securities and
Exchange Commission (SEC).

Significant measurement differences between CDN and US GAAP and
their effect on the consolidated balance sheets, statements of operations and
deficit, and cash flows are quantified below and described in the accompanying
notes.

|                                                                                                               |  |     |  |  | 2010       |   |  | 2009     |  
|-------------------------------------------------------------------------------------------------------------- |  | --- |  |  | ---------- | - |  | -------- | -
|                                                                                                               |  |     |  |  | $          |   |  | $        |  
|                                                                                                               |  |     |  |  |            |   |  |          |  
|Total Assets under CDN GAAP and US
      GAAP                                                                  |  |     |  |  | 205,148    |   |  | 14,284   |  
|                                                                                                               |  |     |  |  |            |   |  |          |  
|Total Liabilities under CDN GAAP                                                                               |  |     |  |  | 129,940    |   |  | 282,429  |  
|                                                                                                               |  |     |  |  |            |   |  |          |  
|Warrant Derivative Liability                                                                                   |  | (d) |  |  | 1,614,000  |   |  | 143,000  |  
|                                                                                                               |  |     |  |  |            |   |  |          |  
|Total Liabilities under US GAAP                                                                                |  |     |  |  | 1,743,940  |   |  | 425,429  |  
|                                                                                                               |  |     |  |  |            |   |  |          |  
|Total Shareholders Equity (Deficiency)
      under CDN GAAP                                                   |  |     |  |  | 75,208     |   |  | (268,145 | )
|Reduction in Share Capital and Contributed Surplus by the                                                      |  |     |  |  |            |   |  |          |  
|Initial Value of
      Warrants and Share Rights                                                               |  | (d) |  |  | (605,345   | ) |  | (486,670 | )
|Adjustments to Accumulated Deficit:                                                                            |  |     |  |  |            |   |  |          |  
|Decrease in Write-Down
      of Intangible Asset                                                               |  | (c) |  |  | 25,646     |   |  | -        |  
|Acquisition-Related Costs Expensed                                                                             |  | (c) |  |  | (25,646    | ) |  | -        |  
|(Loss) Gain
      on the Change in Fair Value of
      Derivative Liability
      on Warrants and Share Rights |  | (d) |  |  | (1,008,655 | ) |  | 343,670  |  
|Total Shareholders Deficiency under US GAAP                                                                   |  |     |  |  | (1,538,792 | ) |  | (411,145 | )

21

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 16  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

|                                                                                                   |  |     |  |  | 2010       |   |  | 2009      |   |  | 2008      |  
|-------------------------------------------------------------------------------------------------- |  | --- |  |  | ---------- | - |  | --------- | - |  | --------- | -
|                                                                                                   |  |     |  |  | $          |   |  | $         |   |  | $         |  
|                                                                                                   |  |     |  |  |            |   |  |           |   |  |           |  
|Net Loss for the Year
      under CDN GAAP                                                         |  |     |  |  | (398,327   | ) |  | (480,025  | ) |  | (485,973  | )
|Decrease in Write-Down of Intangible Asset                                                         |  | (c) |  |  | 25,646     |   |  | -         |   |  | -         |  
|Acquisition-Related Costs
      Expensed                                                           |  | (c) |  |  | (25,646    | ) |  | -         |   |  | -         |  
|(Loss) Gain on the Change in Fair Value of
      Derivative Liability on Warrants and Share Rights |  | (d) |  |  | (1,352,326 | ) |  | 274,184   |   |  | 69,486    |  
|                                                                                                   |  |     |  |  |            |   |  |           |   |  |           |  
|Net Loss for the Year under US GAAP                                                                |  |     |  |  | (1,750,653 | ) |  | (205,841  | ) |  | (416,487  | )
|                                                                                                   |  |     |  |  |            |   |  |           |   |  |           |  
|Basic and Diluted Loss per Share under US
      GAAP                                               |  |     |  |  | (0.09      | ) |  | (0.08     | ) |  | (0.23     | )
|                                                                                                   |  |     |  |  |            |   |  |           |   |  |           |  
|Weighted Average Number of Common Shares
      Outstanding under CDN GAAP and US GAAP              |  |     |  |  | 18,560,292 |   |  | 2,495,843 |   |  | 1,804,562 |  

The effect of measurement differences between CDN GAAP and US
GAAP on the consolidated statement of cash flows for the years ended December
31, 2010, 2009 and 2008 are summarized below:

|Cash Flows from Operating Activities under
      CDN GAAP                   |  |     |  |  | (267,621 | ) |  | (298,404 | ) |  | (291,336 | )
|--------------------------------------------------------------------------- |  | --- |  |  | -------- | - |  | -------- | - |  | -------- | -
|Acquisition-Related Costs Expensed                                          |  | (c) |  |  | (25,646  | ) |  | -        |   |  | -        |  
|Cash Flows from Operating Activities
      under US GAAP                    |  |     |  |  | (293,267 | ) |  | (298,404 | ) |  | (291,336 | )
|Cash Flows from Financing Activities under CDN
      GAAP and US GAAP       |  |     |  |  | 475,490  |   |  | 287,638  |   |  | 315,085  |  
|Cash Flows from Investing Activities under
      CDN GAAP                   |  |     |  |  | (25,646  | ) |  | (783     | ) |  | (30,500  | )
|Acquisition-Related Costs Expensed                                          |  | (c) |  |  | 25,646   |   |  | -        |   |  | -        |  
|Cash Flows from Investing Activities
      under US GAAP                    |  |     |  |  | -        |   |  | (783     | ) |  | (30,500  | )
|Cash, Beginning of the Year, under CDN GAAP and US GAAP                     |  |     |  |  | (10,986  | ) |  | 563      |   |  | 7,314    |  
|Cash (Bank Indebtedness), End of the
      Year, under CDN GAAP and US GAAP |  |     |  |  | 171,237  |   |  | (10,986  | ) |  | 563      |  

a) Income Taxes

Under Canadian GAAP, future income tax assets and liabilities
are recorded at substantively enacted tax rates. Under US GAAP, deferred tax
assets and liabilities are recorded only at enacted tax rates. Any deferred
income tax assets would have been required to be reduced to $Nil by a valuation
allowance, which is consistent with the accounting treatment under Canadian
GAAP. Accordingly, accounting for income taxes under Canadian and US GAAP has
resulted in no significant differences.

The Company has reviewed its income tax positions in its tax
filings, and based on its review, the Company does not believe that any income
tax positions taken are subject to material uncertainty if reviewed by the
Canada Revenue Agency or the Internal Revenue Service.

22

---

|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 16  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

|b) | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Under both Canadian and US GAAP, the Company uses the
      fair value measurement method for stock- based compensation. Accordingly,
      there is no significant difference in the consolidated financial
      statements prepared under Canadian and US GAAP.                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|c) | Business Combination                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The differences in Canadian and US GAAP with respect to
      business combination would result in a net decrease of $25,646 in the
      purchase cost of the acquisition of Jaydoc (Note 4) under US GAAP. As a
      result, the value of the intangible asset acquired and subsequently
      written down would be increased by the same amount under US GAAP in
      2010.                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|d) | Warrant Derivative Liability                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Under Canadian GAAP, the proceeds received on issuance of
      units, consisting of common shares and share purchase warrants, are not
      required to be allocated to the individual common share and warrant
      components when the instruments and its components are all determined to
      be equity instruments.                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Effective January 1, 2009, the Company adopted new
      accounting guidance under US GAAP which indicates that an equity-linked
      financial instrument would not be considered indexed to an entitys own
      stock if the exercise price is denominated in a currency other than the
      companys functional currency, and would be accounted for as derivative
      liabilities with changes in fair value recorded to the consolidated
      statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The functional currency of the Company is the Canadian
      dollar, while the exercise price of the Companys warrants is denominated
      in US dollars. Accordingly, the Companys warrants is now required to be
      treated as a derivative liability under US GAAP, with changes in fair
      value recorded to the consolidated statements of operations. The fair
      value of the warrants is determined using the Black-Scholes option-
      pricing model.       

23

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|RAINCHIEF ENERGY INC.                         
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|December 31, 2010                             
|(Expressed in Canadian
      Dollars)         

NOTE 16  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

|d) | Warrant Derivative Liability (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On January 1, 2009, the grant date fair value of warrants
      of $40,408 and $81,078 was reallocated from share capital and contributed
      surplus respectively under US GAAP, and a derivative liability was
      recorded in the amount of $52,000 being the fair value of the warrants on
      January 1, 2009, with a decrease in opening accumulated deficit of $69,486
      for the gain on change in fair value of derivative liability.                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended December 31, 2009, the Company
      issued warrants with an initial value of $365,184 determined on a relative
      fair value basis on the date of grant. An amount of $88,874 and $276,310
      was reallocated from share capital and contributed surplus respectively to
      derivative liability under US GAAP. As at December 31, 2009, the
      derivative liability was adjusted to its fair value of $143,000 with a
      decrease of $274,184 in consolidated net loss for the gain on change in
      fair value of derivative liability.                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended December 31, 2010, the Company
      issued warrants with an initial value of $113,360 determined on a relative
      fair value basis on the date of grant, which was reallocated from share
      capital to derivative liability under US GAAP. As at December 31, 2010,
      the derivative liability was adjusted to its fair value of $1,614,000 with
      an increase of $1,357,640 in consolidated net loss for the loss on change
      in fair value of derivative liability. In addition, the fair value of
      unexercised, expired share rights was $Nil as at December 31, 2010, and
      accordingly the Company reallocated the grant date fair value of these
      share rights of $5,314 from contributed surplus to gain on change in fair
      value of derivate liability resulting in a decrease in consolidated net
      loss.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|e) | Consolidated Statements of Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has included a subtotal in cash flows from
      operating activities. Under US GAAP, no such subtotal would be
      disclosed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

24

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