----

|          |                                                                                            | Page   |
|---------------|-------------------------------------------------------------------------------------------------|--------|
|          | PART      I - FINANCIAL INFORMATION                                                             |   |
|          |                                                                                            |   |
| ITEM      1.  | Consolidated      Financial Statements                                                          | 3      |
|          |                                                                                            |   |
| ITEM      2.  | Management's      Discussion and Analysis of Financial Condition and Results of      Operations | 31     |
|          |                                                                                            |   |
| ITEM      3.  | Quantitative      and Qualitative Disclosures About Market Risk                                 | 33     |
|          |                                                                                            |   |
| ITEM      4T. | Controls      and Procedures                                                                    | 33     |
|          |                                                                                            |   |
|          | PART      II - OTHER INFORMATION                                                                |   |
|          |                                                                                            |   |
| ITEM      1.  | Legal      Proceedings                                                                          | 33     |
|          |                                                                                            |   |
| ITEM      1A. | Risk      Factors                                                                               | 33     |
|          |                                                                                            |   |
| ITEM      2.  | Unregistered      Sales of Equity Securities and Use of Proceeds                                | 33     |
|          |                                                                                            |   |
| ITEM      3.  | Defaults      Upon Senior Securities                                                            | 35     |
|          |                                                                                            |   |
| ITEM      4.  | Submission      of Matters to a Vote of Security Holders                                        | 35     |
|          |                                                                                            |   |
| ITEM      5.  | Other      Information                                                                          | 35     |
|          |                                                                                            |   |
| ITEM      6.  |  Exhibits                                                                                  | 35     |

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----

----

----

|                                                                   |   | As      at31      January 2010 |   |  As      at30      April2009(Audited) |
|------------------------------------------------------------------------|--------|-------------------------------------|--------|--------------------------------------------|
|                                                                   |   | $                                   |   | $                                          |
| Assets                                                                 |   |                                |   |                                       |
|                                                                   |   |                                |   |                                       |
| Current                                                                |   |                                |   |                                       |
| Cash      and cash equivalents                                         |   | 5,229                               |   | 4,786                                      |
| Accounts      receivable                                               |   | 207                                 |   | 183                                        |
| Prepaid      expenses (Note 10)                                        |   | 16,501                              |   | 78,345                                     |
|                                                                   |   |                                |   |                                       |
|                                                                   |   | 21,937                              |   | 83,314                                     |
|                                                                   |   |                                |   |                                       |
| Patents (Note      3)                                                  |   | 108,745                             |   | 108,745                                    |
|                                                                   |   |                                |   |                                       |
| Property and equipment      (Note 4)                                   |   | 2,039                               |   | 251,526                                    |
|                                                                   |   |                                |   |                                       |
|                                                                   |   | 132,721                             |   | 443,585                                    |
| Liabilities                                                            |   |                                |   |                                       |
|                                                                   |   |                                |   |                                       |
| Current                                                                |   |                                |   |                                       |
| Accounts      payable and accrued liabilities (Note 5)                 |   | 207,788                             |   | 40,770                                     |
| Due      to related party (Note 8)                                     |   | 622                                 |   | 551                                        |
| Provision      for legal dispute (Note 12 ii)                          |   | 0                                   |   | 72,000                                     |
|                                                                   |   |                                |   |                                       |
|                                                                   |   | 280,410                             |   | 113,321                                    |
|                                                                   |   |                                |   |                                       |
| Stockholders’      equity (deficiency)                           |   |                                |   |                                       |
| Capital stock (Note      10)                                           |   |                                |   |                                       |
| Authorized                                                             |   |                                |   |                                       |
| 200,000,000      common shares, par value $0.001                       |   |                                |   |                                       |
| 50,000,000      preferred shares, par value $0.001                     |   |                                |   |                                       |
| Issued      and outstanding                                            |   |                                |   |                                       |
| 31      January 2010 – 1,237,224 common shares, par value $0.001 |   |                                |   |                                       |
| 30      April 2009 – 1,120,195 common shares, par value $0.001   |   | 1,237                               |   | 1,120                                      |
| Additional      paid-in capital                                        |   | 5,402,837                           |   | 5,465,365                                  |
| Warrants                                                               |   | 727,413                             |   | 280,274                                    |
| Accumulated      comprehensive loss                                    |   | (4,245)                             |   | (4,198)                                    |
| Deficit,      accumulated during the development stage                 |   | (6,202,931)                         |   | (5,412,297)                                |
|                                                                   |   |                                |   |                                       |
|                                                                   |   | (75,689)                            |   | 330,264                                    |
|                                                                   |   |                                |   |                                       |
|                                                                   |   | 132,721                             |   | 443,585                                    |

----

----

|                                                                                     |   |     For      the period from the date of inception on 2 September 2003 to31      January 2010      (Unaudited) |   |        For      the three month period ended31      January2010 |   |        For      the three month period ended31      January2009 |   |        For      the nine month period ended31      January2010 |   |        For      the nine month period ended31      January2009 |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|
|                                                                                     |   | $                                                                                                                                       |   | $                                                                                                       |   | $                                                                                                       |   | $                                                                                                      |   | $                                                                                                      |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Expenses                                                                                 |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| General      and administrative (Schedule 1)                                             |   | 6,032,103                                                                                                                               |   | 92,134                                                                                                  |   | 116,211                                                                                                 |   | 864,018                                                                                                |   | 609,250                                                                                                |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Net      loss before other items                                                         |   | (6,032,103)                                                                                                                             |   | (92,134)                                                                                                |   | (116,211)                                                                                               |   | (864,018)                                                                                              |   | (609,250)                                                                                              |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Other      items                                                                         |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Excess      of consideration over net assets purchased from Rotoblock Inc. (Note      1) |   | (138)                                                                                                                                   |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
| Gain      on disposal of property (Notes 4, 9, 10 and 13)                                |   | 1,384                                                                                                                                   |   | -                                                                                                       |   | -                                                                                                       |   | 1,384                                                                                                  |   | -                                                                                                      |
| Provision      for legal dispute (Note 12 ii)                                            |   | -                                                                                                                                       |   | 72,000                                                                                                  |   | -                                                                                                       |   | 72,000                                                                                                 |   | -                                                                                                      |
| Write-off      of property and equipment                                                 |   | (9,870)                                                                                                                                 |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
| Write-off      of related party receivable                                               |   | (162,204)                                                                                                                               |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Loss      for the period                                                                 |   | (6,202,931)                                                                                                                             |   | (20,134)                                                                                                |   | (116,211)                                                                                               |   | (790,634)                                                                                              |   | (609,250)                                                                                              |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Basic      and diluted loss per common share                                             |   |                                                                                                                                    |   | (0.02)                                                                                                  |   | (0.13)                                                                                                  |   | (0.69)                                                                                                 |   | (0.76)                                                                                                 |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Weighted      average number of common shares used in per share    calculations          |   |                                                                                                                                    |   | 1,237,224                                                                                               |   | 909,326                                                                                                 |   | 1,137,993                                                                                              |   | 806,802                                                                                                |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Comprehensive      loss                                                                  |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Loss      for the period                                                                 |   |                                                                                                                                    |   | (20,134)                                                                                                |   | (116,211)                                                                                               |   | (790,634)                                                                                              |   | (609,250)                                                                                              |
| Foreign      currency translation adjustment                                             |   |                                                                                                                                    |   | -                                                                                                       |   | 6                                                                                                       |   | (47)                                                                                                   |   | 76                                                                                                     |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Comprehensive      loss for the period                                                   |   |                                                                                                                                    |   | (20,134)                                                                                                |   | (116,205)                                                                                               |   | (790,681)                                                                                              |   | (609,174)                                                                                              |
|                                                                                     |   |                                                                                                                                    |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Comprehensive      loss per common share                                                 |   |                                                                                                                                    |   | (0.02)                                                                                                  |   | (0.13)                                                                                                  |   | (0.69)                                                                                                 |   | (0.76)                                                                                                 |

----

----

|                                                                             |   | For      the period from the date of inception on 2 September 2003 to31      January 2010 |   |  For      the three month peroid ended31      January2010 |   | For      the three monthperiod ended31      January2009 |   |  For      the nine month period ended31      January2010 |   |    For      the nine month period ended31      January2009 |
|----------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|
|                                                                             |   | $                                                                                              |   | $                                                                   |   | $                                                            |   | $                                                                  |   | $                                                                              |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Cash      used in operating activities                                           |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Loss      for the period                                                         |   | (6,202,931)                                                                                    |   | (20,134)                                                            |   | (116,211)                                                    |   | (790,634)                                                          |   | (609,250)                                                                      |
| Adjustments      to reconcile loss to net cash used by operatingactivities:      |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Contributions      to capital by related party – expenses (Notes 9 and 13) |   | 375,000                                                                                        |   | 25,000                                                              |   | 25,000                                                       |   | 75,000                                                             |   | 75,000                                                                         |
| Depreciation      (Note 4)                                                       |   | 6,253                                                                                          |   | 121                                                                 |   | 521                                                          |   | 871                                                                |   | 768                                                                            |
| Gain      on disposal of property (Notes 4, 9, 10 and 13)                        |   | (1,384)                                                                                        |   | -                                                                   |   | -                                                            |   | (1,384)                                                            |   | -                                                                              |
| Non-cash      interest                                                           |   | 11,705                                                                                         |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
| Shares      issued for services (Notes 10 and 13)                                |   | 1,536,950                                                                                      |   | 9,343                                                               |   | 69,663                                                       |   | 98,845                                                             |   | 278,407                                                                        |
| Stock-based      compensation (Notes 10 and 13)                                  |   | 2,932,726                                                                                      |   | -                                                                   |   | -                                                            |   | 408,728                                                            |   | 147,446                                                                        |
| Write-off      of property and equipment                                         |   | 9,870                                                                                          |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
| Write-off      of related party receivable                                       |   | 177,204                                                                                        |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
| Changes      in operating assets and liabilities:                                |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| (Increase)      decrease in accounts receivable                                  |   | (207)                                                                                          |   | -                                                                   |   | 3                                                            |   | (24)                                                               |   | 39                                                                             |
| Increase      in accounts payable and accrued liabilities                        |   | 196,084                                                                                        |   | 42,585                                                              |   | 6,000                                                        |   | 167,017                                                            |   | 5,819                                                                          |
| Increase      in provision for legal dispute (Note 12)                           |   | 0                                                                                              |   | (72,000)                                                            |   | -                                                            |   | (72,000)                                                           |   | -                                                                              |
|                                                                             |   | (958,730)                                                                                      |   | (15,085)                                                            |   | (15,024)                                                     |   | (113,581)                                                          |   | (101,771)                                                                      |
| Cash      flows used in investing activities                                     |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Purchase      of equipment (Note 4)                                              |   | (16,778)                                                                                       |   | -                                                                   |   | -                                                            |   | -                                                                  |   | (2,940)                                                                        |
| Purchase      of patents (Note 3)                                                |   | (108,745)                                                                                      |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
|                                                                             |   | (125,523)                                                                                      |   | -                                                                   |   | -                                                            |   | -                                                                  |   | (2,940)                                                                        |
| Cash      flows from used in financing activities                                |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Common      shares issued for cash (Note 10)                                     |   | 1,000,941                                                                                      |   | -                                                                   |   | -                                                            |   | 114,000                                                            |   | 6,475                                                                          |
| Warrants      granted for cash (Note 10)                                         |   | 72,164                                                                                         |   | -                                                                   |   | -                                                            |   | -                                                                  |   | 18,525                                                                         |
| Warrants      exercised                                                          |   | 10,000                                                                                         |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
| Convertible      promissory note payable (Note 6)                                |   | 10,000                                                                                         |   | -                                                                   |   | -                                                            |   | -                                                                  |   | -                                                                              |
| Increase      (decrease) in due to related party (Note 8)                        |   | 622                                                                                            |   | -                                                                   |   | (10)                                                         |   | 71                                                                 |   | (116)                                                                          |
|                                                                             |   | 1,093,727                                                                                      |   | -                                                                   |   | (10)                                                         |   | 114,071                                                            |   | 24,884                                                                         |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Foreign      exchange effect on cash                                             |   | (4,245)                                                                                        |   | -                                                                   |   | 6                                                            |   | (47)                                                               |   | 76                                                                             |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Increase      (decrease) in cash and cash equivalents                            |   | 5,229                                                                                          |   | (15,085)                                                            |   | (15,027)                                                     |   | 443                                                                |   | (79,751)                                                                       |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Cash      and cash equivalents, beginning of period                              |   | -                                                                                              |   | 20,314                                                              |   | 27,223                                                       |   | 4,786                                                              |   | 91,947                                                                         |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |
| Cash      and cash equivalents, end of period                                    |   | 5,229                                                                                          |   | 5,229                                                               |   | 12,196                                                       |   | 5,229                                                              |   | 12,196                                                                         |
|                                                                             |   |                                                                                           |   |                                                                |   |                                                         |   |                                                               |   |                                                                           |

----

----

|                                                                                                                               | Number      of shares issued | Capitalstock | Additional      paid-in capital | Warrants |   Accumulated      comprehensive loss |   Deficit      accumulated during the development stage | Stockholders’      equity |
|------------------------------------------------------------------------------------------------------------------------------------|------------------------------|--------------|---------------------------------|----------|-------------------------------------------------|-------------------------------------------------------------------|---------------------------------|
|                                                                                                                               |                         |         |                            | $        |                                            | $                                                                 |                            | $ |   | $ |   | $ |   | $ |
|                                                                                                                               |                         |         |                            |     |                                            |                                                              |                            |   |   |   |   |   |   |   |
| Balance      at 2 September 2003 (inception)                                                                                       | -                            |         | -                               |     | -                                               |                                                              | -                               |   | - |   | - |   | - |
| Shares issued for      cash                                                                                                        |                         | 140,000      |                            | -        |                                            | 534                                                               |                            | - |   | - |   | - |   | 534 |
| Shares issued for      cash                                                                                                        |                         | 4,000        |                            | -        |                                            | 38,130                                                            |                            | - |   | - |   | - |   | 38,130 |
| Adjustment to number of shares      issued as a result of the acquisition of net assets of Rotoblock Inc.      (Note 1)            | (144,000)                    |         | -                               |     | -                                               |                                                              | -                               |   | - |   | - |   | - |
| Shares      issued in connection with the acquisition of net assets of Rotoblock Inc.      (Note 1)                                |                         | 300,000      |                            | 300      |                                            | (300)                                                             |                            | - |   | - |   | - |   | - |
|          Excess of consideration over net assets    purchased      from Rotoblock Inc. (Note 1) | -                            |         | -                               |     | -                                               |                                                              | -                               |   | - |   | (138) |   | (138) |
|          Foreign currency translation adjustment                                                                    | -                            |         | -                               |     | -                                               |                                                              | -                               |   | (1,918) |   | - |   | (1,918) |
| Net loss for the      period                                                                                                       |                         | -            |                            | -        |                                            | -                                                                 |                            | - |   | - |   | (108,443) |   | (108,443) |
|                                                                                                                               |                         |         |                            |     |                                            |                                                              |                            |   |   |   |   |   |   |   |
| Balance      at 30 April 2004                                                                                                      | 300,000                      |         | 300                             |     | 38,364                                          |                                                              | -                               |   | (1,918) |   | (108,581) |   | (71,835) |
|     Shares      issued for cash ($2.50 per share)                                                              | 200,000                      |         | 200                             |     | 499,800                                         |                                                              | -                               |   | - |   | - |   | 500,000 |
|     Foreign      currency translation adjustment                                                               | -                            |         | -                               |     | -                                               |                                                              | -                               |   | (1,385) |   | - |   | (1,385) |
| Net loss for the      year                                                                                                         |                         | -            |                            | -        |                                            | -                                                                 |                            | - |   | - |   | (306,193) |   | (306,193) |
|                                                                                                                               |                         |         |                            |     |                                            |                                                              |                            |   |   |   |   |   |   |   |
| Balance      at 30 April 2005                                                                                                      | 500,000                      |         | 500                             |     | 538,164                                         |                                                              | -                               |   | (3,303) |   | (414,774) |   | 120,587 |
|     Shares      issued for cash ($13.08 per share)                                                             | 10,963                       |         | 11                              |     | 143,430                                         |                                                              | -                               |   | - |   | - |   | 143,441 |
|     Shares issued      for services rendered ($15.59 per share)                                                     |                         | 48,363       |                            | 48       |                                            | 753,829                                                           |                            | - |   | - |   | - |   | 753,877 |
| Shares      issued for inventory ($14.50 per share)                                                                                |                         | 12,221       |                            | 12       |                                            | 177,192                                                           |                            | - |   | - |   | - |   | 177,204 |
|     Warrants      exercised ($12.50 per share)                                                                 | 800                          |         | 1                               |     | 9,999                                           |                                                              | -                               |   | - |   | - |   | 10,000 |
| Stock-based      compensation                                                                                                      |                         | -            |                            | -        |                                            | 1,901,177                                                         |                            | - |   | - |   | - |   | 1,901,177 |
|     Foreign      currency translation adjustment                                                               | -                            |         | -                               |     | -                                               |                                                              | -                               |   | (950) |   | - |   | (950) |
| Net loss for the      year                                                                                                         |                         | -            |                            | -        |                                            | -                                                                 |                            | - |   | - |   | (2,767,259) |   | (2,767,259) |
|                                                                                                                               |                         |         |                            |     |                                            |                                                              |                            |   |   |   |   |   |   |   |
| Balance      at 30 April 2006                                                                                                      | 572,347                      |         | 572                             |     | 3,523,791                                       |                                                              | -                               |   | (4,253) |   | (3,182,033) |   | 338,077 |
| Shares      issued for cash ($10.50 per share) (Note 10)                                                                           |                         | 2,286        |                            | 2        |                                            | 23,998                                                            |                            | - |   | - |   | - |   | 24,000 |
|     Shares issued      for services rendered ($5.62 per share) (Note 10)                                            |                         | 34,185       |                            | 34       |                                            | 192,031                                                           |                            | - |   | - |   | - |   | 192,065 |
| Contribution      to capital by related parties – services                                                                   |                         | -            |                            | -        |                                            | 100,000                                                           |                            | - |   | - |   | - |   | 100,000 |
| Stock-based      compensation                                                                                                      |                         | -            |                            | -        |                                            | 414,711                                                           |                            | - |   | - |   | - |   | 414,711 |
| Foreign      currency translation adjustment                                                                                       | -                            |         | -                               |     | -                                               |                                                              | -                               |   | (5) |   | - |   | (5) |
| Net      loss for the year                                                                                                         |                         | -            |                            | -        |                                            | -                                                                 |                            | - |   | - |   | (863,582) |   | (863,582) |
|                                                                                                                               |                         |         |                            |     |                                            |                                                              |                            |   |   |   |   |   |   |   |
| Balance      at 30 April 2007                                                                                                      |                         | 608,818      |                            | 608      |                                            | 4,254,531                                                         |                            | - |   | (4,258) |   | (4,045,615) |   | 205,266 |

----

----

|                                                                                            | Number      of shares issued | Capitalstock | Additional      paid-in capital |     Warrants | Accumulated      comprehensive loss |    Deficit      accumulated during the development stage | Stockholders’            equity |
|-------------------------------------------------------------------------------------------------|------------------------------|--------------|---------------------------------|----------------------------------|-------------------------------------|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                                                            |                         |         |                            | $                                |                                | $                                                                       |                                                                                              | $ |   | $ |   | $ |   | $ |
|                                                                                            |                         |         |                            |                             |                                |                                                                    |                                                                                              |   |   |   |   |   |   |   |
| Balance      at 30 April 2007                                                                   |                         | 608,818      |                            | 608                              |                                | 4,254,531                                                               |                                                                                              | - |   | (4,258) |   | (4,045,615) |   | 205,266 |
| Shares issued for cash ($3.38      per share) (Note 10)                                         |                         | 51,600       |                            | 52                               |                                | 174,309                                                                 |                                                                                              |  - |   | - |   | - |   | 174,361 |
|     Warrants      granted                                                   |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | 53,639 |   |   |   |   |   | 53,639 |
|     Shares issued      for services rendered ($2.78 per share) (Notes 10 and 13) |                         | 63,511       |                            | 64                               |                                | 176,446                                                                 |                                                                                              |  - |   | - |   | - |   | 176,510 |
| Contribution      to capital by related parties – services (Notes 9 and 13)               |                         | -            |                            | -                                |                                | 100,000                                                                 |                                                                                              |  - |   | - |   | - |   | 100,000 |
| Stock-based      compensation (Notes10      and 13)                                             |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | 60,664 |   | - |   | - |   | 60,664 |
|          Foreign currency translation adjustment                                 | -                            |         | -                               |                             | -                                   |                                                                    | -                                                                                                 |   | (10) |   | - |   | (10) |
| Net      loss for the year                                                                      |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | - |   | - |   | (576,091) |   | (576,091) |
|                                                                                            |                         |         |                            |                             |                                |                                                                    |                                                                                              |   |   |   |   |   |   |   |
| Balance      at 30 April 2008                                                                   |                         | 723,929      |                            | 724                              |                                | 4,705,286                                                               |                                                                                              | 114,303 |   | (4,268) |   | (4,621,706) |   | 194,339 |
| Shares      issued for cash ($1.94 per share) (Note 10)                                         |                         | 3,333        |                            | 3                                |                                | 6,472                                                                   |                                                                                              |  - |   | - |   | - |   | 6,475 |
| Warrants      granted for cash (Note 10)                                                        |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | 18,525 |   |   |   |   |   | 18,525 |
| Shares      issued for services rendered ($1.87 per share) (Note 10)                            |                         | 190,933      |                            | 191                              |                                | 393,809                                                                 |                                                                                              |  - |   | - |   | - |   | 394,000 |
| Shares      issued for property ($1.25 per share) (Notes 4, 9, 10, and    13)                   |                         | 200,000      |                            | 200                              |                                | 249,800                                                                 |                                                                                              |  - |   | - |   | - |   | 250,000 |
| Shares      issued for debt ($5.00 per share)  (Notes 6 and    10)                    |                         | 2,000        |                            | 2                                |                                | 9,998                                                                   |                                                                                              | - |   | - |   | - |   | 10,000 |
| Contribution      to capital by related parties – services (Notes 10 and 13)              |                         | -            |                            | -                                |                                | 100,000                                                                 |                                                                                              |  - |   | - |   | - |   | 100,000 |
| Stock-based      compensation(Notes      9, 10 and 13)                                          |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              |  147,446 |   | - |   | - |   | 147,446 |
|          Foreign currency translation adjustment                                 | -                            |         | -                               |                             | -                                   |                                                                    | -                                                                                                 |   | 70 |   | - |   | 70 |
| Net      loss for the year                                                                      |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | - |   | - |   | (790,591) |   | (790,591) |
|                                                                                            |                         |         |                            |                             |                                |                                                                    |                                                                                              |   |   |   |   |   |   |   |
| Balance      at 30 April 2009                                                                   |                         | 1,120,195    |                            | 1,120                            |                                | 5,465,365                                                               |                                                                                              | 280,274 |   | (4,198) |   | (5,412,297) |   | 330,264 |
| Shares      issued for property rescinded ($1.25 per share) (Notes 4, 9, 10, and      13)       |                         | (200,000)    |                            | (200)                            |                                | (249,800)                                                               |                                                                                              |   - |   | - |   | - |   | (250,000) |
| Shares      issued for cash ($0.70 per share) (Note 10)                                         |                         | 77,029       |                            | 77                               |                                | 113,923                                                                 |                                                                                              |  - |   | - |   | - |   | 114,000 |
| Shares      issued for services rendered ($0.15 per share) (Notes 10 and      13)               |                         | 190,000      |                            | 190                              |                                | 28,310                                                                  |                                                                                              |  - |   | - |   | - |   | 28,500 |
| Shares      issued for services rendered ($0.17 per share) (Notes 10 and      13)               |                         | 50,000       |                            | 50                               |                                | 8,450                                                                   |                                                                                              |  - |   | - |   | - |   | 8,500 |
| Contribution      to capital by related parties – services (Notes 10 and 13)              |                         | -            |                            | -                                |                                | 75,000                                                                  |                                                                                              | - |   | - |   | - |   | 75,000 |
| Fair      value of warrants issued                                                              |                         | -            |                            | -                                |                                | (38,411)                                                                |                                                                                              | 38,411 |   | - |   | - |   | - |
| Stock-based      compensation    (Notes      9, 10 and 13)                  |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              |  408,728 |   | - |   | - |   | 408,278 |
|          Foreign currency translation adjustment                                 | -                            |         | -                               |                             | -                                   |                                                                    | -                                                                                                 |   | (47) |   | - |   | (47) |
| Net      loss for the period                                                                    |                         | -            |                            | -                                |                                | -                                                                       |                                                                                              | - |   | - |   | (790,634) |   | (790,634) |
|                                                                                            |                         |         |                            |                             |                                |                                                                    |                                                                                              |   |   |   |   |   |   |   |
| Balance      at 31 January 2010                                                                 |                         | 1,237,224    |                            | 1,237                            |                                | 5,402,837                                                               |                                                                                              | 727,413 |   | (4,245) |   | (6,202,931) |   | (75,689) |

----

----

|                                               |   |    For      the period from the date of inception on 2 September 2003 to31      January 2010 |   |        For      the three month period ended31      January2010 |   |        For      the three month period ended31      January2009 |   |        For      the nine month period ended31      January2010 |   |        For      the nine month period ended31      January2009 |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|
|                                               |   | $                                                                                                                |   | $                                                                                                       |   | $                                                                                                       |   | $                                                                                                      |   | $                                                                                                      |
|                                               |   |                                                                                                             |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
| Consulting      fees (Notes 9, 10 and 13)          |   | 964,522                                                                                                          |   | 9,343                                                                                                   |   | 39,320                                                                                                  |   | 98,845                                                                                                 |   | 159,559                                                                                                |
| Depreciation                                       |   | 6,253                                                                                                            |   | 121                                                                                                     |   | 521                                                                                                     |   | 871                                                                                                    |   | 768                                                                                                    |
| Foreign      exchange loss                         |   | 1,545                                                                                                            |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
| Interest                                           |   | 17,635                                                                                                           |   | 45                                                                                                      |   | 93                                                                                                      |   | 912                                                                                                    |   | 205                                                                                                    |
| Investor      relations (Notes 10 and 13)          |   | 239,878                                                                                                          |   | -                                                                                                       |   | 24,197                                                                                                  |   | -                                                                                                      |   | 78,378                                                                                                 |
| Listing,      filing and transfer agent fees       |   | 52,759                                                                                                           |   | 1,025                                                                                                   |   | 1,320                                                                                                   |   | 4,846                                                                                                  |   | 8,075                                                                                                  |
| Management      fees (Notes 9 and 13)              |   | 375,000                                                                                                          |   | 25,000                                                                                                  |   | 25,000                                                                                                  |   | 75,000                                                                                                 |   | 75,000                                                                                                 |
| Office      and sundry                             |   | 66,569                                                                                                           |   | 1,116                                                                                                   |   | 2,504                                                                                                   |   | 6,048                                                                                                  |   | 11,353                                                                                                 |
| Professional      fees                             |   | 450,362                                                                                                          |   | 10,893                                                                                                  |   | 17,580                                                                                                  |   | 43,089                                                                                                 |   | 53,014                                                                                                 |
| Public      relations and shareholder information  |   | 190,846                                                                                                          |   | 482                                                                                                     |   | -                                                                                                       |   | 9,409                                                                                                  |   | 37,033                                                                                                 |
| Rent                                               |   | 79,205                                                                                                           |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
| Research      and development                      |   | 314,256                                                                                                          |   | -                                                                                                       |   | -                                                                                                       |   | -                                                                                                      |   | -                                                                                                      |
| Salaries      and wages                            |   | 178,082                                                                                                          |   | 44,109                                                                                                  |   | -                                                                                                       |   | 178,082                                                                                                |   | -                                                                                                      |
| Stock-based      compensation (Notes 9, 10 and 13) |   | 2,932,726                                                                                                        |   | -                                                                                                       |   | -                                                                                                       |   | 408,728                                                                                                |   | 147,446                                                                                                |
| Travel      and entertainment                      |   | 162,465                                                                                                          |   | -                                                                                                       |   | 5,676                                                                                                   |   | 38,188                                                                                                 |   | 38,419                                                                                                 |
|                                               |   |                                                                                                             |   |                                                                                                    |   |                                                                                                    |   |                                                                                                   |   |                                                                                                   |
|                                               |   | 6,032,103                                                                                                        |   | 92,134                                                                                                  |   | 116,211                                                                                                 |   | 864,018                                                                                                |   | 609,250                                                                                                |

----

----

| 1.   | Nature and Continuance of      Operations |
|----------------|-------------------------------------------|

----

----

| 2.   | Significant      Accounting Policies |
|----------------|--------------------------------------|

Basis of presentation

----

----

----

----

----

----

----

----

----

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In March 2008, the FASB issued new guidance on thedisclosure of derivative instruments and hedging activities.  The newguidance, which is now part of ASC 815, “Derivatives and HedgingActivities” requires qualitative disclosures about objectives andstrategies for using derivatives, quantitative disclosures about fair valueamounts of, and gains and losses on, derivative instruments, and disclosuresabout credit-risk-related contingent features in derivativeagreements.  The new guidance was effective prospectively forfinancial statements issued for fiscal years beginning after 15 November 2008,with early application encouraged.  The adoption of this guidance didnot have a significant impact on the Company’s consolidated financialstatements.

----

----

| 3.   | Patents |
|----------------|---------|

|   |                          |   | Balance      at31      January 2010 |   | Balance      at30      April 2009 |
|--------|-------------------------------|--------|------------------------------------------|--------|----------------------------------------|
|   |                          |   |                                     |   |                                   |
|   |                          |   | $                                        |   | $                                      |
|   | Patent      costs to date     |   | 108,745                                  |   | 108,745                                |
|   | Accumulated      depreciation |   | -                                        |   | -                                      |
|   |                          |   |                                     |   |                                   |
|   |                          |   | 108,745                                  |   | 108,745                                |

| 4.   | Property      and Equipment |
|----------------|-----------------------------|

|   |      |   |   |   | Accumulateddepreciation |                | Net      book value |
|--------|-----------|--------|--------|--------|-------------------------|---------------------|---------------------|
|   |      |   | Cost   |   |                    | 31      January2010 |                | 30      April 2009(Audited) |
|   |      |   |   |   |                    |                |                |   |   |
|   |      |   | $      |   | $                       |                | $                   |   | $ |
|   | Equipment |   | 2,940  |   | 901                     |                | 2,039               |   | 2,402 |
|   | Property  |   | -      |   | -                       |                | -                   |   | 67,874 |
|   | Land      |   | -      |   | -                       |                | -                   |   | 181,250 |
|   |      |   | 2,940  |   | 901                     |                | 2,039               |   | 251,526 |

----

----

| 5.   | Accounts Payable and Accrued      Liabilities |
|----------------|-----------------------------------------------|

| 6.   | Convertible      Promissory NotePayable |
|----------------|-----------------------------------------|

| 7.   | Joint      Venture Agreement |
|----------------|------------------------------|

| 8.   | Due      to Related Party |
|----------------|---------------------------|

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----

| 9.   | Related      Party Transactions |
|----------------|---------------------------------|

| 10.   | Capital      Stock |
|-----------------|--------------------|

|   | During      the year ended 30 April 2008, the Company issued 31,600 private placement      restricted common shares at a price of $2.50 per share for total cash      proceeds of $78,000.  These shares are restricted from trading      for a period of one year as defined by Rule 144 of the United States      Securities Act of 1933. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During      the year ended 30 April 2008, the Company issued 4,000 common shares      valued at $1.00 per share for consulting  services. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

| 1)   | During      the year ended 30 April 2008, the Company issued 20,000 common shares      valued at $2.50 per share for $50,000 in consulting    services. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | During      the year ended 30 April 2008, the Company issued 6,000 common shares      valued at $2.50 per share for $15,000 in public relations      services.  These shares are restricted from trading for a period      of one year as defined by Rule 144 of the United States Securities Act of      1933. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|           |                                                                                                                                                  |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3)   | During      the year ended 30 April 2008, the Company issued 4,000 common shares      valued at $1.00 per share for $4,000 in consulting    services. |

----

----

| 4)                | During      the year ended 30 April 2008, the Company issued 7,600 share purchase      warrants with a fair value of $5,383.  Each share purchase      warrant entitles the holder to purchase an additional common share at a      price of $12.50 up to 6 September 2012. |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                  |
| 5)                     |  During      the year ended 30 April 2008, the Company issued 2,571 common shares      valued at $6.50 per share for $16,710 for consulting      services.                                                                                                                       |
|                        |                                                                                                                                                                                                                                                                                  |
|         6)   |  During      the year ended 30 April 2008, the Company issued 1,684 common shares      valued at $4.50 per share for $8,000 for consulting    services.                                                                                                                          |
|                        |                                                                                                                                                                                                                                                                                  |
|  7)               |  During      the year ended 30 April 2008, the Company issued 589 common shares valued      at $4.50 per share for $2,800 for consulting  services.                                                                                                                              |

| 8)   | During      the year ended 30 April 2008, the Company issued 13,333 units at a price      of $7.50 per unit for total cash proceeds of $100,000.  Each      unit consists of one restricted common share and one-half common share      purchase warrant.  Each whole common share purchase warrant      entitles the holder to purchase an additional common share at a price of      $12.50 per share for a period of five years from the date of offering with      a fair value of $25,793.  As at 31 January 2010, 6,667 of the      share purchase warrants in this series remain      outstanding.  These shares are restricted from trading for a      period of one year as defined by Rule 144 of the United States Securities      Act of 1933. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  9)   | During      the year ended 30 April 2008, the Company issued 6,667 units at a price of      $7.50 per unit for total cash proceeds of $50,000.  Each unit      consists of one restricted common share and one common share purchase      warrant.  Each whole common share purchase warrant entitles the      holder to purchase an additional common share at a price of $12.50 per      share for a period of five years from the date of offering with a fair      value of $22,463.  As at 31 January 2010, 6,667 of the share      purchase warrants in this series remain outstanding.  These      shares are restricted from trading for a period of one year as defined by      Rule 144 of the United States Securities Act of  1933. |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10)   | During      the year ended 30 April 2008, the Company issued 2,000 common shares      valued at $4.00 per share for $8,000 for consulting    services. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11)   | During      the year ended 30 April 2008, the Company issued 2,667 common shares      valued at $3.00 per share for $8,000 for consulting    services. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 12)   | During      the year ended 30 April 2008, the Company issued 20,000 units valued at      $3.00 per unit for consulting services.  Each unit consists of      one restricted common share and one common share purchase      warrant.  Each whole common share purchase warrant entitles the      holder to purchase an additional common share at a price of $7.50 per      share for a period of five years from the date of offering with a fair      value of $60,664.  As at 31 January 2010, 20,000 of the share      purchase warrants in this series remain outstanding.  These      shares are restricted from trading for a period of one year as defined by      Rule 144 of the United States Securities Act of  1933. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 13)   | During      the year ended 30 April 2009, the Company issued 1,000 common shares      valued at $4.00 per common share for $4,000 in consulting      services. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14)   | During      the year ended 30 April 2009, the Company issued 6,400 common shares      valued at $15.00 per common share for $96,000 in investor      relations.  These shares are restricted from trading for a      period of one year as defined by Rule 144 of the United States Securities      Act of 1933. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 15)   | During      the year ended 30 April 2009, the Company issued 16,000 units valued at      $4.00 per common share each for $64,000 as compensation to the chief      executive officer of the company.  Each unit consists of one      restricted common share and one common share purchase      warrant.  Each warrant entitles the holder to purchase one      additional common share of the Company at a cost of $7.50 expiring 12 May      2013 with a fair value of $147,446.  As at 31 January 2010,      16,000 of the share purchase warrants in this series remain      outstanding.  These shares are restricted from trading for a      period of one year as defined by Rule 144 of the United States Securities      Act of 1933 (Notes 9 and 13). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16)   | During      the year ended 30 April 2009, the Company issued 1,333 common shares      valued at $7.50 per common share each for $10,000 for legal      services. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 17)   | During      the year ended 30 April 2009, the Company issued 1,000 common shares      valued at $7.50 per common share for $7,500 in public      relations.  These shares are restricted from trading for a      period of one year as defined by Rule 144 of the United States Securities      Act of 1933. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 18)   | During      the year ended 30 April 2009, the Company issued 3,200 common shares      valued at $7.50 per common share $24,000 in consulting expense to a      related party (Note 9). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 19)   | During      the year ended 30 April 2009, the Company issued 5,000 common shares      valued at $5.50 per common share for $27,500 in consulting to a related      party.  These shares are restricted from trading for a period of      one year as defined by Rule 144 of the United States Securities Act of      1933 (Note 9). |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 20)   | During      the year ended 30 April 2009, the Company issued 3,333 units valued at      $7.50 per unit for total cash proceeds of $25,000.  Each unit      consists of one restricted common share and one common share purchase      warrant.  Each whole common share purchase warrant entitles the      holder to purchase an additional common share at a price of $12.50 per      share for a period of five years from the date of offering with a fair      value of $18,525.  As at 31 January 2010, 3,333 of the share      purchase warrants in this series remain outstanding.  These      shares are restricted from trading for a period of one year as defined by      Rule 144 of the United States Securities Act of  1933. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21)   | During      the year ended 30 April 2009, the Company issued 2,000 common shares      valued at $5.00 per common share for $10,000 in repayment for a      convertible promissory note (Note6). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 22)   | During      the year ended 30 April 2009, the Company issued 2,000 common shares      valued at $3.00 per common share for $6,000 in consulting      expense. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 23)   | During      the year ended 30 April 2009, the Company issued 200,000 shares of common      stock valued at $1.25 per share purchase for land and building from a      related party valued at $250,000 (Notes 4, 9 and 13).  These      shares are restricted from trading for a period of one year as defined by      Rule 144 of the United States Securities Act of 1933.  These      shares were rescinded in the currentperiod. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 24)   | During      the year ended 30 April 2009, the Company issued 5,000 common shares      valued at $1.00 per common share for $5,000 in legal    services. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| 25)   | During      the year ended 30 April 2009, the Company issued 150,000 common shares      valued $1.00 per common share at $150,000 in retainer for consulting      expenses to two related parties.  These shares are restricted      from trading for a period of one year as defined by Rule 144 of the United      States Securities Act of 1933 (Notes 9 and13). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 26)   | During      the nine month period ended 31 January 2010, the Related Party returned to      treasury 200,000 shares of common stock of the Company valued at      $1.25 per common share for a total value of $250,000, related to the      disposal of land and building acquired from a Related Party pursuant to      the Agreement entered into on 24 November 2008.  These shares      were cancelled on 29 July 2009 (Notes 4, 9 and  13). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 27)   | During      the nine month period ended 31 January 2010, the Company issued 6,552      common shares valued at $0.61 per common share for cash of      $4,000.  These shares are restricted from trading for a period      of one year as defined by Rule 144 of the United States Securities Act of      1933. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 28)   | During      the nine month period ended 31 January 2010, the Company issued 13,333      common shares valued at $0.75 per common share for cash of      $10,000.  These shares are restricted from trading for a period      of one year as defined by Rule 144 of the United States Securities Act of      1933. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 29)   | During      the nine month period ended 31 January 2010, the Company issued 190,000      common shares valued at $0.15 per common share for $28,500 in consulting      expense.  Of this amount, $15,935 was expensed during the period      and the remaining $12,565 was classified as prepaid expense which will be      expensed as consulting services in subsequent  periods. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 30)   | During      the nine month period ended 31 January 2010, the Company issued 50,000      common shares valued at $0.17 per common share for $8,500 in consulting      expense.  Of this amount, $4,564 was expensed during the period      and the remaining $3,936 was classified as prepaid expense which will be      expensed as consulting services in subsequent  periods. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31)   | During      the nine month period ended 31 January 2010, the Company issued 50,000      share purchase warrants with a fair value of $48,728.  Each      share purchase warrant entitles the holder to purchase an additional      common share at a price of $0.25 up to 21 July  2014. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32)   | During      the nine month period ended 31 January 2010, the Company issued 200,000      share purchase warrants with a fair value of $360,000.  Each      share purchase warrant entitles the holder to purchase an additional      common share at a price of $0.50 up to 21 July  2014. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| 33)   | During      the nine month period ended 31 January 2010, the Company issued 28,572      units valued at $1.75 consisting of one share and two warrants with an      exercise price of $2.50 per share for total cash proceeds of      $50,000.  These shares are restricted from trading for a period      of one year as defined by Rule 144 of the United States Securities Act of      1933. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 34)   | During      the nine month period ended 31 January 2010, the Company issued 28,572      shares valued at $1.75 for total cash proceeds of      $50,000.  These shares are restricted from trading for a period      of one year as defined by Rule 144 of the United States Securities Act of      1933. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |     |   | Exercise      price |   | Numberof      warrants |   | Remainingcontractual      life (years) |
|--------|----------|--------|---------------------|--------|------------------------|--------|----------------------------------------|
|   |     |   | $                   |   |                   |   |                                   |
|   |     |   |                |   |                   |   |                                   |
|   | Warrants |   | 12.50               |   | 59,200                 |   | 0.95                                   |
|   | Warrants |   | 7.50                |   | 50,000                 |   | 1.85                                   |
|   | Warrants |   | 12.50               |   | 7,600                  |   | 2.61                                   |
|   | Warrants |   | 12.50               |   | 6,667                  |   | 2.98                                   |
|   | Warrants |   | 7.50                |   | 20,000                 |   | 3.17                                   |
|   | Warrants |   | 12.50               |   | 6,667                  |   | 3.19                                   |
|   | Warrants |   | 7.50                |   | 16,000                 |   | 3.31                                   |
|   | Warrants |   | 12.50               |   | 3,333                  |   | 3.43                                   |
|   | Warrants |   | 0.25                |   | 25,000                 |   | 4.46                                   |
|   | Warrants |   | 0.25                |   | 25,000                 |   | 4.48                                   |
|   | Warrants |   | 0.50                |   | 200,000                |   | 4.48                                   |
|   | Warrants |   | 2.50                |   | 57,144                 |   | 4.48                                   |
|   |     |   |                |   |                   |   |                                   |
|   |     |   |                |   | 476,611                |   |                                   |

----

----

|   |                                                                   |   | Number      of warrants |   | Weighted      average exercise price |
|--------|------------------------------------------------------------------------|--------|-------------------------|--------|--------------------------------------|
|   |                                                                   |   |                    |   | $                                    |
|   |                                                                   |   |                    |   |                                 |
|   | Outstanding      and exercisable at 1 May 2008                         |   | 150,134                 |   | 16.93                                |
|   |      Granted                                  |   | 19,333                  |   | 8.50                                 |
|   |      Exercised                                |   | -                       |   | -                                    |
|   |      Expired                                  |   | -                       |   | -                                    |
|   |                                                                   |   |                    |   |                                 |
|   | Outstanding      and exercisable at 30 April 2009                      |   | 169,467                 |   | 15.97                                |
|   |                                                                   |   |                    |   |                                 |
|   | Weighted      average fair value of warrants granted during the year   |   | 8.58                    |
|   |                                                                   |   |                    |   |                                 |
|   | Outstanding      and exercisable at 1 May 2009                         |   | 169,467                 |   | 15.97                                |
|   |      Granted                                  |   | 307,144                 |   | 0.63                                 |
|   |      Exercised                                |   | -                       |   | -                                    |
|   |      Expired                                  |   | -                       |   | -                                    |
|   |                                                                   |   |                    |   |                                 |
|   | Outstanding      and exercisable at 31 January 2010                    |   | 476,611                 |   | 4.08                                 |
|   |                                                                   |   |                    |   |                                 |
|   | Weighted      average fair value of warrants granted during the period |   | 1.87                    |

|   |                         | As      at31      January 2010 |   | As      at30      April 2009(Audited) | As      at30      April 2008(Audited) |
|--------|------------------------------|-------------------------------------|--------|--------------------------------------------|--------------------------------------------|
|   |                         |                                |   |                                       |                                       |
|   | Risk      free interest rate | 1.55%      - 2.36%                  |   | 3.02      % - 3.28%                        | 2.65      % - 3.72%                        |
|   | Expected      life           | 5.0      years                      |   | 5.0      years                             | 5.0      years                             |
|   | Annualized      volatility   | 629%                                |   | 153%      - 158%                           | 119%      - 150%                           |
|   | Expected      dividends      | -                                   |   | -                                          | -                                          |

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| 11.   | Income      Taxes |
|-----------------|-------------------|

|   |                                                            |   | For      the nine month period ended 31      January2010 |   | For      the nine month perid ended 31      January2009 |
|--------|-----------------------------------------------------------------|--------|---------------------------------------------------------------|--------|--------------------------------------------------------------|
|   |                                                            |   | $                                                             |   | $                                                            |
|   | Deferred      tax asset attributable to:                        |   |                                                          |   |                                                         |
|   | Current      operations                                         |   | 276,722                                                       |   | 207,145                                                      |
|   | Contributions      to capital by related party – expenses |   | (26,250)                                                      |   | (50,132)                                                     |
|   | Stock-based      compensation                                   |   | (143,055)                                                     |   | (25,500)                                                     |
|   | Non-deductible      meals and entertainment                     |   | (6,683)                                                       |   | (6,531)                                                      |
|   | Change      in valuation allowance                              |   | (100,734)                                                     |   | (124,982)                                                    |
|   |                                                            |   |                                                          |   |                                                         |
|   | Net      refundable amount                                      |   | -                                                             |   | -                                                            |

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|   |                                   |   | As      at31      January 2010 |   | As      at30      April 2009(Audited) |
|--------|----------------------------------------|--------|-------------------------------------|--------|---------------------------------------|
|   |                                   |   | $                                   |   | $                                     |
|   |                                   |   |                                |   |                                  |
|   | Net      operating loss carry forward  |   | 2,532,788                           |   | 2,244,976                             |
|   |                                   |   |                                |   |                                  |
|   | Statutory      federal income tax rate |   | 35%                                 |   | 35%                                   |
|   | Effective      income tax rate         |   | 0%                                  |   | 0%                                    |
|   |                                   |   |                                |   |                                  |
|   | Deferred      tax asset                |   | 885,476                             |   | 785,742                               |
|   | Less:      Valuation allowance         |   | (885,476)                           |   | (785,742)                             |
|   |                                   |   |                                |   |                                  |
|   | Net      deferred tax asset            |   | -                                   |   | -                                     |

| i.   | On      15 November 2007, the Company filed its intention to register 100,000      common shares of the Company to be covered under S8 Registration for      future issuances to any and all consultants, employees, attorneys,      officers and directors of the Company at a proposed maximum offering price      of $4.50 per common share (Note13). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.   | The      Company is engaged in a dispute with a former director of the      Company for services previously rendered and a related provision for      loss of $72,000 was accrued in the financial statements for the year ended      30 April 2009. The Company continues to defend its position to the fullest      extent possible and reversed its provision for loss of $72,000 during the      nine month period ended 31 January2010. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii.   | The      Company is committed to issuing 25,000 shares valued at $3,750 pursuant to      the one-year consulting agreement for consulting  services. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

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| iv.   | The      Company entered into an employment agreement with the corporate secretary      for a salary of $50,000 per annum beginning 1 July 2009.  No      salaries have been paid and $29,452 has been recorded in accrued      liabilities. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| v.   | The      Company entered into an employment agreement with the chief executive      office for a salary of $125,000 per annum and one time signing bonus of      $75,000 beginning 1 July 2009.  No salaries have been paid and      $148,630 has been recorded in accrued  liabilities. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              | For      the period from the date of inception on 2 September 2003 to31      January2010 |  For      the three month period ended31      January 2010 |   For      the three month period ended31      January 2009 |  For      the nine month period ended31      January 2010 |   For      the nine month period ended31      January 2009 |
|---------------------------------------------------|------------------------------------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------------|
|                                              | $                                                                                        | $                                                                    | $                                                                          | $                                                                   | $                                                                         |
| Cash      paid during the period for interest     | 11,362                                                                                   | -                                                                    | -                                                                          | -                                                                   | -                                                                         |
| Cash      paid during the period for income taxes | 1,790                                                                                    | -                                                                    | -                                                                          | -                                                                   | -                                                                         |

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Item 1A. Risk Factors 

|     |   | Exercise      price$ |   | Numberof      warrants |   | Remainingcontractual      life (years) |
|----------|--------|----------------------|--------|------------------------|--------|----------------------------------------|
|     |   |                 |   |                   |   |                                   |
| Warrants |   | 12.50                |   | 59,200                 |   | .95                                    |
| Warrants |   | 7.50                 |   | 50,000                 |   | 1.85                                   |
| Warrants |   | 12.50                |   | 7,600                  |   | 2.61                                   |
| Warrants |   | 12.50                |   | 6,667                  |   | 2.98                                   |
| Warrants |   | 7.50                 |   | 20,000                 |   | 3.17                                   |
| Warrants |   | 12.50                |   | 6,667                  |   | 3.19                                   |
| Warrants |   | 7.50                 |   | 16,000                 |   | 3.31                                   |
| Warrants |   | 12.50                |   | 3,333                  |   | 3.43                                   |
| Warrants |   | 0.25                 |   | 25,000                 |   | 4.46                                   |
| Warrants |   | 0.25                 |   | 25,000                 |   | 4.48                                   |
| Warrants |   | 0.50                 |   | 200,000                |   | 4.48                                   |
| Warrants |   | 2.50                 |   | 57,144                 |   | 4.48                                   |
|     |   |                 |   |                   |   |                                   |
|     |   |                 |   | 476,611                |   |                                   |

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|                                                                   |   | Number      of warrants |   | Weighted      average exercise price |
|------------------------------------------------------------------------|--------|-------------------------|--------|--------------------------------------|
|                                                                   |   |                    |   | $                                    |
|                                                                   |   |                    |   |                                 |
| Outstanding      and exercisable at 1 May 2008                         |   | 150,134                 |   | 16.93                                |
|      Granted                                  |   | 19,333                  |   | 8.50                                 |
|      Exercised                                |   | -                       |   | -                                    |
|      Expired                                  |   | -                       |   | -                                    |
|                                                                   |   |                    |   |                                 |
| Outstanding      and exercisable at 30 April 2009                      |   | 169,467                 |   | 15.97                                |
|                                                                   |   |                    |   |                                 |
| Weighted      average fair value of warrants granted during the year   |   | 8.58                    |
|                                                                   |   |                    |   |                                 |
| Outstanding      and exercisable at 1 May 2009                         |   | 169,467                 |   | 15.97                                |
|      Granted                                  |   | 307,144                 |   | 0.63                                 |
|      Exercised                                |   | -                       |   | -                                    |
|      Expired                                  |   | -                       |   | -                                    |
|                                                                   |   |                    |   |                                 |
| Outstanding      and exercisable at 31 January 2010               |   | 476,611                 |   | 4.08                                 |
|                                                                   |   |                    |   |                                 |
| Weighted      average fair value of warrants granted during the period |   | 1.87                    |

|                         | As      at31      January 2010 |   | As      at30      April 2009      (Audited) | As      at30      April 2008      (Audited) |
|------------------------------|-------------------------------------|--------|--------------------------------------------------|--------------------------------------------------|
|                         |                                |   |                                             |                                             |
| Risk      free interest rate | 1.55%      - 2.36%                  |   | 3.02      % - 3.28%                              | 2.65      % - 3.72%                              |
| Expected      life           | 5.0      years                      |   | 5.0      years                                   | 5.0      years                                   |
| Annualized      volatility   | 629%                                |   | 153%      - 158%                                 | 119%      - 150%                                 |
| Expected      dividends      | -                                   |   | -                                                | -                                                |

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