# UNITED STATES SECURITIES AND
EXCHANGE COMMISSION WASHINGTON, D.C. 20549

# FORM 20-F

# (Mark One)

|____ | REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | ----------------------------------------------------------------------------------------------

# OR

|X | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
|- | --------------------------------------------------------------------------------------------------------------------------------

# OR

|____ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- | ----------------------------------------------------------------------------------------

# OR

|____ | SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of event requiring this shell company report _______________________
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

# For the transition
period from ___________________________ to ___________________________

Commission file number 000-1157

NEW WORLD BATTERIES,
INC.  (Exact name of Registrant as specified in its charter)

(Translation of
Registrant's name into English)

British Columbia,
Canada(Jurisdiction of incorporation or organization)

11718-232B Street,
Maple Ridge BC, Canada V2X 7Z2 (Address of principal
executive offices)

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

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

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

Common
(Title of Class)(Title of Class)

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

(Title of Class)

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|SEC 1852 (6-04) | Persons who respond to the collection of information contained inthis
form are not required to respond unless the form displays acurrently valid OMB
control number.
|--------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Indicate
the number of outstanding shares of each of the issuers classes of capital or
common stock as of the close of the period covered by the annual report.      8,635,173 as
of December 31, 2005

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

XYes ____ No

Indicate by check mark which
financial statement item the registrant has elected to follow.

XItem 17 _____
Item 18

(APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.

____ Yes           ____
No

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

# A.   Directors and Senior
Management.

|Name and Address                                                                                                                                                                                                                                                                                 | Position/Function                                                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------
|Patrick O'Brien       
11718-232B Street     
Maple Ridge BC, Canada
V2X 7Z2
Robert O'Brien        
2614 Queenswood Dr.
Victoria, BC, Canada
V8N 1X5
Daniel O'Brien        
2614 Queenswood Dr.
Victoria, BC, Canada
V8N 1X5
George Devlin         
649 Humboldt St
Victoria, BC, Canada
V8W 1A7 | President, Chief Executive Officer
Chief Financial Officer, Treasurer, Director
Chief Science Officer, Director
Director
Secretary, Director

# B.         Advisors NA

# C.         Auditors.

| | Cinnamon,
Jang, Willoughby & Company                            Chartered Accountants
                           Metro Tower II                            Suite 900 4720
Kingsway                            Burnaby, BC, Canada                            V5H 4N2
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 2.           Offer
Statistics and Expected Timetable       NA

# Item 3.           Key
Information

|A. | Selected
Financial Data
As
of December 31, 2005 Presented in Cdn. dollars
|-- | -------------------------------------------------------------------------

|                                                          | 
|--------------------------------------------------------- | 
|Net sales/operating revenues                              | 
|Income (loss) from continuing operations                  | 
|Income (loss) from continuing operations per common share | 
|Total assets                                              | 
|Net assets                                                | 
|Capital stock                                             | 
|Adjusted number of shares                                 | 
|Dividends declared                                        | 

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# B.   Capitalization and
Indebtedness

New World Batteries is authorized to
issue an unlimited number of shares of common stock. As of December 31, 2005 and as of
May 30, 2006, there are 8,635,173 shares of Class A common stock outstanding of
which 4,000,000 shares were issued to Dr. Robert OBrien and Daniel OBrien for
$4 and the pre-incorporation organization and business plan of New World Batteries and
3,500,000 were sold to the founders of New World Batteries for $0.10 Cdn., per share upon
incorporation. 1,075,172 shares were sold in a private placement closed on October 31,
2004 at $0.25 per share and 60,000 shares were sold at $0.25 per share in January 2005.
New World Batteries has $5,500 Cdn., of indebtedness as of fiscal year ended December 31,
2004.

C.  
          Reasons for the offer and use of proceeds.    NA

# D.   Risk Factors

An investment in New World
Batteries common stock involves a high degree of risk. You should carefully consider
the risks described below and other information in this prospectus. If any of the
following risks occur, New World Batteries business, operating results and financial
condition could be seriously harmed. The trading price of New World Batteries common
stock could decline due to any of these risks, and you could lose all or part of your
investment.

We have a limited operating
history for investors to evaluate.

We were incorporated in August 2004
as New World Batteries, Inc. Accordingly, we have a very limited operating history on
which you can evaluate our business and prospects. You must consider the risks and
uncertainties frequently encountered by early stage companies in new and rapidly evolving
markets.

We had a loss for the fiscal year
ended December 31, 2005 and may continue to have losses in the future that may impair the
value of an investment in the shares.

During the fiscal year ended December
31, 2005 we incurred a loss of $74,503Cdn. This loss resulted primarily from significant
expenditures in market development activities in anticipation of creating future revenue.
If our revenue growth is slower than we anticipate or our operating expenses exceed our
expectations, it may take an unforeseen period of time to achieve or sustain profitability
or we may never achieve or sustain profitability.

We are marketing new technologies
that have not been accepted into the marketplace.

We have just begun marketing our
battery technology. Risks involved in introducing these new products include proving our
product effectiveness, overcoming sales resistance, and competition from existing or
emerging sources. Mature industries tend to be slow to change production methods even in
the face of significant technological advances and this resistance to change could impede
our growth.

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Products using our technology will
be competing against well-established brand names.

When licensed to battery
manufacturers, our battery technology will be competing against long established brand
names and battery technology. Our licensees ability to compete will depend upon
developing brand recognition for our technology and the manufacturers distribution
methods while competitors will also have well-established brands and distribution methods.
Such competition among battery manufacturer giants using competing technology could
substantially limit our potential market and ability to profit from licensing of our
technology.

# Dependence on key
personnel could adversely affect growth.

We are, to a significant extent,
dependent on the skills of certain key personnel, including specifically the inventor,
Doctor Robert OBrien. Currently there is no key man insurance. Loss of the services
of any of the companys present key personnel or the inability to attract and retain
needed additional personnel could have a materially adverse effect upon New World
Batteries.

We may not be able to protect and
enforce our patents and intellectual property.

We rely or may in the future rely on a
combination of patent, trademark, trade secret and copyright law and contractual
restrictions to protect the proprietary aspects of our technology and business. These
legal protections afford only limited protection for our intellectual property and trade
secrets. Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy aspects of our proprietary technology or otherwise obtain and use
information that we regard as proprietary.

We have filed for U.S. patent
applications for our patents. However we have not filed any trademarks. It is also
possible that competitors or others will create and use products in violation of our
patents and adopt service names similar to ours. Such patent infringement could have a
material, adverse effect on our business. Adopting similar names and trademarks by
competitors could lead to customer confusion. Any claims or customer confusion related to
our trademarks could negatively affect our business.

Litigation may be necessary to
enforce our intellectual property rights and protect our trade secrets. If third parties
prepare and file applications in the United States, or other countries that claim
trademarks used or registered by us, we may oppose those applications and be required to
participate in proceedings before the regulatory agencies who determine priority of rights
to the trademarks. Any litigation or adverse priority proceeding could result in
substantial costs and diversion of resources and could seriously harm our business and
operating results.

Finally, to the extent that we
operate internationally, the laws of many countries may not protect our proprietary rights
to as great an extent as do the laws of the United States. Many countries have a
first-to-file trademark registration system. As a result, we may be prevented
from registering or using our trademarks in certain countries if third parties have
previously filed applications to register or have registered the same or similar
trademark. Our means of protecting our proprietary rights may not be adequate, and our
competitors could independently develop similar technology.

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We may face product liability for
the products we manufacture and sell /Lack of Insurance.

As a licensee markets products using our
technology for use by consumers, we may become liable for any damage caused by the
licensees products when used in the manner intended. Any such claim of liability,
whether meritorious or not, could be time-consuming and result in costly litigation. We do
not maintain general liability insurance. Any imposition of liability could harm our
business.

# Additional investment is
required or growth may not be possible.

Our operations have not generated
positive cash flow since the inception of the Company in 2004. We have funded our
operations through the issuance of common stock. Our ability to continue to operate until
our cash flow turns positive may depend on our ability to continue to raise funds through
the issuance of equity or debt. If we are not successful in raising additional funds, we
might have to significantly scale back or delay our growth plans, or possibly cease
operations altogether. Any reduction or delay in our growth plans could materially
adversely affect our ability to compete in the marketplace, take advantage of business
opportunities and develop or enhance our products.

Corporate growth will place
additional demands and may create new challenges beyond the abilities of the present team.
The effective management of growth may require the hiring of additional qualified
management personnel skilled in sales, operations, and software development and marketing,
human resources and business development. Consequently the inability to attract, integrate
and retain appropriate personnel could have a material adverse effect on the
companys business, results of operations and prospects.

# Currency exchange risk.

We will operate in both U.S. and
Canadian currency. Fluctuations in currency exchange may adversely affect the results of
our business operations and capital requirements.

The lack of a public market for
our common stock may cause an investor to have difficulty reselling the shares.

Our common stock is not presently
listed for trading on any exchange or market. Investors may have to indefinitely hold
their shares and may have difficulty selling their shares.

Investors in our common stock may
experience immediate and substantial dilution as a percentage of their holdings.

The net tangible book value of our
common stock at December 31, 2005 was $0.06 per share based on 8,635,173 shares
outstanding. Investors paying greater than such amount will experience immediate and
substantial dilution.

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We do not intend to pay dividends
for the foreseeable future which may limit or eliminate any return on investment.

We have not paid a cash dividend to
the current shareholders and have not projected the payment of dividends to shareholders
in future as any earnings will be retained for use in developing and expanding our
business. Further, the actual amount of any future dividends will remain subject to the
discretion of the board of directors. As result, an investors return on investment
will be dependent upon the establishment of a public market for our common stock and
market prices sufficient to provide a profit, neither of which we can assure will occur.

Our common stock may be classified
as a Penny Stock which could adversely affect an investors ability to
sell the shares and the available price for the shares when sold.

We believe that our common stock
would be characterized as penny stock under U.S. Securities and Exchange
Commission regulations. As such, broker-dealers dealing in our common stock will be
subject to the disclosure rules for transactions involving penny stocks which require the
broker-dealer to determine if purchasing our common stock is suitable for a particular
investor. The broker-dealer must also obtain the written consent of purchasers to purchase
our common stock. The broker-dealer must also disclose the best bid and offer prices
available for our stock and the price at which the broker-dealer last purchased or sold
our common stock. These additional burdens imposed upon broker-dealers may discourage them
from effecting transactions in our common stock, which could make it difficult for an
investor to sell their shares.

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# Item 4.   Information on
the Company

# A.   History and
Development of New World Batteries, Inc.

New World Batteries, Inc., which is
referred to as NWB, or we, was formed as a British Columbia, Canada corporation in August
of 2004 for the purpose of commercializing of patents and products developed by Dr. Robert
OBrien relating to the development of electrochemical technologies that improve the
capacity of rechargeable batteries, capacitance and discharge parameters of
supercapacitors, and the processes of electrorefining, electroplating and
electromachining. The basic science of the technology was discovered, reported in the
scientific literature, and patented during Professor Robert OBriens career in
electrochemical research. In September 2004, Dr. Robert OBrien granted NWB, an
exclusive license to use patents and related technology and research.

Upon formation of the corporation,
3,000,000 shares of Class A common stock were issued to Dr. Robert OBrien and
1,000,000 shares were issued to Daniel OBrien for $4 and in consideration of their
efforts in the pre-incorporation organization of NWB and creation of its business plan.

The founders were also sold the
following shares at $0.10 Cdn., per share: 1,000,000 shares to Dr. Robert OBrien;
1,000,000 shares to Daniel OBrien; 1,000,000 shares to George Devlin and 500,000
shares to Dr. Patrick OBrien, totaling $350,000 Cdn.

By private placement closed on
October 31, 2004, NWB sold 1,075,172 shares of common stock at $0.25 per share raising a
total of $268,793. In January 2005, an additional 60,000 shares were sold at $0.25 per
share raising a total of $15,000.

# B.   Business Overview

The Following Glossary of
Technical Terms will be used in evaluating NWBs technology.

Atoms The smallest uncharged
particle making up all common materials. It has a nucleus and electrons in orbit around
the nucleus.

BatteryA group of cells
joined together to make an electrical storage device containing more energy or a higher
voltage.

Battery Chemistry Rechargeable
batteries are based on different chemicals on the positive and negative electrical
collector plates. The common ones are Lead-acid, Nickel-Cadmium (NiCd), Nickel-metal
hydride (NiMH), and Lithium. Each one has its own particular strengths and weaknesses with
respect to cost, weight, voltage, durability etc.

Cell The basic electrical
storage unit with at least one positive and one negative plate, electrolyte and a casing.
Often multiple cells are joined together to increase the storage capacity or voltage (a
battery).

Electrical collector plates
(electrodes) The active materials from each battery chemistry are pasted on the plates
and form the active part of the cell. Electrons travel from the plates via the external
circuit to the opposite plate.

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Electromagnet These magnets
are powered by electricity running through a coil of wire inducing a magnetic field. These
magnets are dependent on the electricity to generate a magnetic field.

Electrochemical process With
respect to NWB technology, it refers to the exchange of electrons from one material to
another.

Electrolyte Each rechargeable
cell requires a medium through which charge passes to complete the electrical circuit. NWB
technology specifically targets and reduces the significant resistance present in the
electrolyte. Often the electrolyte is water with either an acid or base added.

Electrons One of the basic
building blocs of an atom carrying a negative charge and orbiting the center or nucleus of
the atom.

Fuel cell These devices use a
variety of different fuels to produce electricity.

Hybrid electric car This
vehicle combines a battery with an internal combustion engine to markedly improve city
driving fuel consumption and reducing green house gas emissions.

Internal resistance Inherent
in all cells is a resistance associated with the wiring and with the electrolyte. Because
the metal used to wire the cells has a very low resistance, the majority of the resistance
resides in the electrolyte.

Ion This is a particle with a
charge. When copper metal (atomic copper) loses an electron it becomes a positively
charged ion with very different characteristics than its parent metal including the
ability to dissolve in water.

Paramagnetic ion This special
type of ion has one or more unpaired electrons and when dissolved in water, is influenced
by a magnetic field.

Permanent magnet These magnets
continuously generate a magnetic field and are not dependent on electricity. Fridge
magnets are an example. The magnetizer uses very powerful permanent magnets to induce a
magnetic field in the targeted electrical collector plates.

Reciprocating ball screw
gantry This is a mechanical slide used in the automatic assembly of cars and other
products. The magnetizer uses two slides to bring the permanent magnets rapidly together
like two trains about to have a head on collision but stop suddenly just before they
collide. The slides then return to the start position.

Supercapacitor This is an
electrical storage device that stores charge on metal plates as opposed to chemicals. It
is characterized by its ability to be rapidly charged and discharged.

# Operations and Principal
Activities

NWB intends to license the
OBrien Magnetizer and the magnetic stirring process for rechargeable NiCd and NiMH,
lead-acid, zinc-air and lithium-based batteries to industrial and/or consumer battery
manufacturers. Similarly, NWB intends to sell licenses on its patented magnetic
supercapacitor to use in combination with magnetized rechargeable cells and batteries,
with fuel cell technologies, or as a part of standard electrical systems. Finally,
magnetized electroplating, electromachining, and electrowinning processes will be
developed and licenses sold. As of February 2005, NWB does not have any licensing
agreements with third parties.

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# NWBs Technology:
One principle, Many Applications

The most important part of the
technology is the stirring effect in the electrolyte that occurs when an electrochemical
cell experiences a properly positioned magnetic field. This stirring effect reduces the
internal resistance, which is the major source of energy loss in electrochemical cells and
is applicable to energy storage devices such as batteries and supercapacitors and to
industrial processes such as electrowinning. Less energy is required to overcome this new
lower resistance which leaves more energy available to power an application (ex. cell
phone) or to lower industrial energy use(electrowinning). To increase the effect,
paramagnetic ions are added. This principle was discovered, published in peer reviewed
scientific journals, and patented by Dr. Robert OBrien PhD, P.Eng, and Professor
Emeritus at the University of Victoria, BC, Canada.

# The OBrien
Magnetizer

The need for a method to magnetize
the electrical collector plates (electrodes) led to the development and patenting of the
OBrien Magnetizer. The OBrien Magnetizer is a rapid and efficient magnetizer
as compared with electromagnets. The prototype has powerful permanent magnets on a double
reciprocating ball screw gantry that move rapidly together coming to a halt close to the
electrical collector plates before rapidly returning to the starting position. The
magnetic fields of the electrons in the electrical collector plates are pounded into
alignment under the magnetizers influence much as a carpenter pounds a nail causing
the plates to also become permanent magnets. The prototype is now functional and is
reaching terminal speeds in excess of 1 metre/second.

# Batteries

NWB technology applies to all of the
common battery chemistry types, but especially to the NIMH and NiCd. By increasing the
energy available, the application being powered will run longer and better handle power
spikes. In addition, recharging the cell should take less energy because the internal
resistance, now minimized, takes its toll both during charge and discharge. NWB also
believes that because the stirring process also provides a smoother surface and reduced
heating on the electrical collecting plates, the cell should have a longer useful life.

These
rechargeable batteries are used to power a wide range of electrical devices including:
hybrid electric cars, cell phones, laptop computers, medical devices, emergency systems,
power generation and solar power equipment, etc. The value of the battery industry is in
the order of 14 billion dollars per year. This is the current focus of NWB and we are
working hard on developing a reliable prototype. A large multinational battery maker is
working with us on this project.

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# Supercapacitors

Lower internal resistance allows
supercapacitors to be charged and discharged more quickly, which equates to more power
storage capability. Our supercapacitor patent captures the same principal of magnetic
stirring of electrolytes as outlined above for batteries.

The planned NWB supercapacitor
utilizes the same magnetic stirring technology as described above, and can be thought of
as a high output, short draw electrical storage device. Engineering studies have
determined that both batteries and fuel cells work best under steady, low power draw
situations. It is also accepted that unassisted fuel cell and battery-powered vehicles
cant match the performance (acceleration and range) of internal combustion engines,
which is a major obstacle to obtaining significant market share of new vehicle sales. When
the magnetized supercapacitor is used in conjunction with fuel cells and batteries, the
performance should increase markedly. Under average steady speed driving conditions, the
fuel cell or battery alone would provide the engine with acceptable power. Should a hill
or a passing situation be encountered, the magnetized supercapacitor would be triggered by
the accelerator pedal and provide a short term burst of electricity rapidly accelerating
the vehicle. Once the driving conditions have returned to normal, the fuel cell or battery
recharges the magnetized supercapacitor while powering the vehicle. The supercapacitor
industry has a yearly value of 10 billion dollars.

# Electrowinning

There are two basic methods for
separating the valuable metals from the rock in industrial mining operations:
electrowinning and smelting. Electrowinning electrolyzes finely crushed rock in an acid
bath. This causes the copper or other metal of interest to adhere to the positive plate
where it can be harvested. Energy costs are a major factor in the total cost of the
process. NWB technology is expected to significantly reduce those energy costs.
Electrowinning also results in a better quality end product than smelting.

Smelting requires the expensive
transport of the rock to a smelter where very high temperatures melt the metals separating
them from the waste rock. Not only is smelting energy intensive, smoke stack emissions
have resulted in costly environmental damage to mining towns such as Trail, BC and
Sudbury, Ontario. In addition, the smelting process makes the recovery of the precious
metals (platinum or gold for example) that are normally present in small amounts more
difficult. Precious metals have become so valuable that their recovery can significantly
improve a mining companys bottom line.

A magnetically enhanced
electrowinning cell has been designed and is expected to be ready for initial tests in the
next few months.

# Electroplating

Like electrowinning, electroplating
uses electrolysis to make metal ions attach themselves to the positive plate which in this
case, is a product for which a metal covering is desired. The magnetic stirring technology
should reduce electrical energy requirements and improve the quality of the plating by
preventing localized buildups of metal atoms which form fragile metal branches on the
plating surface. Electroplating will be proven in the same prototype as electrowinning.

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# Electromachining

Electromachining also uses
electrolysis as in electrowinning and electroplating. NWB technology benefits should
include sharper edges and better plating within the holes of computer breadboards
improving the reliability of electrical contacts. It is anticipated that the reliability
and longevity of the computer as a whole will be improved with NWB technology. This
application is in the early concept stage of development.

# Patents

NWB holds an exclusive license from
Dr. Robert OBrien on the following patents:

US patent # 6,194,093(Magnetized
Current Collector Plates with a Magnetic Shielding Means);

US patent # 6,741,440 (Mechanically
Pulsed Magnetizer Kit the OBrien Magnetizer)

US patent # 6,556,424 (Supercapacitor
with Magnetized Parts, the supercapacitor)

US patent # 5,051/Canada 1,335,442
(Spacer for electrochemical Apparatus)   US patent # 6,836,098 (Battery Charging
Method Using Supercapacitors in Two Stages)

# Competition

NWB knows of only one other company,
Active Grid Technology Ltd., offering an electrolyte stirring process for batteries. Their
technique utilizes ultrasound and appears to have some promise. In the past this method,
along with agitation and electrolyte jetting, has failed to improve any battery parameter.
They are also further along the development path than NWB, but their technology appears to
be more limited in both its scope and effectiveness. Our belief in a relatively open
market for licensing our technology stems from the review of trade magazines, Internet
searches, Dr. Robert OBriens close association with the electrochemical
industry over decades, interest by large manufacturers, and the success of our US patent
applications. This also appears to be true for the electrowinning, supercapacitor, and
electroplating technologies.

There will be, however, many
manufacturers who will not license our technology and continue to sell competing products
with strong market share positions, financial strength, research laboratories, and
long-term relationships with their customers.

Currently there are other types of
electrochemical cells less easily adaptable to our technology currently marketed including
lithium-polymer and lead acid modalities that have advantages and disadvantages with
respect to even enhanced (magnetized) nickel cadmium or nickel metal hydride cells. In
addition, primary (non-rechargeable) cells continue to be popular with consumers. For
example the lead acid battery industry continues to dominate appropriate applications
based on purchase price and a long history. Currently our application to lead acid and
lithium cells is in a primitive state requiring more research effort. The lithium cells,
while expensive, are unmatched in their capacity/weight/size and memory characteristics
and are gaining market share in such devices as cell phones.

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# Government Regulations
and Legal Uncertainties

The technology does not add any new
risk to the use of rechargeable batteries, supercapacitors, etc. to either people or the
environment. This is not to say that there might not be new regulations in the future that
could very seriously impact the ability of the company to license its technology. Both
lead and cadmium are serious environmental toxins in their ionized form and could be
subject to regulatory sanction in the future.

# Employees

As of December 31, 2005 and May 30,
2006, NWB only has one employee, its president, Patrick OBrien.

# C.   Organizational
Structure NA

# D.   Property, Plants and
Equipment

NWB rents its office facility located
at the residence of its President in Maple Ridge, BC, Canada. A monthly fee of $300.00 is
paid as rent for the office which includes internet cable, fax line, and utilities. No
fees are paid for the use of computer equipment, or officer vehicle within normal
reasonable use.

# Item 5.  Operating and
Financial Review and Prospects

Except for the historical information
contained herein, the following discussion contains forward-looking statements that are
subject to risks and uncertainties. Actual results may differ substantially from those
referred to herein due to a number of factors, including but not limited to risks
described in the sections entitled Risk Factors, Competition and elsewhere in this
registration statement.

# Operating Results

As
NWB was formed in August 2004 and its operations to date have only been its organization
and an initial private placement of securities, NWB has not had any revenues. It is
anticipated that revenues will be derived from licensing fees for the use of its
technology and royalties from the sale of products utilizing the technology. As of May
2006, NWB does not have any licensing agreements with third parties.

NWB does not anticipate that
inflation or currency exchange fluctuations in either the United States or Canada will
have any significant impact on its operating results. NWB also does not believe that any
governmental economic, fiscal, monetary or political policies or factors have materially
affected or could materially affect, directly or indirectly NWBs operations or
investments by host country shareholders.

# Liquidity and Capital
Resources

At present, NWB is not producing
revenues and its main source of funds has been the sale of its equity securities. NWB had
$173,790 Cdn., in cash and $300,602 Cdn., in short term investments as of December 31,
2005 compared to $409,348 Cdn., in cash and $139,094 Cdn., in short term investments as of
December 31, 2004. It anticipates that this cash will be sufficient for at least
twenty-four months. NWB also had a scientific and research investment tax credit $64,163
Cdn., and prepaid expenses of $0 Cdn compared to a scientific and research investment tax
credit $33,189 Cdn., and prepaid expenses of $5,649 Cdn., as of December 31, 2004.

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# Research and Development

NWBs research and development
objective is to develop a reliable prototype battery to demonstrate the technology using
facilities and resources at the disposal of Dr. Patrick OBrien. NWB believes that
Dr. Robert OBrien has expended substantial personal resources on research and
development over the past three years. However no amount of research and development
expense related to Dr. Robert OBriens personal expenditures is reflected on
NWBs financial statements as Dr. Robert OBriens expenditures could not
be audited with necessary certainty.

# Trend Information

Due the lack of operating history and
revenue, NWB is unable to identify any trends in its operations.

# Off Balance Sheet
Arrangements

NWBs liquidity is not dependent
upon off balance sheet transactions. For the period ended December 31, 2005, NWB did not
engage in any off balance sheet transactions.

# Contractual Obligations

For the period ended December 31,
2005 and as of May30, 2006, NWB had no contractual obligations other than its
employment agreement with its president and non-disclosure/non-competition agreements
entered into to permit third party evaluation of the technology. As of May 30, 2006,
 two such non-disclosure/non-competition agreements have been entered into.

# Item 6.   Directors,
Senior Management and Employees

The Directors and Executive Officers
of New World Batteries, Inc., are as follows:

|Name                                                                                          | Age            | Position/Function                                                                                                                           
|--------------------------------------------------------------------------------------------- | -------------- | --------------------------------------------------------------------------------------------------------------------------------------------
|Dr. Patrick O'Brien
                   
Dr. Robert O'Brien 
Daniel O'Brien     
George Devlin | 43
  
84
49
66 | President, Chief Executive Officer
Chief Financial Officer, Treasurer, Director
Chief Science Officer, Director
Director
Secretary, Director

The directors serve until their
successors are elected by the shareholders. Vacancies on the board of directors may be
filled by appointment by the majority of the continuing directors.

14

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# Business Experience

# 

Dr. Patrick OBrien:Dr.
Patrick OBrien is President, CEO and a Director of NWB. His
responsibilities include coordinating strategy, planning, and product
development. Dr. OBrien devotes substantial time to the affairs of NWB,
though he continues to practice veterinary medicine on an occasional basis. Dr.
OBrien studied at the University of Victoria in the Chemistry Department
for the first two years of the Honors Chemistry Program and was awarded numerous
scholarships including the medal for the top student in the program in 1983. Due
to his high grade point average and related experience, he was fast tracked into
the Western College of Veterinary Medicine, graduating with distinction in
1987(at the age of 24). In 2003, Dr. Patrick OBrien sold his very
successful large animal practice in Courtenay, BC, which he founded in 1992.



Professor Robert N.
OBrien:

          Robert OBrien is a member of NWBs Board of Directors and Chief
          Science Officer. Dr. OBrien received his Bachelor of Applied Science in
          Chemical Engineering from the University of British Columbia in 1951; his
          Masters of Applied Science in Metallurgical Engineering from the University of
          British Columbia in 1952; his PhD in Metallurgy from the University of
          Manchester in 1955.; and was a Post Doctoral Fellow in Pure Chemistry at the
          National Science Council from 1955 through 1957. He has held various academic
          positions since 1957 at the University of Alberta, the University of California
          at Berkeley, and the University of Victoria. Most recently, he was Professor of
          Chemistry at the University of Victoria from 1968 to 1986 at which time he was
          given the designation of Professor Emeritus. While teaching and conducting
          applied and primary research, Dr. OBrien acted as a consultant and served
          on the British Columbia Research Council. In 1987, Dr. OBrien founded the
          Vancouver Island Advanced Technology and Research Association.

Mr George Devlin:
Mr
Devlin is a member of the NWBs Board of Directors. Mr Devlin was a peace officer,
R.C.M.P. from 1959 until his honorable discharge in 1963. He was a founding shareholder
and managing director of the Concord Group of Companies-Concord Credits, Concord Holdings,
Concord Realty, and Concord Development Corporation in Victoria BC from 1964 to 1970. In
1971, Mr Devlin developed the internationally acclaimed tourist attraction Miniature
World in the Humboldt wing of the Empress Hotel. This attraction entertains over
200,000 visitors per year. Mr Devlin organized and founded the Victoria Attractions
Association and as chairman for 12 years he organized the highly successful Hometown
Tourist Weekend. In this ongoing program local residents purchase deeply discounted
tickets to leading attractions just before the spring tourist season, leading to
significant word of mouth advertising for participating tourist businesses. Mr Devlin has
also been a Director of Tourism Victoria; a Governor of St. Michaels University School,
Victoria BC; a member, Board of Trustees, Maritime Museum, Victoria, BC; and a Police
Commissioner, Esquimalt Police Board.

# 

Daniel B. OBrien:
Mr. OBrien is the President and CEO of Flexible Solutions International Inc
(FSI) since its inception in 1998 and of the predecessor company Flexible
Solutions Ltd since incorporation in 1990. FSI is publicly traded on the
American stock exchange (FSI-A). Its business is developing, manufacturing and
selling evaporation and energy conservation products for the drinking water and
swimming pool markets throughout the world. Prior to FSI, and concurrent with
the early years of operation, Mr. OBrien was the director of Outdoor
Education at Brentwood College. He has also taught industrial design and small
business operations at Northern Lights College, run his own construction and
kayak building businesses, worked with juvenile offenders in Outward
Bound style programs and taught industrial arts at the high school level.
Mr. OBrien has a Batchelor of Industrial Education degree from the
University of British Columbia. From 1976 to 1985 he was a member of the BC
whitewater kayaking team, in 1983 and 84 he was a member of the Canadian
National Whitewater team and in 1983, the national champion in the C-1 division.

15

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# Family Relationships

Dr.
          Patrick OBrien, the President/CEO and a Director, is the son of Dr. Robert
          OBrien, a Director and greater than 10% shareholder. Daniel OBrien,
          Director and greater than 10% shareholder, is also the son of Dr. Robert
          OBrien and brother of Dr. Patrick OBrien. Other than that, there are
          no relationships between any of the Officers or Directors of NWB.

# Executive Compensation

NWB has a formal plan for
compensating its directors for their service in their capacity as directors. The following
options to acquire common shares have been granted:

| |                                                                           |                                                                                            | 
| | ------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | 
| | Dr. Patrick O'Brien
Dr. Robert O'Brien 
Daniel O'Brien     
George Devlin | 200,000 Shares per year
50,000 Shares per year
5,000 Shares per year
5,000 Shares per year | 

The first and second year options
vested April 15, 2005 and 2006, and subsequent options will vest upon the anniversary of
the grant date and are subject to shareholder approval at the annual general meeting. The
exercise price for the first years grant is $ 0.10 Cdn., per share. The exercise
price for the second year options was also $0.10 Cdn., per share. The exercise price for
subsequent annual grants will be determined by the board of directors as the fair market
value of the common stock at or about the anniversary date.

Directors are entitled to
reimbursement for reasonable travel and other out-of- pocket expenses incurred in
connection with attendance at meetings of the board of directors. The board of directors
may award special remuneration to any director undertaking any special services on behalf
of NWB other than services ordinarily required of a director. NWB has no other stock
option plan or other long-term compensation program.

Dr.
          Patrick OBrien receives a salary of $40,000.00 Cdn., per annum and is also
          a reimbursed for reasonable expenses. Dr. P. OBrien has been granted stock
          options vesting annually over the next five years in the amount of two hundred
          thousand per year dependant on his continued service as President and CEO of
          NWB.

NWB has no plans or arrangements in
respect of remuneration received or that may be received by executive officers of NWB in
Fiscal 2005 to compensate such officers in the event of termination of employment, as a
result of resignation, retirement, change of control or a change of responsibilities
following a change of control.

16

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# Board Practices

# Committees: Meetings of
the Board

NWB does not have a separate
compensation committee, audit committee or nominating committee. These functions are done
by the board of directors meeting as a whole. NWBs board of directors held two
meetings during the fiscal year ended December 31, 2004 at which all directors were
present either in person or by telephonic conference call. Corporate actions by the Board
of Directors were unanimously also consented to in writing after telephone discussion.

# Audit Committee

The board of directors has not yet
established an audit committee. The functions of the audit committee are currently
performed by the entire board of directors. NWB is under no legal obligation to establish
an audit committee and has elected not to do so at this time so as to avoid the time and
expense of identifying independent directors willing to serve on the audit committee. NWB
may establish an audit committee in the future if the board determines it to be advisable
or is otherwise required to do so by applicable law, rule or regulation.

# Board of Directors
Independence

Only one of NWBs directors,
George Devlin is independent within the meaning of definitions established by
the Securities and Exchange Commission or any self-regulatory organization. NWB is not
currently subject to any law, rule or regulation requiring that all or any portion of its
board of directors include independent directors.

# Code of Ethics

Under the Sarbanes-Oxley Act of 2002
and the Securities and Exchange Commissions related rules, NWB is required to
disclose whether it has adopted a code of ethics that applies to NWBs principal
executive officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions. NWB has adopted a code of ethics that applies to
its chief executive officer, chief financial officer and other officers, legal counsel and
to any person performing similar functions. NWB has made the code of ethics available and
intends to provide disclosure of any amendments or waivers of the code within five
business days after an amendment or waiver on its website, www.newworldbatteries.com.

# Compliance with Section
16(a) of Securities Exchange Act of 1934

To our knowledge, during the fiscal
year ended December 31, 2004, our current directors and officers complied with all
applicable Section 16(a) filing requirements. This statement is based solely on a review
of the copies of such reports that reflect all reportable transactions furnished to us by
our directors and officers and their written representations that such reports accurately
reflect all reportable transactions.

# Employees

As of May 30, 2006, NWB only
had one employee, its president, Dr. Patrick OBrien.

17

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# Share Ownership of
Directors and Officers

The following table sets forth
information, as of May 30, 2006, with respect to the beneficial ownership of
NWBs common stock by the officers and directors of NWB based on 8,635,173 shares of
common stock outstanding. The amounts shown includes outstanding options to acquire up to
520,000 shares common stock granted to the Officers and Directors which are currently
vested and exercisable.

|Name                                                                                                                                                                                         | Title                                                                                                                  | Common Stock
Ownership                              | Percentage of Shares
Outstanding
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------
|Patrick O'Brien                  
Robert O'Brien                   
Daniel O'Brien                   
George Devlin                    
Directors and Officers as a Group
(four individuals) | President, CEO, CFO, Director   
Chief Science Officer, Director 
Director                        
Secretary, Director | 900,000
 4,100,000
 2,010,000
 1,010,000
 8,020,000 | 10%
 47%
 23%
 12%
 92%         

# Item 7.  Major
Shareholders and Related Party Transactions

NWB does not have any shareholders
other than its directors and officers who hold or have the right to acquire five percent
or greater of the outstanding shares of common stock.

# Related Party
Transactions

Since inception in August 2004, NWB
has entered into the following transactions with related parties:

In September 2004 Dr. Robert
OBrien licensed certain patents and research to NWB for which Dr. Robert
OBrien. Dr. Robert OBrien was also issued 3,000,000 shares of common stock for
$3 in consideration of his efforts in the pre-incorporation organization of NWB and
creation of its business plan.. Also in September 2004, Daniel OBrien was issued
1,000,000 shares of common stock for $1 in consideration of his efforts in the
pre-incorporation organization of NWB and creation of its business plan.; and

Upon incorporation, on August 30,
2004, NWB sold 1,000,000 shares to Dr. Robert OBrien; 1,000,000 shares to Daniel
OBrien; 1,000,000 shares to George Devlin and 500,000 shares to Dr. Patrick
OBrien at $0.10 Cdn., per share for total consideration of $350,000 Cdn.

There were no related party
transactions during the fiscal year ended December 31, 2005.

18

---



# Item 8.   Financial
Information

|A. | The
following financial statements are filed with this Form 20-F Registration
Statement
|-- | ---------------------------------------------------------------------------------------

| | Balance
Sheet     for the period August 30, 2004 (Inception) to December 31, 2005
| | ---------------------------------------------------------------------------------

| | Statement
of Loss and Deficit
| | -----------------------------

| | Statement
of Stockholders Equity
| | --------------------------------

| | Statement
of Cash Flows
| | -----------------------

| | Notes
to Financial Statements.
| | ------------------------------

# B.   Significant Changes

There
have not been any significant changes since the date of the financial statements included
in this Form 20-F Registration Statement

# Item 9.   The Offer and
Listing

# A.1-3   Offer and listing
details   NA

# A.4   Price History

There is currently no market for the
common stock of NWB and as a result investors may experience a lack of liquidity in the
shares. 1,075,172 shares common stock were sold by NWB in a private placement closing on
October 31, 2004 at $0.25 per share. In August 2004, 3,500,000 shares were sold to three
of NWBs directors at $0.10 Cdn., per share.

# A.5  Description of
Securities

The authorized capital of NWB is an
unlimited number of shares of common stock which may be issued as Class A, Class B, Class
C and Class D common stock. The Class A and Class C common stock have no par value and the
Class B and Class D common stock have a par value of $0.01 per share. As of May 30, 2006
only Class A common stock is outstanding.

All shares of the NWBs Class A
common stock have equal voting rights, with one vote per share, on all matters submitted
to the stockholders for their consideration. The shares of Class A common stock do not
have cumulative voting rights. Subject to the prior rights of the holders of any series of
Class D common stock that may be issued, holders of Class A common stock are entitled to
receive dividends, when and if declared by the board of directors, out of funds legally
available.

Holders of shares of Class A common
stock do not have any preemptive rights or other rights to subscribe for additional
shares, or any conversion rights. Upon a liquidation, dissolution, or winding up of the
affairs of NWB, holders of the Class A common stock will be entitled to share ratably in
the assets available for distribution to such stockholders after the payment of all
liabilities and after the liquidation preference of any Class D stock outstanding at the
time.  There are no sinking fund provisions
applicable to the common stock.

19

---



Class B common stock, of which there are
no shares outstanding as of May 30, 2006 are identical to the Class A common stock except
for the $0.01 par value.

Class C common stock, of which there
are no shares outstanding as of May 30, 2006 are identical to Class A common stock with
respect to distributions or upon liquidation but are non-voting shares.

Class D common stock, of which there
are no shares outstanding as of May 30, 2006, may be issued in one or more series by
resolution of the board of directors to create, define and attach special rights and
restrictions to the Class D Shares of that series, including, but without in any way
limiting or restricting the generality of the foregoing, the rate or amount of dividends,
whether cumulative, non-cumulative or partially cumulative, the dates, places and
currencies of payment thereof, the consideration for, and the terms and conditions of any
purchase for cancellation or redemption thereof, including redemption after a fixed term
or at a premium, conversion or exchange rights, the terms and conditions of any share
purchase plan or sinking fund, the restrictions respecting payment of dividends on, or the
repayment of capital in respect of any other shares of the Company and voting rights and
restrictions. The ability of the board of directors to set the rights and preferences of
the Class D common stock is limited in that the Class D common stock cannot vote with the
Class A or Class B common stock.

# Restrictions on Transfer
of Shares of Common Stock

So long as NWB is required to file
annual, quarterly and other reports with the U.S. Securities and Exchange Commission, NWB
does not impose any restrictions on the transfer of its common stock except as required by
law. However, NWBs Articles of Incorporation provide that if NWB is not publicly
held or a reporting company, its common stock cannot be transferred without the consent of
the board of directors. In addition, if NWB is not publicly held or a reporting company,
the articles of incorporation provide that any shareholder proposing to sell all or part
of their shares common stock for valuable consideration, must notify NWB of said proposed
sale and NWB must then notify all of its shareholders of said proposed sale and provide a
twenty eight day period in which other NWB shareholder may pro rata purchase the offered
shares at the proposed terms. If the shares are not taken by the other NWB shareholders,
the selling shareholder shall have ninety days from the end of the twenty eight day right
of first refusal period to sell their shares at the proposed price.

# Market for NWBs
Common Stock

NWBs common stock is not
presently listed for trading on any exchange nor over the counter market.

# Item 10.   Additional
Information.

# A.   Share Capital

As of fiscal year ended December 31,
2005 and as of May 30, 2006, the authorized capital of NWB is an unlimited number of
shares of common stock which may be issued as Class A (no par value), Class B ($0.01 par
value), Class C (no par value) and Class D ($0.01 par value) common stock.

20

---



As of fiscal year ended December 31,
2005 and as of May 30, 2006 there are 8,635,172 shares Class A common stock outstanding.
No other class of common stock is currently outstanding.

All of the outstanding shares have
been fully paid and are non-assessable. And there are no shares outstanding which are not
fully paid.

In September 2004, 3,000,000 shares
were issued to Dr. Robert OBrien and 1,000,000 shares were issued to Daniel
OBrien in consideration of the assignment of patents and technology rights.

No shares are held by or on behalf of
NWB.

There are no outstanding options,
warrants, obligations convertible into NWB common stock or resolutions to issue additional
common stock as of May 30, 2006 other than the options to acquire up to 520,000 shares
shown above in Executive Compensation, page 16 and an option to acquire up to 20,200
shares at $0.30 Cdn., per share granted to a third party consultant.

# B.   Memorandum and
Articles of Incorporation

NWB is a British Columbia
corporation, incorporation number BC0703052. NWB was formed for the commercialization of
patents and technology licensed to it by Dr. Robert OBrien.

Pursuant to Article 17 of the NWB
Articles of Incorporation, a director is not entitled to vote upon a proposal, arrangement
or contract in which the director is materially interested.

Pursuant to Article 13 of the NWB
Articles of Incorporation, there are no restrictions on a directors power in the
absence of an independent quorum, to vote compensation to themselves or any member of the
board of directors.

Pursuant to Article 8 of the NWB
Articles of Incorporation, when authorized by the directors, NWB may:

| | (1) | borrow
money in the manner and amount, on the security, from the sources and
                  on the terms and conditions that they consider appropriate;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | issue
bonds, debentures and other debt obligations either outright or as security
                  for any liability or obligation of NWB or any other person and at such
                  discounts or premiums and on such other terms as they consider
appropriate;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | guarantee
the repayment of money by any other person or the performance of                   any
obligation of any other person; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------

| | (4) | mortgage,
charge, whether by way of specific or floating charge, grant a security
                  interest in, or give other security on, the whole or any part of the
present and                   future assets and undertaking of NWB.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pursuant to Article 13 and Article 14
of the NWB Articles of Incorporation, there is no age limit on directors and there is no
requirement that directors own any shares of common stock in NWB.

21

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All shares of the NWBs Class A
common stock have equal voting rights, with one vote per share, on all matters submitted
to the stockholders for their consideration. The shares of Class A common stock do not
have cumulative voting rights. Subject to the prior rights of the holders of any series of
Class D common stock that may be issued, holders of Class A common stock are entitled to
receive dividends, when and if declared by the board of directors, out of funds legally
available.

Holders of shares of Class A common
stock do not have any preemptive rights or other rights to subscribe for additional
shares, or any conversion rights. Upon a liquidation, dissolution, or winding up of the
affairs of NWB, holders of the Class A common stock will be entitled to share ratably in
the assets available for distribution to such stockholders after the payment of all
liabilities and after the liquidation preference of any Class D stock outstanding at the
time.

There are no sinking fund provisions
applicable to the common stock.

Class B common stock, of which there are
no shares outstanding as of May 30, 2006 are identical to the Class A common stock except
for the $0.01 par value.

Class C common stock, of which there
are no shares outstanding as of May 30, 2006 are identical to Class A common stock with
respect to distributions or upon liquidation but are non-voting shares.

Class D common stock, of which there
are no shares outstanding as of May 30, 2006, may be issued in one or more series by
resolution of the board of directors to create, define and attach special rights and
restrictions to the Class D Shares of that series, including, but without in any way
limiting or restricting the generality of the foregoing, the rate or amount of dividends,
whether cumulative, non-cumulative or partially cumulative, the dates, places and
currencies of payment thereof, the consideration for, and the terms and conditions of any
purchase for cancellation or redemption thereof, including redemption after a fixed term
or at a premium, conversion or exchange rights, the terms and conditions of any share
purchase plan or sinking fund, the restrictions respecting payment of dividends on, or the
repayment of capital in respect of any other shares of the Company and voting rights and
restrictions. The ability of the board of directors to set the rights and preferences of
the Class D common stock is limited in that the Class D common stock cannot vote with the
Class A or Class B common stock.

The NWB Articles of Incorporation
have no redemption provisions, sinking fund provisions, liability to further capital calls
or any provisions discriminating against any existing or prospective holder of NWB common
stock as a result of such shareholder owning a substantial number of shares.

Changes to the rights of holders of
stock can only be accomplished by the vote of a majority of the class of common stock
entitled vote at a meeting duly called and held in accordance with the British Columbia
Corporations Act. The NWB Articles of Incorporation impose no conditions more significant
than required by law.

Unless an annual general meeting is
deferred or waived in accordance with the British Columbia Business Corporations Act,NWB must hold its first annual general meeting on or before February 4, 2006 being
within 18 months of the date of incorporation, and after that must hold an annual general
meeting at least once in each calendar year and not more than 15 months after the last
annual reference date at such time and place as may be determined by the directors.
Extraordinary general meeting may be called from time to time by the board of directors.
The record date for annual and extraordinary meetings shall be not less than 21 days prior
to the meeting date if NWB is a publicly held corporation, otherwise not less than 10 days
and not more than two months prior to the meeting date if called by the directors or, in
the case of a general meeting requisitioned by shareholders under the Business
Corporations Act,by more than four months.

22

---



The quorum for the transaction of
business at a meeting of shareholders is two persons who are, or who represent by proxy,
shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be
voted at the meeting.

The majority of votes required for
NWB to pass a special resolution regarding Special Business at a meeting of shareholders
is two-thirds of the votes cast on the resolution. Special Business is defined by Article
11.1 of the NWB Articles of Incorporation as all business conducted at a meeting of
shareholders that is not an annual general meeting, except business relating to the
conduct of or voting at the meeting. At an annual meeting of shareholders all business is
special business except:

| | (a) | business
relating to the conduct of or voting at the meeting;
| | --- | -------------------------------------------------------------

| | (b) | consideration
of any financial statements of NWB presented to                            the meeting;
| | --- | -----------------------------------------------------------------------------------------------------

| | (c) | consideration
of any reports of the directors or auditor;
| | --- | ---------------------------------------------------------

| | (d) | the
setting or changing of the number of directors;
| | --- | ---------------------------------------------------

| | (e) | the
election or appointment of directors;
| | --- | -----------------------------------------

| | (f) | the
appointment of an auditor;
| | --- | ------------------------------

| | (g) | the
setting of the remuneration of an auditor;
| | --- | ----------------------------------------------

| | (h) | business
 arising  out of a report of the  directors  not  requiring  the  passing of a
                           special resolution or an exceptional resolution;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | any
other business which,  under the Articles or the Business  Corporations Act, may be
                           transacted  at a meeting of  shareholders  without  prior
notice of the business  being                            given to the shareholders.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The NWB Articles of Incorporation
and the British Columbia Business Corporation Act impose no limitations on the rights of
non-residents or foreign shareholders to own NWB common stock or to hold or exercise
voting rights of NWB shares.

Except as requiring a vote of the
board of directors and the NWB shareholders, the NWB Articles of Incorporation do not
contain any provision that would delay, defer or prevent a change in control of NWB or
that would operate with respect to a merger, acquisition or corporate restructuring.

The NWB Articles do not state any
threshold above which shareholder ownership must be disclosed.

# C.  Material
Contracts

As of May 30, 2006, NWB has only
entered into one material contract. In September 2004, Dr. Robert OBrien granted NWB, an
exclusive license to use patents and related technology and research. The assignment
provides that in the event that NWB or its successor companies becomes insolvent, is
wound down, or is unable to carry on business for whatever reason, all rights to the
patents revert to Dr. Robert OBrien or his heirs. Furthermore, in the event that an
acceptable takeover offer for NWB is received and approved by the board, Dr. Robert OBrien
agreed to dissolve this agreement and transfer the ownership of all patents in their
entirety as provided for in the takeover offer.

23

---

D.   Exchange Controls

Neither British Columbia nor the
Canadian Federal Government have any laws, decrees, regulations or legislation which may
affect the import or export of capital by NWB or the remittance of dividends, interest or
other payments to non-resident holders of NWB securities except that income tax
withholding described below.

E.   Taxation

Canadian Federal Income Tax
Considerations

The following summary of the
material Canadian federal income tax consequences is based upon the provisions of the
Income Tax Act of Canada and the regulations thereunder (the Tax Act) and the
Canada-United States Tax Convention (the Tax Convention)) as at the date of
this Statement.  The summary is restricted to the case of a holder (a Holder)
of one or more common shares of NWB (Common Shares) who for the purposes of
the Tax Act is a non-resident of Canada, is a United States person, holds his Common
Shares as capital property and deals at arms length with NWB.

Dividends.     A holder will be subject to Canadian
withholding tax (Part XIII                     Tax) equal to 25%, or such
lower rates as may be applicable, of the gross                     amount of any dividend
paid or deemed to be paid on his Common Shares.

Under the Tax Convention, the rate
of  Part XIII Tax applicable to a dividend on Common Shares paid to a Holder who is
a resident of the United States is, if the Holder is a company that beneficially owns at
least 10% of the voting stock of NWB, 5% and, in any other case, 15% of the gross amount
of the dividend.  NWB will be required to withhold the applicable amount of Tax from
each dividend paid and remit it to the Receiver General for Canada for the account of the
Holder.

Disposition of Common Shares.  A
holder who disposes of common shares, including by deemed disposition on death, will not
be subject to Canadian tax on any capital gain thereby realized unless the common shares
constituted taxable Canadian property as defined by the Tax Act.  Generally,
a common share of a public corporation will not constitute taxable Canadian property of a
Holder unless he held the common share as capital property used by him carrying on a
business in Canada, or he or persons with whom he did not deal at arms length alone
or together held or held options to acquire, at any time within the 60 months preceding
the disposition, 25% or more of the issued shares of any class of the capital stock of
the company.

A Holder who is a resident of the
United States and realizes a capital gain on disposition of Common Shares that was
taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt
from Canadian tax unless (a) more than 50% of the value of the Common Shares is derived
from, or from an interest in, Canadian real estate, including Canadian mineral resources
properties, (b) the Common Shares formed part of the business property of a permanent
establishment that the Holder has or had in Canada within the 12 months preceding
disposition, or (c) the Holder (i) was a resident of Canada at any time within the 10
years immediately preceding the disposition, and for a total of 120 months during any
period of 20 consecutive years, preceding the disposition, and (ii) owned the Common
Shares when he ceased to be resident in Canada.

24

---



A Holder who is subject to Canadian
tax in respect of a capital gain realized on disposition of Common Shares must include
one-half of the capital gain (taxable capital gain) in computing his taxable
income earned in Canada, subject to the deduction of certain capital losses that may have
been sustained by the Holder.

United States Taxation

For federal income tax purposes, an
individual who is a citizen or resident of the United States or a domestic corporation (U.S.
Taxpayer) will recognize a gain or loss on the sale of the Companys shares
equal to the difference between the proceeds from such sale and the adjusted tax basis of
the shares.  The gain or loss will be a capital gain or capital loss if the Companys
shares are a capital asset in the hands of the U.S. Taxpayer.

For federal income tax purposes, a
U.S. Taxpayer will be required to include in gross income dividends received on the
Companys shares.  A U.S. Taxpayer who pays Canadian tax on a dividend on
shares will be entitled, subject to certain limitations, to a credit (or alternatively, a
deduction) against federal income tax liability.  A domestic corporation that owns
at least 10% of the voting shares of the Company should consult its tax advisor as to
applicability of the deemed paid foreign tax credit with respect to dividends paid on the
Companys shares.

Under a number of circumstances, a
U.S. Taxpayer acquiring shares of the Company may be required to file an information
return with the Internal Revenue Service Centre where they are required to file their tax
returns with a duplicate copy to the Internal Revenue Service Centre, Philadelphia, PA
19255.  In particular, any United States Taxpayer who becomes the owner, directly or
indirectly, of 10% or more of the shares of the Company will be required to file such a
return.  Other filing requirements may apply.  Holders and prospective holders
should therefore consult their own tax advisors with respect to their particular
circumstances and the requirements applicable to them.

There may be a possibility of the
Company being deemed, for United States tax purposes, a Foreign Personal Holding Company,
a Foreign Investment Company, a Passive Foreign Investment Company or a Controlled
Foreign Corporation.  If that should happen, U.S. Taxpayers holding or selling
Company Shares, or receiving dividends on Company Shares, will be subject to U.S.
taxation at possibly adverse or higher rates and under a system that may be complicated
and unfamiliar to them.

F.   Dividends and paying agents

NWB has not declared any dividends
and does not have any restrictions on the payment of dividends. NWB does not have any
procedures for non-resident holders to claim dividends and has not identified any
financial institutions as paying agents for dividends.

G.   Statements by Experts

No statements or reports attributed
to a person as an expert is included in this registration statement.

25

---



# H.   Documents on display

Any of the documents referred to
above can be viewed at the NWBs Registered Office, which is located at 11718-232B
Street, Maple Ridge BC, Canada V2X 7Z2.  All of the documents referred to above are
in English.

# Item 11.   Quantitative
and Qualitative Disclosures About Market Risk

(a)

| | The
Company is not presently involved in borrowing money and does not have any dealings in,
nor plan to have any dealings in, derivatives or other financial instruments, and does
not carry on business which makes it specifically sensitive to currency exchange
variations.  If and when the Company borrows money it will have to consider the
interest rates that would then be applicable to it.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)

| | As
the Company is only still in a start-up mode and has undertaken no business
activities or the sale of its products or services, it is not in a position to do any
quantitative analysis of either general risk factors applicable to it or risk factors
applicable to its potential markets.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(c)

| | The
Company has identified risk factors that are applicable to it, which are described in
Item 3.D above.
| | ---------------------------------------------------------------------------------------------------------

Part II Item 13. Defaults, Dividend
Arrearages and Delinquencies.  None

Item 14.   Material
Modifications to the Rights of Security Holders and Use of Proceeds.   None

# Item 15.   Controls and
Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in
the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's
rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based
closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). The Company's disclosure controls and
procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control
objectives. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are
effective in reaching that level of assurance.

26

---



As of the end of the period of this
report, the Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Companys Chief
Executive Officer and the Companys Chief Financial Officer, of the effectiveness of
the design and operation of the Companys disclosure controls and procedures. Based
on the foregoing, the Companys Chief Executive Officer and Chief Financial Officer
concluded that theCompanys disclosure controls and procedures were effective.

There have been no significant
changes in the Companys internal controls or in other factors that could
significantly affect the internal controls subsequent to the date the Company completed
its evaluation.

# Item 16A.   Audit
committee financial expert.

The board of directors has not yet
established an audit committee. The functions of the audit committee are currently
performed by the entire board of directors. As NWB is not listed for trading on any
exchange or market requiring an audit committee, it is under no legal obligation to
establish an audit committee and has elected not to do so at this time. NWB has not done
so because of the Companys limited financial transactions and so as to avoid the
time and expense of identifying independent directors willing to serve on the audit
committee. NWB may establish an audit committee in the future if the board determines it
to be advisable or is otherwise required to do so by applicable law, rule
or regulation. As a result the board of directors does not have an audit committee
financial expert.

# Item 16B.   Code of Ethics.

NWB has adopted a code of ethics that
applies to its chief executive officer, chief financial officer and other officers, legal
counsel and to any person performing similar functions. NWB has made the code of ethics
available and intends to provide disclosure of any amendments or waivers of the code
within five business days after an amendment or waiver on its website,
www.newworldbatteries.com.

# Item 16C.   Principal
Accountant Fees and Services.

Cinnamon, Jang, Willoughby &
Company, Chartered Accountants, are NWBs independent auditors to examine the
financial statements of NWB for the fiscal year ending December 31, 2005. Cinnamon, Jang,
Willoughby & Company, has performed the following services and has been paid the
following fees for these fiscal years.

Audit Fees

Cinnamon, Jang, Willoughby &
Company, was paid aggregate fees of $9,500 Cdn., for the fiscal year ended December 31, 2005 and
$5,500 Cdn., for the fiscal year ended December 31, 2004 for professional services rendered for
the audit of the Companys annual financial statements

27

---



Audit -Related Fees

Cinnamon, Jang, Willoughby &
Company, was not paid any additional fees for the fiscal year ended December 31, 2005 and
December 31, 2004 for assurance and related services reasonably related to the performance
of the audit or review of Shannons financial statements.

Tax Fees

Cinnamon, Jang, Willoughby &
Company was paid no fees for the fiscal year ended December 31, 2005 and no fees for the
fiscal year ended December 31, 2004 for professional services rendered for tax compliance,
tax advice and tax planning.

Other Fees

Cinnamon, Jang, Willoughby &
Company, was paid no other fees for professional services during the fiscal years ended
December 31, 2005 and December 31, 2004.

Item 16D.   Exemptions from the
Listing Standards for Audit Committees.   NA

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

28

---



Part
III    Financial Statements

# NEW WORLD BATTERIES
INC. (A Development Stage
Corporation)

# INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS

|                                                                                                                                                                                                                                                                                                                                       |                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------
|Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheet                              
Consolidated Statement of Loss and Deficit              
Consolidated Statement of Stockholders' Equity          
Consolidated Statement of Cash Flows                    
Notes to Consolidated Financial Statements | Exhibit  "A"
Exhibit  "B"
Exhibit  "C"
Exhibit  "D"
Exhibit  "E"

_________________

---



# REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Stockholders of New World
Batteries Inc.                       (A
Development Stage Corporation):

We
have audited the accompanying consolidated balance sheets of New World Batteries Inc. (A
Development Stage Corporation) as at December 31, 2005 and 2004, and the related
consolidated statements of loss and deficit, stockholders equity, and cash flows
for the years then ended, and for the period from August 30, 2004 (date of inception) to
December 31, 2005. These consolidated financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance whether the financial statements are free of
material misstatement. The company has determined that it is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the companys internal
control over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in
these consolidated financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In
our opinion, except as stated below, these consolidated financial statements present
fairly, in all material respects, the consolidated financial position of New World
Batteries Inc. (A Development Stage Corporation) as at December 31, 2005 and 2004, and
the results of its operations and its cash flows for the years then ended, and for the
period from August 30, 2004 (date of inception) to December 31, 2005, in conformity with
generally accepted accounting principles in the United States.

These
consolidated financial statements have been prepared assuming the company will continue
as a going concern. As discussed in Note 1 to the consolidated financial statements, the
company has not been able to generate significant revenues or positive cash flows from
operations to date and has an accumulated deficit of $165,145. These conditions raise
substantial doubt about the companys ability to continue as a going concern.
Managements plans to rectify the capital deficiency and losses are outlined in Note
1. The consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | /s/
Cinnamon Jang Willoughby and Company"Cinnamon Jang Willoughby and Company"
 Chartered Accountants

Burnaby, BCMarch 24,
2006

---



Exhibit "A"

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                                 Consolidated Balance Sheet
                                                 December 31, 2005 and 2004

|                                                          |  | 
|--------------------------------------------------------- |  | 
|Assets                                                    |  | 
|                                                         
|Current:                                                  |  | 
|Cash                                                      |  | 
|Short-term investments                                    |  | 
|Accounts receivable                                       |  | 
|Scientific research investment tax credit recoverable     |  | 
|Prepaid expenses                                          |  | 
|                                                         
|                                                          |  | 
|                                                         
|Liability                                                 |  | 
|                                                         
|Current:                                                  |  | 
|Accounts payable and accrued liabilities                  |  | 
|                                                         
|Stockholders' Equity                                      |  | 
|                                                         
|Capital Stock (Note 5):                                   |  | 
|Authorized -                                              |  | 
|Unlimited Class "A" Shares without par value              |  | 
|Unlimited Class "B" Shares with a par value of $0.01 each |  | 
|Unlimited Class "C" Shares without par value              |  | 
|Unlimited Class "D" Shares with a par value of $0.01 each |  | 
|Issued and Fully Paid -                                   |  | 
|8,635,173 Class "A" Shares (2004 - 8,575,173)             |  | 
|Deficit, per Exhibit "B"                                  |  | 
|                                                         
|                                                          |  | 
|Future Operations (Note 1)                                |  | 
|                                                         
|                                                          |  | 
|                                                         

 See accompanying
notes 

---



Exhibit "B"

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)

         Consolidated Statement of Loss and Deficit
                                        For the Years Ended December 31, 2005 and 2004

|                                  | 2005 | For the
Period
August 30, 2004
to December 31,
2004 | Cumulative
Since Inception
August 30, 2004
to December 31,
2005
|--------------------------------- | ---- | --------------------------------------------------- | ---------------------------------------------------------------
|Revenue                           |      |                                                     | $                                                              
|                                 
|Expenses:                         |      |                                                    
|Advertising and promotion         |      |                                                     |                                                                
|Office and miscellaneous          |      |                                                     |                                                                
|Professional fees                 |      |                                                     |                                                                
|Rent                              |      |                                                     |                                                                
|Repairs and maintenance           |      |                                                     |                                                                
|Research and development (Note 7) |      |                                                     |                                                                
|Telecommunications                |      |                                                     |                                                                
|Travel                            |      |                                                     |                                                                
|Wages                             |      |                                                     |                                                                
|                                 
|                                  |      |                                                     |                                                                
|                                 
|Loss before other items           |      |                                                     |                                                                
|                                 
|Other Items:                      |      |                                                    
|Interest and other income         |      |                                                     |                                                                
|Loss on foreign exchange          |      |                                                     |                                                                
|                                 
|                                  |      |                                                     |                                                                
|                                 
|Net Loss                          |      |                                                     |                                                                
|Deficit, beginning                |      |                                                     |                                                                
|                                 
|Deficit, ending, to Exhibit "A"   |      |                                                     | $                                                              
|                                 
|Loss per share                    |      |                                                     | $                                                              
|                                 
|Weighted average number of shares |      |                                                     |                                                                
|                                 

 See accompanying notes


---



Exhibit "C"

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                       Consolidated Statement of Stockholders' Equity
                                      For the Years Ended to December 31, 2005 and 2004

|                           | Number
of Shares | Amount | Deficiency | Total    
|-------------------------- | ---------------- | ------ | ---------- | ---------
|Balance, August 30, 2004   |                  |        |            |          
|(Date of Inception)        |                  |        |            |         
|Shares Issued (Note 5):    |                  |       
|For Cash -                 |                  |       
|a)  Set-up company         |                  |        |            | 4,000,001
|b)  Acquisition of assets  |                  |        |            | 3,500,000
|c)  Private placement      |                  |        |            | 1,075,172
|Net Loss, per Exhibit "B"  |                  |        |            |         
|                          
|Balance December 31, 2004  |                  |        |            | 8,575,173
|Shares Issued (Note 5):    |                  |       
|For Cash -                 |                  |       
|d)  Private placement      |                  |        |            | 60,000   
|Net Loss, per Exhibit "B"  |                  |        |            |         
|                          
|Balance, December 31, 2005 |                  |        |            | 8,635,173
|                          

 See accompanying
notes 

---



Exhibit "D"

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)

  Consolidated Statement of Cash Flows
                                        For the Years Ended December 31, 2005 and 2004

|                                                      | 2005 | For the
Period
August 30, 2004
to December 31, to
2004 | Cumulative
Since Inception
August 30, 2004
December 31,
2005
|----------------------------------------------------- | ---- | ------------------------------------------------------ | ------------------------------------------------------------
|Operating Activities:                                 |      |                                                        |                                                             
|Net Loss, per Exhibit "B"                             |      |                                                        | $                                                           
|Changes in non-cash working capital -                 |      |                                                       
|(Increase) Decrease in accounts receivable            |      |                                                        |                                                             
|(Increase) Decrease in scientific research investment |      |                                                       
|tax credit recoverable                                |      |                                                        |                                                             
|(Increase) Decrease in prepaid expenses               |      |                                                        |                                                             
|Increase (Decrease) in accounts payable and           |      |                                                       
|accrued liabilities                                   |      |                                                        |                                                             
|                                                     
|Cash flows (used in) operating activities             |      |                                                        |                                                             
|                                                      |      |                                                       
|Investing Activity:                                   |      |                                                       
|Acquisition of short-term investments                 |      |                                                        |                                                             
|                                                      |      |                                                       
|Financing Activity:                                   |      |                                                       
|Issuance of capital stock                             |      |                                                        |                                                             
|                                                     
|Net Increase (Decrease) in Cash                       |      |                                                        |                                                             
|Cash, beginning                                       |      |                                                        |                                                             
|                                                     
|Cash, ending                                          |      |                                                        | $                                                           
|                                                     

 See accompanying notes


---



Exhibit "E"

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

|1. | Future
Operations:
|-- | ------------------

| | The
consolidated financial statements have been prepared on the basis of a going concern,
which contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. New World Batteries Inc. has not generated any revenues to
date and losses are expected to be incurred during its development. The ability of New
World Batteries Inc. to continue as a going concern is dependent on raising additional
capital, the support of its shareholders and ultimately on generating future profitable
operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Basis
of Presentation:
|-- | ----------------------

| | These
consolidated financial statements include the accounts of New World Batteries Inc., and
its wholly-owned subsidiary 217304 B.C. Ltd. All material inter-company balances and
transactions have been eliminated. The parent company was incorporated on August 30, 2004
pursuant to the laws of British Columbia.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
August 30, 2004 the company completed an acquisition of 100% of the shares of 217304 B.C.
Ltd. The acquisition was effected through the issuance of 1 share of common stock by the
company. 217304 B.C. Ltd. is an inactive company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Significant
Accounting Policies:
|-- | --------------------------------

| | These
consolidated financial statements have been prepared in accordance with generally
accepted accounting principles accepted in the United States of America applicable to a
going concern and reflect the policies outlined below. All figures presented in the
consolidated financial statements are denominated in Canadian dollars.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | Stage
of Operations 
| | -- | ---------------------

| | The
operations are that of a development stage enterprise that is primarily involved in the
development of electrochemical technologies that improve the available power of certain
rechargeable batteries.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | Cash

| | -- | ------

| | Cash
consists of cash and funds in bank accounts integral to the companys cash
management.
| | -------------------------------------------------------------------------------------------

| | c) | Short-term
Investments 
| | -- | ------------------------

| | Short-term
investments consists of term deposits with maturities of less than one year.
| | ---------------------------------------------------------------------------------------

| | d) | Translation
of Foreign Currencies 
| | -- | -----------------------------------

| | Amounts
in foreign currencies are translated into Canadian dollars as follows:
| | ------------------------------------------------------------------------------

| | i) | Monetary
items at the exchange rate prevailing at the end of the year;
| | -- | ----------------------------------------------------------------------

| | ii) | Non-monetary
items at the exchange rate prevailing on the date of acquisition;           and
| | --- | --------------------------------------------------------------------------------------------

| | iii) | Income
and expenses at the average annual rate.
| | ---- | -----------------------------------------------

---



Exhibit "E"Continued

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

|3. | Significant
Accounting Policies: (Continued)
|-- | --------------------------------------------

| | e) | Income
Taxes 
| | -- | --------------

| | Income
taxes are accounted for under the asset and liability method in accordance with Financial
Accounting Standard No. 109, Accounting for Income Taxes. Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and
liabilities, and their respective tax bases and operating losses, and tax credit carry
forwards. Deferred tax assets and liabilities are measured using substantially enacted
tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities on a change in tax rates is recognized in income in the period that
includes the enactment date. Deferred tax assets are reduced by a valuation allowance to
the extent that the ability to recover the asset is not considered to be more likely than
not.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | f) | Stock
Options 
| | -- | ---------------

| | The
company applies the fair value based method of accounting in accordance with Financial
Accounting Standard No. 123, Accounting for Stock Based Compensation. Stock
compensation cost for employees and non-employees are recognized based on the fair value
of the equity instrument at the date services are performed. Deferred compensation
expense arises when the compensation expense relates to future services. Deferred
compensation expense is amortized to income over the service period which generally
reflects the vesting period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
fair value of each option granted is estimated on the date of grant using the
Black-Scholes Option Pricing Model using the following assumptions: Expected dividend
yield  0%, risk free interest rate  3%, expected lives  5 years, and
volatility 0%. Since the company is privately held and not yet listed on a public stock
market, the volatility has been computed as 0% and the resulting stock compensation
expense is $Nil
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | g) | Research
and Development Expenditures 
| | -- | ---------------------------------------

| | Research
and development costs include payroll, materials, and equipment cost solely related to
research and development activities. These costs are expensed as incurred. Investment tax
credits relating to current and capital research and development expenditures are
recorded as a reduction of expenses.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | h) | Loss
per Share 
| | -- | ----------------

| | Basic
loss per share is computed on the basis of the weighted average number of share of common
stock outstanding during the year.
| | ----------------------------------------------------------------------------------------------------------------------------------

---



Exhibit "E" Continued

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

|4. | Financial
Instruments:
|-- | ----------------------

| | a) | Fair
Values 
| | -- | -------------

| | The
fair market value of the financial instruments comprising cash, short-term investments,
accounts receivable, and accounts payable and accrued liabilities were estimated to
approximate their carrying values due to immediate or short-term maturity of these
financial instruments.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) | Foreign
Exchange and Interest Rate Risk 
| | -- | -----------------------------------------

| | The
company is exposed to foreign exchange and interest rate risk to the extent that the
market value rate fluctuations materially differ from financial assets and liabilities.
Exposure to the rate fluctuations is reduced by purchasing short-term investments in
foreign investments.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Capital
Stock:
|-- | --------------

|                                              | Shares | $
|--------------------------------------------- | ------ | -
|Authorized -                                  |        |  
|Unlimited Class "A" Shares without par value  |        |  
|Issued During 2004 -                          |        |  
|For cash, to set-up company (a)               |        |  
|For cash, acquisition of assets (b)           |        |  
|Transfer all issued and outstanding shares of |        |  
|217304 B.C. Ltd. (c)                          |        |  
|For cash, proceeds on private placement       |        |  
|                                             
|Balance, December 31, 2004                    |        |  
|                                              |        |  
|Issued During 2005 -                          |        |  
|For cash, proceeds on private placement       |        |  
|                                             
|Balance, December 31, 2005                    |        |  
|                                             

| | (a) | issued
4,000,000 shares of stock valued in total at $4 to set-up the company;
| | --- | -----------------------------------------------------------------------------

| | (b) | issued
3,500,000 shares of stock valued at $350,000 to acquire assets of 217304
               B.C. Ltd.
| | --- | --------------------------------------------------------------------------------------------------------

| | (c) | issued
1 share of stock to transfer all of the issued and outstanding shares of
               217304 B.C. Ltd. to the company;
| | --- | -------------------------------------------------------------------------------------------------------------------------------

| | (d) | completed
a private placement whereby 1,075,172 shares of stock were issued at                an
average price of $0.30 ($0.25 US) per share;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | incurred
no costs associated with the issuance of the shares; and
| | --- | -----------------------------------------------------------------

| | (f) | completed
a private placement whereby 60,000 shares of stock were issued at an
               average price of $0.30 ($0.25 US) per share.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------

---



Exhibit "E" Continued

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

|6. | Stock
Options:
|-- | --------------

| | A
stock option plan is established whereby options may be granted to the directors,
officers and employees.
| | -----------------------------------------------------------------------------------------------------------

| | The
following stock options are outstanding:
| | --------------------------------------------

|                            | Number of
Shares | Exercise Price
Per Share | Weighted Average
Exercise Price
|--------------------------- | ---------------- | ------------------------ | -------------------------------
|Balance, August 30, 2004    |                  |                          |                                
|Granted during the year (a) |                  |                          |                                
|                           
|Balance, December 31, 2004  |                  |                          |                                
|Granted during the year (b) |                  |                          |                                
|                           
|Balance, December 31, 2005  |                  |                          |                                
|                           

| | (a) | On
September 1, 2004 stock options were granted to employees and directors to
               purchase 260,000 shares at the price of $0.10 per share, exercisable up to
               September 1, 2009.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
November 15, 2004 stock options were granted to a director to purchase 20,200 shares at
the price of Cdn $0.30 (US $0.25) per share, exercisable up to November 15, 2009.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | On
September 1, 2005 stock options were granted to employees and directors to
               purchase 260,000 shares at the price of Cdn $0.30 (US $0.25) per share,
               exercisable up to September 1, 2010.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Research
and Development:
|-- | -------------------------

|                      | 2005 | 2004
|--------------------- | ---- | ----
|Experimental devices  |      |     
|Labour                |      |     
|Miscellaneous         |      |     
|Patents               |      |     
|Research              |      |     
|Testing               |      |     
|                     
|                      |      |     
|Less:  Investment tax |      |     
|                     
|                      |      |     
|                     

---



Exhibit "E" Continued

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

|8. | Income
Taxes:
|-- | -------------

| | a) | Non-capital
Losses 
| | -- | --------------------

| | Accumulated
non-capital losses for income tax purposes of $146,984 (2004  $74,194) are
available to be carried forward to reduce future years taxable income. The
potential benefit arising from these losses has been recognized as a deferred tax asset
and has been offset with a full valuation allowance as the company is a developmental
stage company and profitable operations may not be attained in the near future.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
right to claim these losses expire at the end of the following fiscal years:
| | --------------------------------------------------------------------------------

|                                                | 2005 | 2004
|----------------------------------------------- | ---- | ----
|Deferred Tax Asset:                             |      |     
|Benefit of net operating losses carried forward |      |     
|Less:  Valuation allowance                      |      |     
|                                               
|                                                |      |     
|                                               

| | Since
commercial operations are not yet attainable for the development stage corporation,
management is unable to demonstrate that it is more likely than not that the results of
future operations will generate sufficient taxable income to realize the net deferred tax
asset.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|                                | 2005 | 2004 |  |    
|------------------------------- | ---- | ---- |  | ---
|Tax at Canadian statutory rates |      |      |  | 18 
|Change in valuation allowance   |      |      |  | (18
|                               
|Total recovery                  |      |      |  |   
|                               

| | b) | Scientific
Research and Development Investment Tax Credits 
| | -- | ------------------------------------------------------------

| | Investment
tax credits related to scientific research and development expenditures are potentially
refundable at the rate of 35% of the eligible expenditures. Investment tax credits on
hand and available to be carried forward at the end of the preceding year amounted to
$7,350. In 2005, an additional amount of $23,510 was calculated as refundable and the
total amount of $23,510 was recovered leaving $7,350 available to be carried forward. The
potential benefit arising from the investment tax credits can be carried forward for ten
fiscal years and expires at the beginning of the following fiscal period thereafter.
These investment tax credits expire on January 1, 2016.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---



Exhibit "E" Continued

# NEW WORLD BATTERIES
INC.                                               (A Development Stage Corporation)
                                         Notes to Consolidated Financial Statements
                                                 December 31, 2005 and 2004

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

| | The
President of the company was paid $3,600 as rent in 2004 and 2005 for the use of his home
office.
| | -----------------------------------------------------------------------------------------------------

|10. | Comparative
Figures:
|--- | --------------------

| | The
comparative figures have been reclassified, where applicable, in order to conform to the
current years presentation.
| | ------------------------------------------------------------------------------------------------------------------------

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Item 19.   Exhibits

|1. | Articles
of Incorporation
 (Incorporated by Reference for Registration Statement on Form 20-F filed on February 9, 2005)
|-- | ------------------------------------------------------------------------------------------------------------------------

|2. | Instrument
defining rights of securities holders (See Section 27 of Articles of
          Incorporation)  (Incorporated by Reference for Registration Statement on Form 20-F filed on February 9, 2005)
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 | Patent
Assignment Agreement  (Incorporated by Reference for Registration Statement on Form 20-F filed on February 9, 2005)
|--- | --------------------------------------------------------------------------------------------------------------------------

|11. | Code
of Ethics   (Incorporated by Reference for Registration Statement on Form 20-F filed on February 9, 2005)
|--- | --------------------------------------------------------------------------------------------------------------

|12.1 | Rule
13a-14a Certification of Chief Executive Officer
|---- | -----------------------------------------------------

|12.2 | Rule
13a-14a Certification of Chief Financial Officer
|---- | -----------------------------------------------------

|13.1 | Rule
13a-14b Certification of Chief Executive Officer
|---- | -----------------------------------------------------

|13.2 | Rule
13a-14b Certification of Chief Financial Officer
|---- | -----------------------------------------------------

29

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# SIGNATURES

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

| |                                                                        
| | -----------------------------------------------------------------------
| | NEW WORLD BATTERIES, INC./S/ PATRICK OBRIEN
Patrick O'Brien, President

Date:
May 30, 2006

30

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