**Table
      of Contents**







**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      20-F/A**





(Mark
      One)




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





x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
                2007





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE TRANSITION PERIOD FROM __________ TO
                __________





o
            SHELL
                COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                EXCHANGE
                ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO
                __________





Commission
      file number 0-31481




**CARTHEW
      BAY TECHNOLOGIES INC.**


(Exact
      name of Registrant as specified in its charter)




Not
      Applicable


(Translation
      of Registrant's Name into English)




ONTARIO


(Jurisdiction
      of incorporation or organization)




BROOKFIELD
      PLACE, 181 BAY STREET, SUITE 2500


TORONTO,
      ONTARIO M5J 2T7 CANADA


(Address
      of principal executive offices)





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


NONE





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


COMMON
      SHARES


(Title
      of
      Class)





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


NONE


(Title
      of
      Class)





Indicate
      the number of outstanding shares of each of the issuer's classes of capital
      or
      common stock as of the close of the period covered by the annual
      report.




50,789,682
      COMMON SHARES





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes
o         No
      x












*Table
        of Contents*





If
      this
      report is an annual or transition report, indicate by check mark if the
      registrant is not required to file reports pursuant to Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934.


Yes
o         No
      x





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 reporting requirements
      for the past 90 days.


Yes
x             No
      o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.


Large
      accelerated filer o  Accelerated
      filer o Non-accelerated filer x





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


Item
      17
x         Item
      18 o





If
      this
      is an annual report, indicate by check mark whether the registrant is a shell
      company (as defined in Rule 12b-2 of the Exchange Act).


Yes
o         No
      x





(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
o             No
      o





2
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          of Contents*




**TABLE
      OF CONTENTS**


Part
                    IItem
                    1. Identity of Directors, Senior Management and
                    Advisers
                
                4Item
                    2. Offer Statistics and Expected
                    Timetable
                
                4Item
                    3. Key Information
                
                4Item
                    4. Information on the Company
                
                9Item
                    4A. Unresolved Staff CommentsItem
                    5. Operating and Financial Review and
                    Prospects
                
                24Item
                    6. Directors, Senior Management and
                    Employees
                
                32Item
                    7. Major Shareholders and Related Party
                    Transactions
                
                39
  Item
                    8. Financial Information
                
                42Item
                    9. The Offer and Listing
                
                43Item
                    10. Additional Information
                
                44Item
                    11. Quantitative and Qualitative Disclosures About
                    Market Risk
                
                55Item
                    12. Description of Securities Other than Equity
                    Securities
                
                56Part
                    IIItem
                    13. Defaults, Dividend Arrearages and
                    Delinquencies
                
                56Item
                      14. Material Modifications to the Rights of Security
                      Holders and Use of Proceeds
                
                56Item
                    15. Controls and Procedures
                
                56Item
                    16. [Reserved]
                
                57Item
                    16A. Audit Committee Financial Expert
                
                57Item
                    16B. Code of EthicsItem
                    16C. Principal Accountant Fees and
                    Services
                
                57Item
                    16D. Exemptions from listing the Standards for Audit
                    CommitteesItem
                    16E. Purchases of Equity Securities by the Issuer and
                    Affiliated Purchasers
                
                57Part
                    IIIItem
                    17. Financial Statements
                
                58Item
                    18. Financial Statements
                
                58Item
                    19. Exhibits
                
                58


FORWARD
      LOOKING STATEMENTS Certain statements in this annual report are based upon
      the
      beliefs of management of Carthew Bay Technologies Inc. (Formerly Astris Energi
      Inc.), as well as assumptions made by and information currently available to
      management, and such statements may constitute "forward-looking statements"
      within the meaning of the U. S. Private Securities Litigation Reform Act of
      1995. Investors should note that many factors, some of which are discussed
      elsewhere in this Report, could affect the future operations and the future
      financial results of the Company and could cause future operations and future
      financial results to differ materially from those expressed in such
      forward-looking statements.





3
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          of Contents*




PART
      I.





ITEM
              1.
            IDENTITY
                OF DIRECTORS, SENIOR MANAGEMENT AND
                ADVISERS.




Not
      Applicable.





ITEM
              2.
            OFFER
                STATISTICS AND EXPECTED TIMETABLE.




Not
      Applicable.





ITEM
              3.
            KEY
                INFORMATION.





A.
            SELECTED
                FINANCIAL DATA.





The
      following table sets forth, in Canadian dollars, selected historical information
      concerning the Company presented in accordance with Canadian GAAP and is
      qualified by reference to the consolidated financial statements and notes
      thereto. See "Item 17. Financial Statements".





As
                at
            
            As
                at
            
            As
                at
            
            As
                at
            
            As
                atDecember 31,
            
            December 31,
            
            December 31,
            
            December 31,
            
            December 31,2007
            
            2006
            
            2005
            
            2004
            
            2003Revenue
            
            $
            31,290
            
            $
            85,915
            
            $
            291,512
            
            $
            88,798
            
            $
            67,870Net
                Profit (Loss) fromOperations
            
            
            (2,507,843
            )
            
            (2,120,422
            )
            
            (5,330,864
            )
            
            (3,462,257
            )
            
            (2,206,969
            )Net
                Profit (Loss)
            
            
            1,995,088
            
            
            (2,120,422
            )
            
            (5,330,864
            )
            
            (3,462,257
            )
            
            (2,206,969
            )Basic
                Profit (Loss) from operationsper
                Share
            
            
            0.04
            
            
            (0.05
            )
            
            (0.16
            )
            
            (0.26
            )
            
            (0.12
            )Diluted
            
            
            0.03
            
            
            n/a
            
            
            n/a
            
            
            n/a
            
            
            n/aTotal
                Assets
            
            
            2,634,698
            
            
            1,766,218
            
            
            982,494
            
            
            509,124
            
            
            435,235Net
                Assets
            
            
            2,551,811
            
            
            (
                53,221
            )
            
            (228,456
            )
            
            253,294
            
            
            (135,975
            )Long
                TermObligations
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            100,000Share
                Capital
            
            
            10,845,648
            
            
            11,205,002
            
            
            10,030,096
            
            
            6,227,074
            
            
            3,343,853Number
                of Shares Basic
            
            
            50,789,682
            
            
            48,131,669
            
            
            37,906,569
            
            
            26,316,551
            
            
            19,230,425Cash
                Dividends
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —




4
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          of Contents*




EXCHANGE
      RATES





The
      following table sets out the exchange rates for the conversion of Canadian
      dollars into United States dollars.  The exchange rates used are the
      closing rates provided by The Bank of Canada.  The table lists the rate in
      effect at the end of the following periods, the average exchange rates (based
      on
      the average of the exchange rates for the closing date of each month in such
      periods), and the range of high and low exchange rates for such
      periods.


Year
                  ended December 31,
              2007
              2006
              2005
              2004
              2003End
                  of Period
              1.02
              .86
              .86
              .83
              .77Average
                  for Period
              .936
              .882
              .825
              .77
              .71High
                  for Period
              .84
              .91
              .875
              .85
              .78Low
                  for Period
              1.09
              .853
              .785
              .70
              .64




The
      following table sets out the range of high and low exchange rates, for the
      conversion of Canadian dollars into United States dollars for each of the
      corresponding months during 2007 and 2008. The exchange rates used are the
      closing rates as provided by the Bank of Canada.


Month
                High
                LowNovember
                    2007
                1.09
                1.00December
                    2007
                1.02
                .979January
                    2008
                1.01
                .971February
                    2008
                1.03
                .996March
                    2008
                1.02
                1.00April
                    2008
                .997
                .973May
                    2008
                1.02
                .982





The
      exchange rate on December 31, 2007 for the conversion of United States dollars
      into Canadian dollars was $1.0120 (CDN$1.00 = US$.86). As of June 11, 2008
      the
      close rate of exchange for the conversion of United States dollars into Canadian
      dollars was 1.0174(CDN$1.00 = US$.9829).  The exchange rates used are the
      closing rates as provided by the Bank of Canada.





B.
            CAPITALIZATION
                AND INDEBTEDNESS.




Not
      Applicable.





C.
            REASON
                FOR THE OFFER AND USE OF PROCEEDS.




Not
      Applicable.





D.
            RISK
                FACTORS. An investment in the securities of the Company involves
                a high
                degree of risk. The following risk factors should be considered carefully
                in evaluating the Company and its business. If any of the risks described
                below occurs, the business, results of operations and financial condition
                of the Company could be adversely
                affected.





5
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          of Contents*




HISTORY
      OF LOSSES SINCE INCEPTION, EXPECTATION OF LOSSES IN THE IMMEDIATE FUTURE, AND
      POSSIBILITY THAT THE COMPANY MAY NEVER ACHIEVE OR SUSTAIN PROFITABILITY. The
      Company has incurred operating net losses each year since inception. The
      accumulated deficit of the Company was CDN$14,446,625 as of December 31, 2007.





Carthew
      Bay Technologies Inc. (Formerly Astris Energi Inc.) **(** the
      “Company”) designed, developed, manufactured and sold alkaline fuel cells
      (“AFCs”) and alkaline fuel cell systems, fuel cell and battery test loads and
      provide engineering and other services.




Since
      inception, the efforts of the Company have been devoted to the development
      of
      AFCs for industrial, commercial, educational, scientific, transportation and
      similar applications. The Company had not earned significant revenues.





On
      August
      1, 2007, the Company sold substantially all its assets, including its
      wholly-owned subsidiaries, to MKU Canada Inc., an arm’s-length third party. MKU
      Canada Inc. is a wholly-owned subsidiary of MKU Cyprus Ltd. The transaction
      includes the sale of substantially all of the assets of the Company, including
      its fuel cell and test load technology assets for consideration of: i)
      US$3,064,363 in cash ($3,216,049 Canadian: ii) forgiveness of US$1,225,000
      and
      $380,000 Canadian of face value secured convertible debentures held by ACME
      Global Inc. (a subsidiary of MKU Cyprus Ltd.) along with US$210,000 ($234,558
      Canadian) of accrued interest: iii) an option for the Company, for a
      consideration of $1 to purchase 4,248,750 of its own shares: iv) the forgiveness
      of a secured convertible promissory note in the amount of US$600,000 ($642,700
      Canadian). The Company has exercised the option to reacquire and cancel the
      4,248,750 of its own shares.





With
      the
      sale of substantially all of its assets, the Company ceased to be in the
      development stage. In prior years, the Company reported as a development stage
      enterprise.





The
      Company changed its name to Carthew Bay Technologies Inc. on August 17, 2007.





On
      December 10, 2007, the Company announced that it had executed a letter of intent
      (“LOI”) with Colorep Inc. (“Colorep”) relating to a transaction whereby shares
      of the Company will be issued in exchange for all of the issued and outstanding
      shares of Colorep under terms that constitute a reverse takeover (“RTO”)
      pursuant to Emerging Issue Committee abstract EIC-10, *Reverse
      Takeover Accounting,* of the
      CICA Handbook. Following the successful completion of the RTO, the Company
      will
      become the legal parent of, and the existing shareholders of Colorep will
      acquire control of, the combined enterprise. Successful completion of the RTO
      is
      subject to several conditions as discussed below.




Colorep
      is located in Rancho Cucamonga, CA, and develops and offers for sale sustainable
      subsurface printing and dyeing technology for decorating a wide variety of
      textiles and other consumer products. Colorep has previously announced its
      intention to acquire Transprint USA Inc. (“Transprint”), a privately held,
      employee-owned company, founded in 1978, with headquarters and manufacturing
      facilities in Harrisonburg, VA, and design studios and showrooms in New York
      City and Charlotte, NC. Transprint offers printing products and design services
      worldwide for the apparel, commercial and residential furnishings markets.
      The
      definitive share purchase agreement




6
 *Table
          of Contents*




between
      Colorep and Transprint has been completed.
      One of the conditions precedent to the conclusion of the RTO under the LOI
      is
      receipt by Colorep of a credit facility sufficient to enable Colorep to conclude
      the acquisition of Transprint.


Pursuant
      to the LOI and subject to the terms thereof, the Company will invest US
      $2,000,000 in two equal tranches into secured debentures (the “Debentures”) of
      Colorep. The Debentures will bear interest at 1% per month (unless increased
      pursuant to the terms of the LOI) and interest will accrue until maturity on
      April 30, 2008. Subject to certain conditions, the Company is obligated to
      advance the first US $1,000,000 to Colorep upon execution of a binding share
      exchange agreement. The LOI further provides that upon receipt of all approvals,
      including shareholder and regulatory approvals, necessary to conclude the RTO,
      the Company will cancel the Debentures. There are many conditions associated
      with the conclusion of the various transactions included as part of the LOI
      including: a) a condition that the Company consolidate its shares pursuant
      to a
      formula included as part of the LOI, and b) the completion of Transprint
      acquisition by Colorep.




Subject
      to certain extension provisions set out in the LOI, the transactions
      contemplated thereunder must be completed prior to April 30, 2008. Upon closing
      of the RTO, all of the current members of the Board of Directors of the Company,
      other than Michael Liik, will resign and will be replaced by between four and
      six new members.




Execution
      of the LOI has received the unanimous approval for the Board of Directors of
      the
      Company.




In
      conjunction with the proposed RTO, the Board of Directors of the Company
      approved a Success Fee payable to its CEO and CFO amounting to 1.4% of the
      Colorep transaction value or $1,150,000, earned upon closing of the Colorep
      RTO
      transaction and payable as a combination of cash remaining in the Company
      immediately prior to the RTO transaction and treasury shares of the Company
      issued at a price equivalent to the value per share (after giving consideration
      to the shares issued in this regard) received by the shareholders of the Company
      as a consequence of the RTO. The fee would be increased by an additional 0.06%
      of the transaction value or $500,000, or such pro-rated amount, determined
      3
      months after closing of the RTO transaction and based upon the performance
      of
      the post-RTO shares. In the event that the performance of the post-RTO shares
      (with the definition of performance to be established in a formal agreement),
      is
      between $0.70 per share equivalent value (as described in the LOI) and $1.00
      per
      share, the additional $500,000 fee would be pro-rated such that no fee would
      be
      earned on the lower threshold and the full fee earned on the upper threshold.
      This fee would be payable in treasury shares of the Company on the basis
      described above.




On
      May
      23, 2008, Carthew Bay Technologies Executed Agreement and Plan of Merger with
      Colorep, Inc. and advanced a second US$1.0 Million in respect of the Secured
      Debenture Financing related thereto.





RISKS
      INHERENT IN INTERNATIONAL OPERATIONS INCLUDING CURRENCY EXCHANGE RATE
      FLUCTUATIONS AND TARIFF REGULATIONS. A substantial portion of the Company's
      revenues is expected to be realized in currencies other than Canadian dollars.
      The Company's operating expenses are primarily paid in Canadian dollars.
      Fluctuations in the exchange rate between the Canadian





7
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dollar
      and such other currencies may have a material
      effect on the Company's results of operations.




POSSIBLE
      DIFFICULTIES BY UNITED STATES PERSONS TO EFFECT SERVICE OF PROCESS WITHIN THE
      UNITED STATES UPON THE COMPANY OR ITS DIRECTORS OR OFFICERS, OR TO REALIZE
      IN
      THE UNITED STATES UPON JUDGMENTS. The Company is an Ontario corporation with
      its
      principal place of business in Canada. Most of its Directors and Officers are
      residents of Canada and most of the assets of such persons and of the Company
      are located outside the United States. US Persons should not assume that
      Canadian courts (i) would enforce judgments of United States courts obtained
      in
      actions against the Company or its Officers and Directors predicated upon the
      civil liability provisions of the United States federal securities laws or
      the
      securities or "blue sky" laws of any state within the United States or (ii)
      would enforce, in original actions, liabilities against the Company or its
      Officers and Directors predicated upon the United States federal securities
      laws
      or any such state securities or blue sky laws. Canadian courts can enforce
      such
      judgments but are not required to give “full faith and credit” to such judgments
      as would courts lying in separate United States jurisdictions. For instance,
      a
      Florida court would have to enforce a New York judgment, but a Canadian court
      can decide not to enforce a US judgment in Canada.





THE
      COMPANY HAS NEVER PAID DIVIDENDS AND IT DOES NOT ANTICIPATE PAYING DIVIDENDS
      IN
      THE FORESEEABLE FUTURE. The Company has never declared any cash dividends on
      its
      Common Shares, and if the Company were to become profitable, it would be
      expected that most or all of such earnings would be retained to support the
      business. As a result, shareholders must rely on stock appreciation for any
      return on their investment in the Common Shares.





THE
      COMPANY HAS AUTHORIZED AN UNLIMITED NUMBER OF COMMON SHARES AND UP TO 10,000,000
      PREFERRED SHARES OF SHARE CAPITAL. Under Canadian law the Company is able to
      issue an unlimited number of its common shares and up to 10 million preferred
      shares. The Company does not need the consent of its shareholders to issue
      these
      additional shares. Therefore, there is a high likelihood of dilution from the
      issuance of additional shares. The additional shares can be used to thwart
      a
      takeover attempt that the Board of Directors does not deem in the Company’s best
      interest, however the Company has not made any provision for issuing shares
      in
      that manner. The Company has not issued any preferred shares.





VOLATILE
      AND LIMITED MARKET FOR THE COMPANY'S COMMON SHARES. The Company's Common Shares
      are not actively traded.  The Company's Common Shares began trading on the
      Over The Counter Bulletin Board Exchange (“OTC.BB”) on June 20, 2001.  The
      Common Shares traded in 2007 from a high of US$0.062 to a low of US$0.0178
      per
      share. The Common Shares are not presently publicly traded in Canada. There
      can
      be no assurance given that trading activity will increase investor
      recognition.





APPLICATION
      OF THE SEC PENNY STOCK REGULATIONS AND RESTRICTIONS. The Securities and Exchange
      Commission has adopted regulations which generally define Penny Stocks to be
      an
      equity security that has a market price less than US$5.00 per share or an
      exercise price of less than US$5.00 per share. This is subject to certain
      exemptions based upon minimum assets or revenues. As of May 30, 2008, the
      closing bid and asked prices for the Common Shares





8
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were
      US$.045 and US$.055 per share. As a Penny Stock,
      the Company's Common Shares may become subject to Rule 15g-9 under the
      Securities Exchange Act of 1934, as amended, or the Penny Stock Rule. This
      Rule
      imposes additional sales practice requirements on broker-dealers that sell
      such
      securities to persons other than established customers and "accredited
      investors" (generally defined as individuals with a net worth in excess of
      US$1,000,000 or annual incomes exceeding US$200,000, or combined annual income
      with spouse of US$300,000).  For transactions covered by Rule 15g-9, a
      broker-dealer must make a special suitability determination for the purchaser
      and have received the purchaser's written consent to the transaction prior
      to
      sale. As a result, this Rule may affect the ability of broker-dealers to sell
      the Company's securities and may affect the ability of purchasers to sell any
      of
      the Company's securities in the secondary market.




For
      any
      transaction involving a Penny Stock, unless exempt, the Rule requires that
      prior
      to any transaction in a Penny Stock, a disclosure schedule prepared by the
      SEC
      relating to the Penny Stock market is delivered. Disclosures about sales
      commissions payable to both the broker-dealer and the registered representative
      and about current quotations for the securities are also required. Finally,
      monthly statements are required to be sent disclosing recent price information
      for the Penny Stock held in the account and information on the limited market
      in
      penny stock.





FORWARD
      LOOKING INFORMATION ****





The
      following discussion, as well as other sections within this annual report,
      contains forward-looking information which is based on current expectations
      and
      entails various risks and uncertainties. These risks and uncertainties could
      cause or contribute to actual results that are materially different from those
      expressed or implied. The forward-looking information contained in this document
      is current only as of the date of the document. There should not be an
      expectation that such information will in all circumstances be updated,
      supplemented or revised whether as a result of new information, changing
      circumstances, future events or otherwise.





ITEM
              4.
            INFORMATION
                ON THE COMPANY.





A.
            HISTORY
                AND DEVELOPMENT OF THE COMPANY.





Carthew
      Bay Technologies Inc. (Formerly Astris Energi Inc.) ("AEI" or the "Company")
      was
      incorporated as Kayty Exploration Ltd. on March 18, 1981, pursuant to the
      Companies Act of the Province of Alberta, Canada to engage in oil and gas
      exploration activities. The Company subsequently changed its name to Kayty
      Inc.
      in August 1987, changed the place of incorporation to the Province of Ontario,
      Canada, and effected a one-for-ten reverse split of its Common Shares. In
      December 1994, the Company changed its name to WLD Inc. ("WLD") and effected
      a
      one-for-three reverse split of its Common Shares, reducing the outstanding
      Common Shares to 5,000,000 shares. By 1995, WLD had ceased exploration
      activities and sought other business activities. In February 1996, the Company
      acquired Astris Inc. in exchange for 1,500,000 Common Shares and warrants for
      the purchase of 3,500,000 Common Shares, which warrants were subsequently
      exercised in 1997 at an exercise price of CDN$0.05 per warrant. Additionally,
      in
      June 1995, the Company changed its name to





9
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Astris
      Energi Inc. The purpose of the acquisition was
      for the Company to obtain a potentially promising business activity, and Astris
      Inc. was seeking to be part of a public company to facilitate raising working
      capital to further the development of its fuel cell research.  AEI began
      trading on the OTC.BB under the trading symbol “ASRNF” on June 20, 2001. On
      August 22, 2007 the trading symbol was changed to “CWBYF” coincident with the
      change in name from Astris Energi Inc. to Carthew Bay Technologies
      Inc.




The
      Company's principal business office is located at Brookfield Place, 181 Bay
      Street, Suite 2500, Toronto, Ontario, Canada M5J 2T7 and its telephone number
      is
      (416)307-4015. The Company's e-mail address is mliik@carthewbaytechnologies.com.
      The Company maintains a website at www.carthewbaytechnologies.com. The Company
      is not incorporating, by reference in this Form 20-F, the information on its
      website.





The
      Company’s U.S. agent is CT Corporation System, 111 Eighth Avenue, 13 th Floor,
      New York City, New York, U.S.A. 10011.





B.
            BUSINESS
                OVERVIEW.





THE
      COMPANY'S PURPOSE





The
      Company's mission was to become the leading provider of affordable fuel cells
      and fuel cell power generators. The Company’s near term priority was to achieve
      the required business partnerships and financing to successfully achieve
      manufacturing capability leading to commercialization. The Company’s business
      plan called for commercialization within three years provided that adequate
      funding can be secured. With the Asset Sale in July 2007, the Company has
      changed its focus and direction and sought to maximize shareholder value. As
      such, on May 23, 2008, the Company executed an Agreement and Plan of Merger
      with
      Colorep, Inc.





DESCRIPTION
      OF THE COMPANY'S BUSINESS ACTIVITIES





Carthew
      Bay Technologies Inc. (Formerly Astris Energi Inc.) is a Canadian (Mississauga,
      Ontario) company that since 1983 had been pioneering the development of alkaline
      fuel cells (“AFCs”) and AFC generators and had a series of such power systems
      tested and ready for commercialization. While most fuel cell companies are
      targeting the eventual car-truck-bus market or large utility type generating
      stations, Carthew Bay Technologies (Formerly Astris) had specialized, in
      one-to-ten kilowatt systems which we believed would have tremendous global
      market potential. The company also anticipated linking modules together in
      larger units for larger applications.





Since
      1995, the Company had been engaged in the design, production and
      commercialization of alkaline fuel cell systems for industrial, commercial
      and
      retail markets. Specifically, the Company's main focus had been to develop
      and
      market an AFC system which could be used to provide backup or off-grid power,
      portable power for small niche vehicles.





Formerly,
      working closely with the company's development and manufacturing subsidiary
      in
      the Czech Republic, the Company had completed a series of prototype alkaline
      fuel cell generators including:





10
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A
      1-kilowatt portable system for extensive testing by the Czech military





A
      1-kilowatt fuel cell power generator capable of powering golf cars, in-plant
      delivery vehicles and other small vehicles required at airports, warehouses,
      retirement communities among others. This system was further integrated into
      the
      AFC Powered Golf Car. A second version of the AFC Powered Golf Car with 1.8
      kilowatt of fuel cell power was completed in 2005.





A
      4-kilowatt power unit capable of providing electricity, heat and hot water
      for
      individual homes, motor homes and boats.





A
      2.4-kilowatt portable power unit that can deliver backup power or portable
      power
      for a variety of applications.





The
      Company continued to demonstrate the world's first alkaline fuel cell-powered
      golf car fueled by hydrogen.  To realize the full potential of these
      markets, Astris intended to partner with or license to major manufacturers
      in
      each field.





The
      past
      three years had yielded progress for Astris in alkaline fuel cell technology.
      With prospects targeted, Astris has a series of systems ready for independent
      field tests.





Improvements
      towards automated manufacturing are required to both reduce costs and allow
      volume production. We expected to be able to commercially sell products within
      36 months, as long as the necessary financing was available. There are no
      specific requirements for certification for the sale of fuel cells at this
      time.
      However, Carthew Bay Technologies (Formerly Astris) participated in the workings
      of the CSC/IEC TC 105 (Canadian Sub-Committee to the International
      Electrotechnical Commission, Technical Committee 105) which has been set up
      to
      create such future standards. Astris will comply with all the relevant standards
      as they come into force. For specific applications standards that apply to
      certain fuel cell systems are of some interest such as: ANSI/CSA America FC
      1-2004 American National Standard/CSA America Standard for Stationary Fuel
      Cell
      Power Systems, and ANSI/CSA America FC 3-2004 American National Standard/CSA
      America Standard for Portable Fuel Cell Power Systems.





DESCRIPTION
      OF FUEL CELLS





Fuel
      cells are electrochemical devices that supply electricity directly from hydrogen
      without combustion and the associated noise and pollution. Applications are
      numerous and include three broad categories including portable, stationary
      and
      mobile. Astris fuel cells have excellent potential in all three market segments
      and current development is focused on those market segments that are expected
      to
      have earliest adoption. These early markets include stationary, portable and
      select mobile applications. Currently, many portable and stationary applications
      are served by a combination of batteries and gasoline or diesel generators.
      Since fuel cells generate electricity in an efficient and clean manner from
      the
      electrochemical reaction of hydrogen and oxygen, many early applications are
      available where existing technologies are otherwise eliminated. The fuel cell
      is
      a potential substitute for both mobile and stationary applications currently
      using a battery backup or internal combustion engine today.





11
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Examples
      of these applications included all kinds of
      vehicles, home energy requirements, commercial buildings, remote sites and
      situations requiring electricity that are not connected to distributed power
      supplies. Hydrogen can be derived from a variety of sources including
      conventional fuels such as natural gas or propane, through chemical reactions
      and through electrolysis of water. Oxygen for Astris fuel cells is drawn from
      the air.




Carthew
      Bay Technologies (Formerly Astris) fuel cells were environmentally cleaner
      and
      designed to be more cost-effective than power generation using fossil fuels.
      Fuel cells produce little noise, some heat and water as a waste product. These
      benefits offer great advantages over gasoline generators, as such generators
      are
      often responsible for producing large amounts of air and noise pollution. In
      addition, fuel cells are nominally at least two times more energy efficient
      than
      current gasoline generators and perform at high efficiency over a wide range
      of
      power requirements.





All
      Carthew Bay Technologies’ (Formerly Astris Energi) fuel cells and related
      products had been offered for sale and had been selling for years on a
      demonstration basis only, from cells to complete generators and golf cars.
      They
      had not been sold commercially because they had not been certified for
      commercial sales as of yet and improvements were still being made to the
      products so that they can be sold on a commercial basis. The products had been
      tested over a number of years.





Prior
      to
      the Asset Sale, Carthew Bay Technologies (Formerly Astris Energi), products
      fell
      into three categories. These categories were:





1.
                Fuel
                    Cell Modules such as the LABCELLTM LC50, LABCELLTM LC200 and POWERSTACKTM
                    MC250





2.
                Fuel
                    Cell Systems such as models E1, E2, E3, E4B, E5, E6, E7 and
                    E8





3.
                Test
                    Equipment such as TL5 Test Load, TL6 Test Load, TESTMASTERTM Data
                    Acquisition and Control Software Suite and the QUICKCELLTM
                    QC200





The
      state
      of commercialization is slightly different between the three different groups
      although products in all three categories have been sold to a variety of
      customers on a demonstration basis. Specifically sales from the three categories
      are summarized as follows:





1.
              Fuel
                  Cell Modules were available through a number of sales channels
                  that
                  included our direct channel (through our former website atwww.astris.caunder “ONLINE SALES”) and through a select number of resellers that
                  included the Fuel Cell Store. Sales volumes of fuel cells were
                  small.





2.
              Fuel
                  Cell Systems prior to the E7 and E8 were based on our earlier fuel
                  cell
                  stacks and were delivered to a small number of end-users including
                  academic institutions and the military. The feedback provided through
                  these interactions allowed Carthew Bay Technologies (Formerly Astris)
                  to
                  better understand the requirements of a commercial system and lead
                  to the
                  development of the POWERSTACKTM MC250 and generators based on this stack
                  technology including the E7 and E8. The current systems (E7 and
                  E8) were
                  available on a demonstration basis to a variety of selected organizations
                  that were seen as potential partners in bringing our technology
                  to
                  commercial success. As described elsewhere the strategy of Carthew
                  Bay
                  Technologies (Formerly Astris) was to partner with organizations
                  that had




12
 *Table
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  specific
        knowledge of manufacturing, certification
        and customer requirements in a variety of end-user applications. Complete
        fuel
        cell systems were made available to these potential partners in order to
        allow
        them to evaluate and validate the technology.


3.
              Test
                  Equipment was available through the same sales channels as our
                  Fuel Cell
                  Modules. Sales were immaterial but with a ready product we were
                  planning a
                  targeted advertising
                  campaign.





There
      are
      currently five basic types of fuel cell technologies: Alkaline ("AFCs"), Proton
      Exchange Membrane ("PEMFCs"), Phosporic Acid ("PAFCs"), Molten Carbonate
      ("MCFCs"), and Solid Oxide ("SOFCs"). All of these fuel cell chemistries are
      considered to have a variety of viable commercial applications. The five fuel
      cell types are divided into two groups; Low temperature (AFC, PEMFC) and High
      temperature (PAFC, MCFC, SOFC). The Company believes that low temperature fuel
      cells are the only fuel cells that currently have relevance for applications
      that require quick start-up and smaller size.  This premise is based on the
      fact that AFCs and PEMFCs operate at temperatures of 0 to 100 degrees Celsius
      and deliver power that is suited for smaller to mid-size applications.





The
      largest issue hindering fuel cell production today is that fuel cells are still
      relatively expensive to produce. The high cost of manufacturing fuel cells
      is
      primarily due to the low volume of production that does not allow for economies
      of scale. Direct material costs are currently higher than incumbent
      technologies. As demand for fuel cells increases and research and development
      continues, the cost of the fuel cell and manufacturing should be reduced to
      make
      them more competitive with traditional energy sources.





In
      addition, while fuel cells can produce energy more efficiently and are
      environmentally cleaner than traditional sources of power, other energy sources
      are more entrenched in the world economy. For instance, all golf cars currently
      being manufactured are designed to be powered from batteries or internal
      combustion engines. In order for fuel cells to be used in such products,
      manufacturers must adjust their current designs to be compatible with the fuel
      cell design.





However,
      due to new government pollution regulations, increased energy costs and a
      growing demand for "off-grid" power supplies, demand for fuel cells is
      increasing at a fast pace. As fuel cells become better known to the public
      and
      more cost competitive with other energy sources, this demand is expected to
      increase.





AFCs
      vs.
      PEMFCs





Carthew
      Bay Technologies (Formerly Astris) engineers had been engaged in development
      of
      AFCs since 1983, deciding early that this technology had both technical and
      economic advantages over the PEMFC technology that was being pursued by most
      other companies in the field. Both NASA and the Russian space program had chosen
      AFCs over PEMFCs to provide electricity, heat and pure water for all manned
      space vehicles.  This certainly supported the Carthew Bay Technologies
      (Formerly Astris) choice as a credible option. Additionally, developers in
      nearly all foreign countries have pursued alkaline technology.





13
 *Table
          of Contents*




Originally,
      critics said only governments with deep pockets could afford AFCs, that they
      could never be "brought down to earth" and be commercially competitive. In
      fact,
      AFCs are inherently more economical to produce and operate than PEMFCs. AFCs
      also provide the highest electrochemical conversion efficiency.  Their
      advantage of instant start, wide temperature range, even in sub-freezing weather
      gives AFC technology great credibility. Broad range of low-cost electrocatalysts
      (not platinum that PEMFCs require) can be built from inexpensive materials
      -
      plastics, carbon, base metals and metal oxides, etc. As well, AFCs allow for
      easier heat and water management.





ASTRIS
      FUEL CELL SYSTEM





Fuel
      cells are like batteries that can be connected to a fuel source and therefore
      will not run down as long as fuel is supplied. They generate electric power
      in a
      chemical reaction between hydrogen and oxygen from the air. They are odorless,
      noiseless and produce no polluting emissions - their only by-products are water
      and heat. The fuel cells designed and built by the Company are AFCs. While
      both
      AFC and PEMFC fuel cells have potential environmental and efficiency advantages
      over traditional power sources, the Company believes that AFCs can be
      manufactured less expensively, operated more efficiently and therefore are
      more
      practical in small and medium sized applications.





This
      alkaline system will start and operate at temperatures under 0 degrees
      centigrade. This ability to work in extreme temperatures is one of several
      advantages AFCs have over the competing PEMFC fuel cells being developed by
      others.





ALKALINE
      FUEL CELLS





An
      AFC
      system is an assembly comprised of fuel cell "stack(s)", which generate
      electricity, together with ancillary components.  In an integrated
      assembly, these “stack(s)” constitute a complete, operating fuel cell
      system.





The
      Company believed that all principal material developmental issues in alkaline
      fuel cell technology had been resolved by both the Company and the industry
      at
      large. However, the Company believed that continued research and development
      would improve alkaline fuel cell catalysts and electrode materials. This should
      improve the cost/performance ratio of alkaline fuel cells relative to more
      traditional energy sources.





The
      ancillary components to the AFC system supply, filter and re-circulate hydrogen,
      air and liquid electrolyte to the stack(s), deliver electricity to the end-use
      application, remove the aqueous by-product of the fuel cell operation, and
      electrically and electronically control, coordinate and integrate all the
      functions of the system into a single operating whole.




The
      following comments are supported by information from the following published
      books and papers, although it appears in numerous other sources:


1.
              P.
                  Gouérec, L. Poletto, J. Denizot, E. Sanchez-Cortezon, J.H.
                  Miners,The
                  evolution of the performance of alkaline fuel cells with circulating
                  electrolyte
  14
 *Table
            of Contents*
  Journal
                  of Power Sources: Volume 129, 2004, pp 193-204, Elsevier
                  Publishers2.
              Erich
                  Gülzow,Alkaline
                  fuel cells: a critical viewJournal
                  of Power Sources: Volume 61, 1996, pp 99-104, Elsevier
                  Publishers3.
              Eddy
                  De Geeter, Michael Mangan, Staf Spaepen, William Stinissen, Georges
                  Vennekens,Alkaline
                  fuel cells for road tractionJournal
                  of Power Sources: Volume 80, 1999, pp 207-212, Elsevier
                  Publishers4.
              K.
                  Kordesch, M. Cifrain,Handbook
                  of Fuel Cells – Fundamentals, Technology and
                  ApplicationsPp
                  789-793, 2003, John Wiley & Sons, Ltd, Chichester5.
              G.F.
                  McLean, T. Niet, S. Prince-Richard, N. Djilali,An
                  assessment of alkaline fuel cell technologyInternational
                  Journal of Hydrogen Energy: Volume 27, 2002, pp 507-526, Pergamon
                  Press6.
              K.
                  Kordesch inComprehensive
                  Treatise of Electrochemistry,Vol.
                  3, editor J. O’M. Bockris, Plenum Press, New York – London,
                  1985.7.
              T.G.Benjamin,
                  E.H.Camara,The
                  Fuel Cell: Key to Practically Unlimited EnergyFoote
                  Prints Vol. 48, No. 2, Foote Mineral Co., Exton, PA
                  19341.8.
              Fuel
                  Cells: A HandbookU.S.
                  Department of Energy, Morgantown Energy Technology Center, Morgantown,
                  West Virginia.




The
      basis
      of the statement that AFCs are inherently more economical to produce than PEMFCs
      is based on three major cost items required for PEMFCs; platinum catalyst,
      expensive membrane (eg Nafion) and expensive graphite flow field plates that
      must be machined. Comparatively, the AFC system developed by Astris requires
      no
      platinum, replaces the membrane with a very inexpensive solution of potassium
      hydroxide and replaces graphite plates with inexpensive epoxy or plastic frames.
      All of the references listed above (among others) make statements to support
      the
      cost advantages of AFCs. Some of these statements are included here as
      supporting material (important items highlighted):





i)
            “The
                inherent performance and cost advantages of a fuel cell with an alkaline
                electrolyte may be ascribed to two key factors. The higher kinetics
                for
                the oxygen reduction reaction (ORR) in alkaline over acidic media
                permits
                the use of a lower quantity of precious metals for a given overpotential.
                This results in a greater efficiency for the AFC when compared to
                the PEM
                as well as a large margin for the cost reduction. Secondly the alkaline
                media (i.e. KOH) is less aggressive/corrosive to metal and carbon
                than
                acid. The less-corrosive nature of an alkaline environment ensures
                a
                potential greater longevity and allows the implementation of non-noble
                catalysts, both for the cathode and the anode [6,7]. Low cost structural
                materials such as nickel current collectors and plastic composite
                frames
                are also stable in contact with





15
 *Table
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KOH.”
        Reference #1, pp 193




ii)
            “In
                practice, the alkaline cell is very well developed, simple to operate
                with
                a built-in cooling system, has excellent reliability, and is inexpensive
                to manufacture, even in small quantities.” Reference #3, pp
                207





iii)
            “Alkaline
                fuel cells are excellent and efficient performers with an excellent
                pedigree of reliability and life. While the AFC s used in space
                applications are complex and costly, the terrestrial versions, operating
                as hybrid systems with buffer battery, are not. Furthermore, the
                AFC does
                not rely on high volume manufacture to reduce the cost to an affordable
                level since the materials are inexpensive and the processing is
                straightforward.” Reference #3, pp
                212





The
      lower
      operating cost of AFCs when compared to PEMFCs are based on three facts; 1-
      The
      higher electrochemical efficiency described above results directly in lower
      consumption of hydrogen, 2- Balance of plant for the AFC system is simple and
      does not include components that have a consume considerable energy (humidifier
      and compressor) required for a PEMFC system and 3- having eliminated the
      Platinum catalyst the systems is not susceptible to carbon-monoxide (CO)
      poisoning and therefore can run on lower grade, hence less expensive hydrogen.
      Commercially available hydrogen for Astris AFCs (99.9%) costs ~$80 CAD per
      cylinder and a cylinder of same size, containing the same quantity of hydrogen
      required for platinum catalyzed fuel cells costs ~$360 CAD. Combining the lower
      fuel cost with higher efficiency the end result is a very substantial difference
      in fuel costs during operational life.





iv)
            For
                the PEMFC systems air must be supplied at high pressures to ensure
                sufficient partial pressure of Oxygen. Therefore “Air supplied by a
                controlled compressor can only solve such problems at a considerable
                over-all system efficiency loss and a high cost increase. The alkaline
                system produces the reaction water at the hydrogen anode, the acidic
                membrane system at the air-cathode. Hydrogen can be efficiently circulated
                in a closed system with a simple condenser arrangement.” Reference #4, pp
                791





v)
            From
                the Department of Energy Website: “The platinum catalyst is also extremely
                sensitive to CO poisoning, making it necessary to employ an additional
                reactor to reduce CO in the fuel gas if the hydrogen is derived from
                an
                alcohol or hydrocarbon fuel. This also adds cost.”http://www.eere.energy.gov/hydrogenandfuelcells/fuelcells/fc_types.html





In
      a
      hydrogen-oxygen fuel cell the theoretical limit of cell voltage is 1.23 V.
      Therefore a cell that produces a voltage of 1.23 V would be considered 100%
      efficient. In practice this voltage limit cannot be reached due to the peroxide
      reaction on the oxygen electrode. Reduction of oxygen takes place in two steps,
      via peroxide, in which some of the energy is irreversibly converted into heat.
      In reference #6 Kordesch shows the “Pourbaix Diagram” (after M. Pourbaix) for
      hydrogen-oxygen that characterizes the electrode voltages as a function of
      pH.
      The voltage differential between hydrogen and peroxide is constant in the range
      of pH 0 – 10, acidic (this includes PEMFC) to mild basic. At about pH = 10
      the effect of the peroxide reaction begins to be less pronounced, and by the
      time we reached pH = 15, the operation point of alkaline fuel cell, some 100
      mV
      have been gained. Everything else being




16
 *Table
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equal,
      alkaline cell will exhibit higher voltage. If
      the typical cell voltage is 0.6 – 0.7 V, the difference of 100 mV
      represents 14 – 16 % advantage. This is purely a gift from mother nature,
      not a man’s doing. In addition to the aforesaid reference #6, this fact is
      supported by a number of publications including the two presented
      here:


1.
            “Alkaline
                hydrogen/air fuel cells have an operating voltage of about 0.8V at
                300mAcm−2. Assuming that PEM fuel cells deliver 600mAcm−2 at 0.7V, this is
                a loss of 10–15% in efficiency.” Reference #4, pp
                791





2.
            “The
                higher kinetics for the oxygen reduction reaction (ORR) in alkaline
                over
                acidic media permits the use of a lower quantity of precious metals
                for a
                given overpotential. This results in a greater efficiency for the
                AFC when
                compared to the PEM as well as a large margin for the cost reduction.”
                Reference #1, pp 193





In
      addition to the advantages that have been described thus far including; higher
      electrochemical efficiency, lower cost to manufacture and lower cost to operate
      which are critical to the widespread acceptance the AFC has a number of distinct
      advantages over the PEMFC:





·
            Quick
                start-up and shutdown even in subfreezing temperatures (due to the
                fact
                that the electrolyte (KOH) freezes at below -40oC at concentrations used
                in the Astris system versus the need for water (freezes at 0oC) for
                membrane hydration in the PEMFC





·
            Better
                reaction dynamics and therefore better performance and easier start
                at low
                temperatures and pressures, noticeable already at room temperature
                and
                even more pronounced at still lower
                temperatures





·
            Wide
                range of humidity tolerance which again is related to the membrane
                hydration requirement of the PEMFC.





“Furthermore,
      the circulating electrolyte used in an AFC results in a simple and rapid
      start-up and shutdown procedures [4] and has the additional advantage of
      simplifying the water and the heat management [8].” Reference # 1, pp
      195





Glossary
      of terms





LHV
      -  lower
      heating value, amount of energy of oxidation of fuel, excluding the heat of
      condensation of product water (this is a correct basis of comparison as the
      engines in question such as fuel cell systems and internal combustion engines
      do
      not recover the heat of condensing the product water)





HHV
      -
      higher heating value, amount of energy of oxidation of fuel, including the
      heat
      of condensation of the product water





KOH-  potassium
      hydroxide





CO-  carbon
      monoxide





pH-  measure
      of acidity/alkalinity. pH=7 denotes a neutral solution; pH less than seven
      denotes acidic solutions, pH greater than seven denotes basic (alkaline)
      solutions




17
 *Table
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THE
      COMPANY'S PRODUCTS PRIOR TO THE ASSET SALE





The
      Company previously offered products ranging from demonstration and educational
      fuel cells and accessories, to scientific products such as electrochemical
      test
      cells, associated electronic and computer based test equipment. This test
      equipment was useful in research and development and the testing of electrodes,
      fuel cells and batteries, and sub-kilowatt fuel cells and stacks.





The
      Company believed the POWERSTACKTM MC250 could be used for fuel cell systems up to
      10 kilowatts or more for use in uninterrupted power supplies, portable
      generators and small vehicles such as forklifts. The Company anticipated that
      such a fuel cell will be ready for commercial application within the next one
      to
      three years depending on funding.





The
      Company's principal fuel cell products were the POWERSTACKTM MC250, E8 generator
      and Astris II golf car. These demonstrator units were pre-commercial products
      provided on a limited basis to individual customers and assembled by hand.
      These
      demonstration units were in contrast to "pilot production" systems, which were
      systems manufactured in a pilot production facility not on a full commercial
      basis, and to commercial systems, which are manufactured by volume production
      methods. The Company had begun test runs of its pilot production line to produce
      the POWERSTACKTM MC250.





POWERSTACKTM
      MC250 was a 250 square centimeter, medium size alkaline fuel cell. In early
      test
      results the POWERSTACK MC250 performed 60% over the original design
      specification.  The POWERSTACK MC250 makes a large step in increasing power
      density and overall performance when compared to its predecessor the LABCELL.





MODEL
      E8
      PORTABLE AFC GENERATOR





MODEL
      E8
      Portable Power Generator was an advanced touch start fuel cell system that
      offered up to 2.4kW of power primarily targeted for back up power requirements.
      The E8 fuel cell generator was partially developed by the Company's Czech
      Republic subsidiary in a joint project partially funded by the Czech Ministry
      of
      Industry and Trade.





ASTRIS
      II
      GOLF CAR





The
      Astris II was the Company’s second-generation golf car. The new, faster golf car
      was powered by Carthew Bay Technologies’(Formerly Astris) recently completed
      1.8kW, Model E7 AFC Generator, which gave the Astris II double the power and
      double the acceleration of the original model which was the world’s first
      alkaline fuel cell powered golf car using hydrogen. The intellectual property
      of
      the actual golf car belongs to the supplier from whom AEI bought the golf car,
      E-Z-Go. AEI simply bought the golf car and added its E8 generator to replace
      the
      existing battery engine.




18
 *Table
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In
      addition to the Company's principal fuel cell products, the Company had several
      small fuel cells and products, primarily for educational purposes and testing,
      for sale through its website.





SMALL
      FUEL CELLS AND RELATED PRODUCTS





In
      addition to developing fuel cells, the Company previously sold by mail order
      small fuel cells, test cells and electronic test equipment. They are described
      briefly, as follows:





LABCELLTM
      LC50 was a 50 square centimeter, small alkaline fuel cell for laboratory
      demonstration and experimentation which produces 1.5 to 6 volts.





LABCELLTM
      LC200 was a 200 square centimeter, medium size alkaline fuel cell for laboratory
      experimentation and small power applications which produces .75 to 12
      volts.





QUICKCELLTM
      QC200 was an electrochemical test cell designed for the testing of gas diffusion
      or solid electrodes in a controlled laboratory environment for fuel cell and
      battery research, development and quality control.





MODEL
      TL5
      TEST LOAD was a monitor for fuel cells and batteries with a built-in
      microprocessor. It functioned to briefly interrupt the current and take
      resistance-free cell readings up to 40 volts. TL5 had a maximum power
      dissipation of 100 watts.





MODEL
      TL6
      TEST LOAD was a monitor for fuel cells and batteries with a built-in
      microprocessor. It functioned to briefly interrupt the current and take
      resistance-free cell readings up to 40 volts. TL6 had a maximum power
      dissipation of ten times more than the TL5, up to 1,000 watts.





TESTMASTERTM
      was a powerful, integrated software package designed for testing fuel cells
      and
      batteries. TESTMASTER performed all the tasks required for short-term or
      long-term testing of fuel cells or batteries, monitoring, control, data
      collection and storage, and graphical data representation.





Astris
      s.r.o. produced and shipped electrodes on behalf of the Company. The Company
      did
      not have any insurance on these products. Shipping insurance was obtained at
      the
      customer's request and expense. Astris s.r.o. did not maintain a substantial
      inventory of electrodes or fuel cells.





The
      Company previously derived minor amounts of revenues from the sale of small
      products.





The
      Company was primarily targeting markets in North America and Europe for the
      sale
      of small stationary, portable and select mobile applications including light
      vehicles and emergency power supplies.





RESEARCH
      AND DEVELOPMENT





AEI
      had
      been involved in fuel cell research since its formation in 1995. Over CDN$18
      million has been expended since then.  AEI had entered into the 1995
      acquisition with WLD to be in a better position to raise capital for




19
 *Table
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additional
      research and development. As sufficient financing was not obtained as part
      of
      the AEI acquisition, some of the research and development activities in Canada
      were curtailed. Because labor costs are significantly lower in the Czech
      Republic than in Canada, and the capital needs of Astris s.r.o. for research
      and
      development activities are less than what would have been required in Canada,
      the Company's research and development on fuel cells had primarily been carried
      out in the Czech Republic, through the Company's wholly owned subsidiary, Astris
      s.r.o.





Astris
      s.r.o. had been engaged in fuel cell research and development since 1992. Its
      research and development efforts were primarily focused on electrode technology
      to improve the electrochemical efficiency, durability and economy of alkaline
      fuel cells.  These research and development efforts had also been focused
      on reduction of production costs, improving product quality and consistency,
      and
      on identifying new features and innovations for future product development.
      Funds advanced from the Company for expenditures on manufacturing and research
      and development at Astris s.r.o. were approximately CDN$367,000 for 2006. For
      the years ended December 31, 2005, the Company expended a total of approximately
      CDN$ 909,873 on research and development. The research and development budget
      for 2007 was contingent upon the Company's ability to raise
      capital.





The
      Company's research and development activities had been performed both at the
      Mississauga, Ontario headquarters and at the Astris s.r.o. facility in the
      Czech
      Republic. Of the research and development completed in Canada during 2006 the
      Company received or received notification of investment tax credit refunds
      $NIL.
      The 2005 refunds of $283,900 were received in March 2007.





The
      Company had also completed the initial research in the development of an
      advanced fuel cell stack design for systems of up to 25 kilowatts or larger
      for
      use in commercial buildings and automobiles. Such fuel cells were to be
      developed initially as prototypes and then later to be developed as commercial
      products.





The
      Company's had projected initial manufacturing and research and development
      budget for 2007 is CDN$1.8 million subject to financing. Such amount would
      be
      used to continue development and production of the POWERSTACK MC250 fuel cell
      power module. If less than CDN$2.5 million was obtained from financing, the
      Company would have had to reduce its research and development budget and the
      development and production of the fuel cell power module would have continued,
      albeit at a slower pace. If no adequate funding is secured, the research and
      development of the Company's fuel cell products will have to be deferred until
      such financing was in place.





INTELLECTUAL
      PROPERTY





In
      1986,
      Josef V. Soltys of Mississauga, Canada (a shareholder and former director of
      the
      Company), assigned to AI a Canadian patent application for QUICKCELL, a test
      cell structure for fuel cell technology. The patent, Canadian Patent #1,295,679,
      issued February 11, 1992, expires February 11, 2009. The Company also holds
      a
      United States patent, #5,0008,162, which was issued on April 16, 1991, and
      expires on April 16, 2008, for the same product. A former employee of AI, who
      was a co-inventor of such technology,




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did
      not assign any right in such patents to the
      Company prior to his departure.  Management does not believe that these
      patents are material to the development of the intended business goal and the
      Company ceased maintaining the patent.   The following are current patents
      and patent applications:


§
            Electrode
                Structure for Stacked Alkaline Fuel Cells – Patent


o
            Applications:


§
            11/004988


§
            PCT
                PCT/CA2005/001857


§
            PCT
                PCT/CA2006/000331


§
            11/567420


o
            Patent:


§
            7166383
                US – expires Dec 7, 2024


§
            Alkaline
                Fuel Cell System – Patent
                Pending


o
            Applications:


§
            10/905148


§
            PCT/CA2005/001927





The
      Company's policy was to maintain the confidentiality of its products through
      trade secrecy.





The
      Company had unregistered trademarks on some of its products, including LABCELLTM
LC50, LABCELLTM LC200, QUICKCELLTM QC200, POWERSTACKTM MC250 and TESTMASTERTM.





The
      Company had copyright protection on its TL6 Testload, TL5 Testload and
      TESTMASTERTM software.





The
      alkaline fuel cell electrode technology which had been developed by the
      Company’s subsidiary, Astris s.r.o., was solely owned by Astris s.r.o. No other
      party had rights to the electrode technology developed by Astris s.r.o. prior
      to
      the asset sale in July 2007. The Company, which had 30% beneficial ownership
      of
      Astris s.r.o. prior to the acquisition effective January 2, 2005, had full
      ownership of Astris s.r.o and its technology.





MARKETING





The
      Company had a limited production capacity for its demonstration and scientific
      products. While direct sales efforts were to continue through the Internet,
      Carthew Bay Technologies’(Formerly Astris) principal strategy was to form joint
      ventures with leading manufacturers of the products that could use fuel cell
      power.  Manufacturers in the back up power and UPS industries were believed
      to be the primary targets. Manufacturers in the golf car, NEV and/or
      recreational vehicle industries were believed to be secondary targets.  As
      an alternative, the Company was also considering licensing such manufacturers
      to
      both produce and market the Astris power sources on an O.E.M. basis, with Astris
      collecting both license fees and royalties based on sales.





Such
      established industry specific companies already have manufacturing facilities
      and marketing organizations in place and provide an intimate knowledge of their
      respective markets. These types of strategic business relationships would
      have allow Astris to continue specializing in its




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business
      expertise, which was the development of new
      products for the burgeoning international fuel cell field.




In
      October 2000, the Company entered into an agreement with FuelCellStore.com,
      Inc.
      for the inclusion of the Company's products on the FuelCellStore.com internet
      website on a non-exclusive basis for sales anywhere in the world.
      FuelCellStore.com, Inc. received a ten percent (10%) commission based upon
      sales
      of the Company's products over its internet website.





Previously,
      the Company's fuel cell products were shipped to the customer from Canada.
      It
      was expected that the future customers of the Company's fuel cell systems would
      have been manufacturers of all types of products which would be adapted to
      utilize the Company's fuel cell technology. The Company expected such fuel
      cell
      systems would have been shipped directly from its facilities to such
      manufacturers or through a network of distributors and agents to such
      manufacturers.





RAW
      MATERIALS AND SUPPLIES





The
      principal raw materials that the Company used were common and widely available
      from numerous suppliers. The Company's principal materials were largely various
      types of plastics, carbons, metals and their compounds and conventional
      components, which were all relatively inexpensive to obtain and which did not
      present supply problems.





COMPETITION





Fuel
      cells are a competitive business. Competition arises from other fuel cell
      companies and from entities engaged in offering existing conventional energy
      services. The Company competed with companies that were developing all types
      of
      fuel cells. While there were previously five basic types of fuel cell
      technologies (see "Description of Fuel Cells" above), the Company believed
      that
      AFCs and PEMFCs were the only fuel cells that were of competitive relevance
      for
      the relatively small power, stationary and portable applications that the
      Company intended to focus upon. This was because AFCs and PEMFCs normally
      operate at ambient temperatures (above 0 degrees Celsius to 100 degrees Celsius)
      and deliver kilowatts, which are more suited to meet the needs of small,
      off-grid applications. The Company constructs only AFCs. While both AFC and
      PEMFC fuel cells have potential environmental and efficiency advantages over
      traditional power sources, the Company believed that AFCs could be manufactured
      less expensively, more efficiently and more practically than PEMFCs in
      small-scale applications.





Carthew
      Bay Technologies (Formerly Astris) had essentially no competition in any
      application area using alkaline fuel cells where its 1 kilowatt to 10 kilowatt
      power systems were targeted. Other AFC companies in the early R&D stages
      include Apollo Energy Systems and Ovonic Fuel Cell Company. The Company is
      focusing on the potential market in back up and UPS applications of
      small-capacity fuel cells, as are other PEMFC fuel cell companies. There are
      several competitors in this market including Ballard Power Systems, Hydrogenics,
      Plug Power, Ida Tech and Nuvera Fuel Cells. There are no barriers to Ballard,
      or
      any other known or unknown competitor of




22
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the
      Company, entering the market covering the
      industries that the Company is focusing on.




Apart
      from specific market competition, the Company believed that AFCs have inherent
      advantages over PEMFCs, regardless of specific applications. AFCs use potassium
      hydroxide electrolyte, a chemically basic substance, while PEMFCs are chemically
      acidic, requiring platinum as a catalyst. They also use an expensive membrane
      as
      an electrolyte. In addition, AFCs have been scientifically proven to be 10%
      more
      energy-efficient than PEMFCs and offer a higher electricity yield from a given
      quantity of fuel. That is to say, while PEMFCs might be 40-50% efficient, AFCs
      are 50-60% efficient. This provides a significant advantage in terms of raw
      energy consumption and cost savings. In addition, AFCs are able to start
      instantly, without warm-up, even below freezing, to minus 30-40 degrees Celsius.
      PEMFCs can only operate above freezing from 0 degrees Celsius to 80 degrees
      Celsius unless a heating mechanism is added, causing significant loss of
      efficiency and extra cost.





Effective
      July 31, 2007, Carthew Bay Technologies Inc. sold substantially all of its
      assets to MKU Canada Inc. to pursue other opportunities for its shareholders
      and
      to maximize shareholder value. As was announced in December 2007, Carthew Bay
      Technologies signed a Letter of Intent to enter into an Agreement and Plan
      of
      Merger with Colorep, Inc. whereby shares of Carthew Bay Technologies will be
      exchanged for all issued and outstanding shares of Colorep, Inc. US$1.0 Million
      was advanced to Colorep on February 1, 2008 in respect to the secured debenture
      financing. The Agreement and Plan of Merger was executed on May 23, 2008 and
      a
      second US$1.0 Million was advanced with respect to the secured debenture
      financing. It is expected that a shareholder meeting will be called for the
      fall
      of 2008 to approve the RTO transaction.





LEGAL
      PROCEEDINGS





On
      June
      30, 2004 the Quebec Superior Court ruled in Carthew Bay’s favour and supported
      its application to immediately wind up and liquidate Astris Transportation
      Systems Inc. (“ATSI”), a corporation that was formed jointly with Care
      Automotive Inc.(“Care”). A liquidator was selected to dissolve ATSI. On January
      26, 2007 the Quebec Superior Court granted the motion to the Company to dissolve
      ATSI and discharged the liquidator.





There
      are
      no current legal proceedings.





GOVERNMENTAL
      REGULATION





The
      Company knows of no governmental license or approval required in connection
      with
      the manufacture or sale of the Company's current products. There are no
      extraordinary governmental regulations known to the Company that affects its
      ability to sell or produce its products. The Company does not believe that
      it
      will be subject to existing regulations governing traditional electric
      utilities.




The
      Company knows that its products must comply, where applicable, with the existing
      rules and regulations for electrical and electronic products, and is prepared
      to
      meet such requirements.




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The
      Company anticipated that its products and their installation may have been
      subject to oversight and regulation related to their safety due to their use
      of
      hydrogen, which is flammable and regarded as a hazardous gas. However, hydrogen
      is a commonplace industrial gas, which is produced in enormous quantities every
      day in numerous industrial facilities around the world. Regulations have been
      in
      place for decades regarding hydrogen, which provide routine specifications
      for
      manufacturers of hydrogen-using equipment.  Therefore, the Company does not
      anticipate any new regulations regarding hydrogen, or any difficulties in
      complying with existing regulations.





ENVIRONMENTAL
      COMPLIANCE





There
      are
      no environmental laws known to the Company, which may affect any of its
      operations as they are currently constituted. The Company is not involved in
      a
      business which involves the use of materials which are likely to result in
      a
      violation of any existing environmental laws, rules or regulations, nor does
      it
      own any real property which would lead to liability as a land
      owner.





C.
            ORGANIZATIONAL
                STRUCTURE.




The
      Company had a subsidiary, Astris Inc. ("AI") which was amalgamated with Carthew
      Bay Technologies Inc. (Formerly Astris Energi Inc.) ("AEI") effective January
      1,
      2005. AI was incorporated initially as Astris Science Inc. on April 8, 1983,
      in
      the Province of Ontario, and changed its name to Astris Inc. in 1986. AEI also
      owns 100% of holding company 2062540 Ontario Inc.("Holdco"), incorporated in
      the
      Province of Ontario on January 12, 2005. Holdco owns 100% of Astris s.r.o.,
      which was organized under the laws of the Czech Republic.  The Company, up
      until January 27, 2005 owned a 30% minority interest in Astris s.r.o. The
      Company transferred its 30% ownership to Holdco as part of the acquisition
      of
      the remaining 70% of Astris s.r.o. The remaining 70% interest in Astris s.r.o.
      was owned by Macnor Corp., an Ontario corporation that is wholly owned by Jiri
      K. Nor, an Executive Officer, Director and principal shareholder of the Company.
      Unless otherwise indicated or outside the context of the disclosure, all
      references to the Company shall include AI, 2062540 Ontario Inc. and Astris
      s.r.o.





Effective
      July 31, 2007, Carthew Bay Technologies sold substantially all of its assets
      including “Holdco” to MKU Canada Inc. On August 22, 2007 Carthew Bay
      Technologies announced that it had changed it’s name from Astris Energi Inc. to
      Carthew Bay Technologies Inc.





D.
            PROPERTY,
                PLANT AND EQUIPMENT (FIXED ASSETS).





The
      Company currently has no Fixed Assets as they were sold to MKU Canada, Inc
      as of
      July 31, 2007.





ITEM
              5.
            OPERATING
                AND FINANCIAL REVIEW AND PROSPECTS.





The
      following is a discussion of the results of operations and financial condition
      of the Company for the fiscal years ended December 31, 2007, 2006 and 2005.
       The financial statements are prepared in accordance with Canadian
      generally accepted accounting principles (“GAAP”) and are presented in




24
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Canadian
      dollars.  Differences between Canadian
      GAAP and United States GAAP can be found in Note 13 of Item 17 of this filing.
       This discussion should be read in conjunction with the consolidated
      financial statements and notes thereto forming a part of this annual
      report.




In
      2003,
      the Company began expensing all employee stock-based compensation.





As
      noted
      under “Liquidity and Capital Resources” herein, the future of the Company is
      dependent upon its ability to raise additional capital to fund the commencement
      of the commercialization of products based upon the Company’s fuel cell
      technology. Management is of the opinion that the Company should continue to
      exist and grow, based upon encouraging results of research and development
      to
      date, recent world-wide interest in fuel cell technology and the completion
      of
      the golf car program. With the advancement of this research and development
      program, and the completion of the Company’s POWERSTACK MC250 program, the
      Company is in a better position to pursue financing in the form of private
      placements of its Common Shares.





The
      following discussion, as well as other sections within this annual report,
      contain forward-looking information which is based on current expectations
      and
      entails various risks and uncertainties. These risks and uncertainties could
      cause or contribute to actual results that are materially different from those
      expressed or implied.  The forward-looking information contained in this
      document is current only as of the date of the document. There should not be
      an
      expectation that such information will in all circumstances be updated,
      supplemented or revised whether as a result of new information, changing
      circumstances, future events or otherwise.





The
      only
      critical accounting policy is income taxes. Because there is uncertainty when
      the Company will make sufficient profits in future years to absorb the losses
      before they expire, the Company takes a valuation allowance which results in
      no
      tax being recovered.





A.
            OPERATING
                RESULTS.





The
      financial statements included in this report are stated in Canadian
      dollars.





REVENUE





For
      the
      year ended December 31, 2007, revenue from the sale of fuel cells and related
      products and contract work was $31,290 compared with $85,915 for the same period
      in 2006 and $291,512 for the same period in 2005. The decrease in sales in
      2007
      reflect the lack of a major order as it had from El.Ma in 2005. Sales of fuel
      cells and related products to unrelated parties in 2007 amounted to $146 to
      Canada, $0 to the Czech Republic and $31,144 to the rest of the World; in 2006
      amounted to $17,220 to Canada, $763 to the Czech Republic and $67,932 to the
      rest of the world; in 2005 amounted to $53,019 to Canada, $10,381 to the Czech
      Republic and $228,112 to the rest of the world.





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EXPENSES





For
      the
      year ended December 31, 2007, expenses totaled $2,539,133 compared with
      $2,206,337 for the same period in 2006, compared with $5,622,376 for the same
      period in 2005. The main variance in 2006 was due to the recognition under
      US
      GAAP of the unrealized gain on derivatives, the reduction of General and
      Administrative expenses due to lack of funds and the one time accounting write
      off of $1,500,000 of the technology acquired by the Company on the purchase
      of
      Astris sro in 2005. Under US GAAP, the acquisition of this significant
      technology cannot be recognized as an asset. General and Administrative expenses
      were $1,011,960 in 2007 as compared to $1,326,539 in 2006 compared with
      $2,537,127 in 2005 due to an decrease of approximately $575,000 in Business
      development and Marketing costs, a decrease of approximately $230,000 in
      Promotion, bonuses and Directors compensation and a one time anti-dilution
      payment of $249,000.





Professional
      fees were $435,067 as compared to $264,742 in 2006 and $333,555 in 2005,
      reflecting the Company’s continued corporate activity, legal activity,
      accounting and compliance activity in conjunction with the debenture financing
      and the increased costs due to being a public company in the United
      States.





NET
      GAIN
      FOR THE YEAR ENDED DECEMBER 31, 2007





The
      Company reported a net gain of $1,995,088 (a gain of $0.04 per share basic
      and
      diluted) for the year ended December 31, 2007, compared with a loss of
      $2,120,422 (a loss of $0.05 per share basic and diluted) in 2006. This is the
      result of the gain on the sale of substantially all of the assets of the
      Company





The
      Company reported a net loss of $5,330,864 (a loss of $0.16 per share basic
      and
      diluted) for the year ended December 31, 2005, compared with a loss of
      $3,462,257 ($0.26 per share basic and diluted) in 2004. The increase in the
      loss
      primarily reflects the increased expenses due to the write off of the intangible
      technology asset, write off of Astris sro acquisition costs, increased
      compensation to consultants and additional warrant and option
      expense.





As
      at
      December 31, 2007, the Company has non-capital loss carry forwards of
      approximately $8,975,000. If unused, the tax losses will expire as
      follows:




2010
            
            $
            1,228,0002014
            
            $
            2,882,0002015
            
            $
            3,030,0002026
            
            $
            1,835,000





In
      addition, the company has non-deductible scientific research and development
      expenditures amounting to $2,120,000, which have no expiry date.





B.
            LIQUIDITY
                AND CAPITAL RESOURCES.





The
      Company had a net cash flow of $2,522,350 in 2007, compared with a net cash
      flow
      deficit of $5,776 in 2006, compared with an operating cash flow




26
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deficit
      of $150,494 in 2005,. The increase is the
      result of the sale of substantially all of the assets of the
      Company.




At
      2007
      year end, the Company had $2,634,698 of assets and a shareholders’ equity of
      $2,551,811 compared to a shareholders’ deficiency of $53,221 in 2006.





The
      Company does not have any off-balance sheet arrangements.





During
      2006, the Company raised $1,856,750 through the convertible debentures below
      and
      the leasing of $28,360 of capital equipment. During 2005, the Company raised
      $493,350 through the convertible debenture described below and the issuance
      of
      shares for options exercised. During 2004, the Company raised $2,076,041 through
      private placements of shares and warrants.





On
      March
      28, 2005, the Company announced that it had closed a convertible debenture
      financing for gross proceeds of CDN$420,000. The debenture was available for
      subscription to “Canadian accredited investors” only and included a coupon for
      6%, payable in common shares upon conversion or maturity. Each debenture is
      convertible into Common Shares at a conversion rate that in no case shall be
      less than USD$0.20 or more than USD$0.70. Warrants may be issued to the
      debenture holders depending on the terms of a second larger equity financing.
      The debentures mature on December 10, 2005, 270 days from the date of issuance.
      Total net proceeds were CDN$378,000. Fraser Mackenzie Limited, for facilitating
      the funding, also received 156,000 broker warrants exercisable at CDN$0.27
      until
      March 24, 2007. These debenture holders agreed to amend this debenture to the
      same terms of the Cornell Capital debenture described below.





On
      April
      12, 2006, the Company issued a press release announcing the completion of a
      One
      Million Five Hundred Thousand Dollars ($1,500,000) million financing (the
“Financing”). The Company entered into a Securities Purchase Agreement (the
“Agreement”) on April 10, 2006 with Cornell Capital Partners, LP, an
      institutional investor (the “Investor”), relating to the sale of One Million
      Five Hundred Thousand Dollars ($1,500,000) of secured convertible debentures
      (the “Convertible Debentures”), which will be convertible into shares (the
“Conversion Shares”) of the Company’s common stock (the “Common Stock”) of which
      Seven Hundred Fifty Thousand Dollars ($750,000) was funded on April 18, 2006
      (the “First Closing”) and Seven Hundred Fifty Thousand Dollars ($750,000) was
      funded on June 9, 2006, for a total purchase price of up to One Million Five
      Hundred Thousand Dollars ($1,500,000), (the “Purchase Price”). Pursuant to the
      Agreement, the Investor also received common stock purchase warrants (the
“Warrants”) to purchase (i) 1,000,000 shares of the Company's common stock at an
      exercise price of $.30 per share (ii) 600,000 shares of the Company's common
      stock at an exercise price of $.20 per share and (iii) 1,600,000 shares of
      the
      Company's common stock at an exercise price of $.19 per share. The Company
      received net proceeds from the First Closing Six Hundred Seventeen Thousand
      Five
      Hundred Dollars ($617,500) and Six Hundred and Fifty-Two Thousand Dollars
      ($652,000) in the second closing, which are to be used primarily for working
      capital purposes.




The
      Convertible Debentures have an initial conversion
      price of the lesser of (i) a price equal to $.2483 (the “Fixed Conversion
      Price”) or (ii) ninety percent (90%) of the lowest daily Volume Weighted
      Average Price of the




27
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Common
      Stock during the ten (10) trading days immediately preceding the Conversion
      Date
      as quoted by Bloomberg, LP per share and provides for anti-dilution protection
      (in certain circumstances). At the Fixed Conversion Price, the Convertible
      Debentures will be convertible into an aggregate of 6,041,079 shares of common
      stock. The Convertible Debentures bear interest at 10% per annum. Interest
      is
      payable in cash or, at the Company's option, in shares of common stock (the
      “Interest Shares”) provided certain conditions are satisfied. At any time after
      their respective issuance dates and prior to April 9, 2009, the Convertible
      Debentures may be redeemed at the election of the Company at the principal
      amount plus a redemption premium equal to 20% of the principal amount being
      redeemed, plus accrued but unpaid interest, subject to the satisfaction of
      certain conditions.





The
      Investor was granted a security interest in the assets of the Company and the
      assets of the Company's subsidiary, 2062540 ONTARIO INC.





The
      Warrants may be exercised for cash, as indicated above, and also contain a
      cashless exercise provision, which may be exercised in certain circumstances.
      The Warrants provide for anti-dilution protection in certain circumstances.
      The
      Warrants are exercisable for 1,000,000, 600,000 and 1,600,000 shares of Common
      Stock (the “Warrant Shares”), respectively, and if fully exercised for cash at
      the initial exercise price, the Warrant would yield approximately $724,000
      of
      additional proceeds to the Company.





The
      Company filed a registration statement (the “Registration Statement”) with the
      SEC in order to register the resale of the shares issuable upon conversion
      of
      the Convertible Debentures and the shares issuable upon exercise of the
      Warrants. The registration was declared effective on July 21, 2006.





Pursuant
      to the Securities Purchase Agreement, the Investor has certain rights to
      participate in future financings of the Company. In addition, subject to certain
      exceptions, so long as any of the Convertible Debentures are outstanding, the
      Company may not, without the prior written consent of the investor, issue shares
      of common stock or common stock equivalents.





Pursuant
      to the Securities Purchase Agreement, the Company and the Investor entered
      into
      a Share Escrow Agreement and an Irrevocable Letter of Instructions to the
      Company’s transfer agent (the “Transfer Agent”). Pursuant to the Share Escrow
      Agreement, the Irrevocable Letter of Instructions is being held by an escrow
      agent (“Escrow Agent”) and upon the occurrence of an “Event of Default” (as that
      term is defined in the Convertible Debentures) may be delivered to the Transfer
      Agent by the Escrow Agent directing the Transfer Agent to issue 34,500,000
      shares of Common Stock to the Investor without any further action by the
      Company.





The
      Investor may not convert the Convertible Debentures or exercise the Warrant
      to
      the extent that, after giving effect to such conversion or exercise, as the
      case
      may be, the Investor would beneficially own in excess of 4.99% of the number
      of
      shares of common stock of the Company outstanding immediately after giving
      effect to such conversion or exercise, calculated in accordance with Section
      13(d) of the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder. Such limitation with respect to such
      conversion or exercise may be waived by the Investor upon not less than 65
      days
      prior notice to the Company.




28
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The
      offering, sale and issuance of the Convertible Debentures and the Warrants
      were
      effected pursuant to the exemption from registration provided by Rule 506
      promulgated under the Securities Act of 1933, as amended. The Convertible
      Debentures and Warrants have not been registered under the Securities Act of
      1933, as amended, and confirmed the Company has been notified that all existing
      convertible debentures are now owned by ACME Global Inc., a Delaware corporation
      and may not be offered or sold in the United States absent registration or
      an
      applicable exemption from registration requirements.





We
      use
      options to pay non employees who provide services to us. Also all of our senior
      management have been willing to support the company through accepting part
      cash
      and part equity for their services provided.





PROSPECTS





On
      October 19, 2004, the company announced that it signed a Cooperation Agreement
      with Italy’s Electronic Machining s.r.l. (El.Ma.). El.Ma. is a privately held
      company with offices and technical development facilities in Rovereto, Trento,
      Italy. El.Ma. has particular interest in the development of alkaline fuel cells
      for stationary and distributed generation of electrical power. Their fuel cell
      and hydrogen usage R&D is funded by the Provincia Autonoma di Trento, which
      is committed to the development of these technologies with an eye to early
      market opportunities in Europe. As well, El.Ma. specializes in research and
      advancement of manufacturing processes, an expertise applicable to Carthew
      Bay’s
      current AFC production line initiative. Under the terms of the agreement,
      Carthew Bay Technologies (Former Astris) will licence the use of its AFC
      technology and market its products and consulting services to El.Ma. All goods
      and services provided by Astris will be purchased by El.Ma. El.Ma will apply
      its
      research and manufacturing expertise to the development of Astris technology
      in
      the areas of production. Any intellectual property resulting from the execution
      of the agreement will be owned exclusively by Carthew Bay Technologies (Formerly
      Astris). The agreement has an initial term of 3 years, extension upon mutual
      consent. Either party can terminate upon 60-day written notification to the
      other party. Astris may terminate immediately if El.Ma is in breach of the
      agreement and does not remedy within 15-days. Compensation in the amount of
      50,000 stock options in the Company was issued to Energie Rinnovabili Italia
      srl
      for assisting in co-ordinating the agreement with El.Ma. Carthew Bay
      Technologies (Formerly Astris) earned approx. $200,000 in revenue from El.Ma
      to
      date.





On
      February 24, 2005, the Company announced that it signed a non-exclusive Teaming
      Agreement with Plasma Environmental Technologies Inc. (PET) (TSXV: PE) of
      Burlington, Ontario for the development of a real-world installation utilizing
      PET’s hydrogen-producing waste processing system and Carthew Bay’s AFC
      technology. There was no compensation paid to any party for this agreement.
      The
      agreement has an initial term of 5 years with the potential for an additional
      5
      years upon mutual consent. The agreement may be terminated upon 30-day written
      notification by either party.





The
      first
      of three phases outlined in the agreement will be to determine the suitability
      of the hydrogen gas produced in the PAG waste destruction process for use in
      Carthew Bay’s hydrogen AFC systems and for PET to make adjustments, if necessary
      to their current PAG.




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Upon
      completion of Stage 1, Stage 2 of the Agreement calls for PAG installations
      that
      will be developed to demonstrate the practical application of the PAG process
      in
      conjunction with Carthew Bay’s AFC-powered generators. It is anticipated that
      this Stage will be financed by appropriate stakeholders such as local,
      provincial or federal governments, or special interest groups.





In
      addition, PET has agreed to introduce Astris to any of its current or future
      clients who might desire to purchase or use Carthew Bay’s services or products.
      For this, PET will be paid a mutually agreed to commission.





On
      August
      4, 2005, the Company announced that Astris s.r.o., the wholly owned European
      subsidiary of Carthew Bay Technologies Inc. (Formerly Astris Energi Inc.),
      received a grant from the Ministry of Industry and Trade (MPO) of the Czech
      Republic. The funding will be used to subsidize Carthew Bay’s fuel cell
      development efforts at its Czech based subsidiary.





The
      amount of funding is approx. 8,750,000 Czech Korunas (CZK) or approx. USD $0.4
      million against anticipated program spending of 17,500,000 CZK or approx.
      USD$0.8 million over the next 2 1⁄2 years. The company believes that every USD $1
      spent in the Czech Republic is comparable to at least USD $5 spent in North
      America due to the lower working and living costs in the Czech
      Republic.





Currently
      it is the largest fuel cell grant ever awarded by the MPO in the Czech Republic,
      it is indicative of the growing global government support for fuel cells. The
      work will be carried out by the Astris scientific team in cooperation with
      several leading academic and industrial institutions, including the Institute
      of
      Macromolecular Chemistry of the Academy of Sciences of Czech Republic, and
      the
      Department of Chemical Technology of University of Pardubice.





On
      November 23, 2005, the Company signed an agreement with Tropical S.A. in Greece,
      whereby Tropical becomes a reseller for Carthew Bay’s alkaline fuel cell power
      generator products, fuel cells and test equipment.





The
      purpose of this Reseller arrangement is to enable Tropical to demonstrate and
      make available Astris products primarily within the Greek market. Tropical
      S.A.,
      Athens, Greece, is a leading organization in Renewable Energy and Hydrogen
      Technologies markets. The agreement may be terminated by either party with
      30
      day notice for any reason.




On
      October 26, 2005, the Company hired Ardour Capital Investments LLC (“Ardour”) as
      its exclusive financial advisor. For a 24 month engagement, Ardour will receive
      1,250,000 common shares of Astris stock. Ardour is also entitled to 7%
      commission on any funds raised through them. In January 2008 625,000 shares
      were
      issued to Ardour for the ending of the engagement on October 26,
      2007.





On
      June
      5, 2007, the company executed a binding asset purchase agreement with MKU Canada
      Inc., a corporation incorporated under the laws of Ontario, Canada, a
      wholly-owned subsidiary of Green Shelters Innovations Ltd. (“GSI”), a
      wholly-owned subsidiary of Green Shelters (India) Private Ltd, to sell
      substantially all of its assets to MKU Canada Inc.




30
 *Table
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This
      transaction, which was negotiated by the Special Committee of the Board of
      Directors of Astris, includes the sale of substantially all of the assets of
      the
      Company, including its fuel cell and test load technology assets for
      consideration of: (i) approximately US$3.1 Million in cash; (ii) forgiveness
      of
      US$1.6 Million of face value secured convertible debentures held by ACME Global
      Inc. (a subsidiary of GSI) and accrued interest of US$175,000; (iii) an option
      for Astris to redeem , for
      nominal consideration and then cancel 4,248,750 shares recently acquired by
      ACME
      Global Inc. for US$0.08 per share; and (iv) a secured convertible promissory
      note funding commitment of a minimum of US$150,000 per month to finance
      operations to closing and to be forgivable thereafter.




Immediately
      after closing, existing management will resign both as officers and directors
      of
      the Company. It is the intention of the Board of the Company to appoint a new
      CEO with a mandate to utilize the remaining cash and residual tax losses to
      seek
      new business opportunities.




The
      obligation of the parties to consummate this transaction will be subject to
      the
      following primary conditions: 1) no material adverse change to Carthew Bay’s
      business; 2) execution of employment agreements between GSI and key personnel
      of
      Astris; 3) completion prior to July 31, 2007; 4) approval by at least two thirds
      of the votes cast at a Special Meeting of Astris shareholders on July 10, 2007;
      5) closing terms typical of an asset purchase; 6) receipt of all necessary
      government approvals; and 7) exclusivity to MKU for the period to closing.
      As
      such, the Company has agreed to a non-refundable break-up fee equal to the
      greater of any advances under the secured convertible promissory note operating
      facility described above or $500,000, at the time of any breach. Upon
      termination, the promissory note would immediately become due and
      payable.




C.
            RESEARCH
                AND DEVELOPMENT, PATENTS AND LICENSES,
                ETC.





See
      "Research and Development" in Section 4.





D.
            TREND
                INFORMATION.





Independent
      researchers forecast that fuel cells will prove to be a transformational
      technology, once remaining cost, technical and public acceptance hurdles are
      overcome.





The
      fuel
      cell industry is evolving gradually, with the pace of demand determined by
      a
      number of factors including:





·
            Capital
                available to fund further development of
                technology





·
            The
                level of government commitment to develop a clean energy economy,
                which
                currently is greater in Europe, Japan and Canada than in the
                U.S.





·
            The
                price, availability and long-term security of conventional power
                sources,
                which affect the demand for fuel cells as an alternative energy
                source




31
 *Table
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There
      are
      a number of factors contributing to growing demand for fuel cells,
      including:





·
            Increasing
                demand for reliable power accentuated by power blackouts of recent
                years





·
            Deregulation
                of power markets and introduction of
                competition





·
            Environmental/political
                concerns





·
            Developing
                regions without power grids





·
            Geographic
                considerations/remote power





·
            Distributed
                power generation





·
            Increasing
                price of oil;





E.
            OFF
                BALANCE SHEET ARRANGEMENTS





None





F.
            CONTRACTUAL
                OBLIGATIONS





There
      are
      no contractual obligations to be disclosed.





ITEM
              6.
            DIRECTORS,
                SENIOR MANAGEMENT AND EMPLOYEES.





A.
            DIRECTORS
                AND SENIOR MANAGEMENT.





The
      following table sets forth the name, age and office held with the Company as
      of
      June 11, 2008 and the period during which such person has served as a Director,
      Executive Officer and/or senior management.


Name
              Age
              Office
                  Held
              Director
                  SinceMichael
                  Liik (1)
              49
              President,
                  Chief Executive Officer and Director
              2004Brian
                  Clewes
              49
              Chief
                  Financial Officer, Secretary, Treasurer and Director
              2004Arthur
                  Laudenslager (2)
              81
              Director
              2003Christopher
                  Besant
              49
              Director
              2007Richard
                  Callander (1)
              49
              Director
              2007Howard
                  Drabinsky (2)
              52
              Director
              2007




Notes




32
 *Table
          of Contents*




(1)
                Members
                    of the Company's Audit
                    Committee.


(2)
                Members
                    of the Company’s Compensation
                    Committee.




Michael
      Liik, P. Eng, MBA is currently President of Liikfam Holdings Inc., an
      investment/venture capital company. He has a record of investing in and leading
      both early-stage and high-growth Canadian public companies including Cymat
      Corp.
      and Slater Steel. Mr. Liik is both a Professional Engineer and an MBA




Brian
      D.
      Clewes is a twenty-five year veteran of the insurance industry, he is currently
      a principal in Benefit Management Advisors Inc., the largest supplier of
      benefits consulting services to Ontario Chartered Accounting firms. Mr. Clewes
      is an outstanding entrepreneur with solid connections in the angel financing
      community. Mr. Clewes is a Chartered Life Underwriter, a Certified Financial
      Planner, and a Chartered Financial Consultant.




Arthur
      E.
      Laudenslager was formerly a senior officer and director of several public and
      private corporations, is currently Vice President, First Energy Advisors Inc.,
      and a business consultant who brings to the Carthew Bay Board a great deal
      of
      experience and knowledge in corporate structure and financing




Christopher
      Besant is a founding partner of the Business Reorganization Group of Cassels
      Brock & Blackwell LLP, a Toronto business law firm. Mr. Besant has been
      extensively involved in a range of major domestic and cross-border proceedings
      affecting industries which span the Canadian economy.




Richard
      Callander is responsible for equity management, research and client servicing.
      Mr. Callander has managed large and small cap equities for over 20 years and
      has
      extensive experience marketing to institutions and high net worth individuals.
      He was previously a partner with one of Canada's largest investment counseling
      firms




Howard
      M.
      Drabinsky is the Managing Partner of Lang Michener LLP, a Toronto business
      law
      firm, former Chairman of the firm's Business Law Group, and a partner since
      1987. As a recognized leader in the corporate community, he also has and
      continues to serve as an officer and director of public and private companies.
      Mr. Drabinsky's particular expertise is in mergers and acquisitions and
      corporate finance. He works with publicly and privately owned clients in a
      wide
      range of industries, including information technology, manufacturing,
      entertainment, consumer products and financial services.





There
      are
      no family relationships between any of the persons above, nor are there any
      arrangements or understandings with major shareholders, customers, suppliers
      or
      others, pursuant to which any person referred to above was selected as a
      Director or member of senior management.




B.
                COMPENSATION




33
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Under
                the current financial circumstances, executives and directors or
                their
                affiliate companies often elect to take all or part of their compensation
                in the form of restricted common stock. An individual or entity that
                receives common stock of the Company in lieu of cash is still responsible
                to pay tax on the income earned in the current fiscal year even though
                the
                shares issued are restricted from trading for a minimum of one year
                or
                longer. In Canada, the personal income tax rate is higher in most
                cases
                than the corporate tax rate. This benefit does not limit the Company’s
                ability to deduct the compensation in any way.




(1)
                Paid
                    in Cash





2007
            
            2006
            
            2005Macnor
                Corp (1)
            
            
            —
            
            
            135,997
            
            
            66,665Juri
                Nor
            
            
            4,000
            
            
            —
            
            
            —Fortius
                Research & Trading (2)
            
            
            —
            
            
            55,225
            
            
            15,000Anthony
                Durkacz
            
            
            4,000
            
            
            —
            
            
            —Liikfam
                Holdings Inc. (3)
            
            
            25,000
            
            
            —
            
            
            —Michael
                Liik
            
            
            54,000
            
            
            —
            
            
            —397230
                Ontario Limited (4)
            
            
            40,000
            
            
            —
            
            
            —Brian
                Clewes
            
            
            4,000
            
            
            —
            
            
            —Arthur
                Laudenslager
            
            
            29,000
            
            
            —
            
            
            —Sterling
                Partners (5)
            
            
            25,000
            
            
            —
            
            
            —Rick
                Callander
            
            
            1,000
            
            
            —
            
            
            —Howard
                Drabinsky
            
            
            1,000
            
            
            —
            
            
            —Lang
                Michener
            
            
            25,000
            
            
            —
            
            
            —Chris
                Besant
            
            
            1,000
            
            
            —
            
            
            —Total
            
            
            213,000
            
            
            191,222
            
            
            81,665





(1)
            Macnor
                Corp is an Ontario Corporation owned and controlled by Jiri Nor,
                the CEO
                and Director of Astris. Macnor also provided research and development
                services by Jiri Nor and marketing services by his son Peter Nor,
                who was
                an Officer of Carthew Bay Technologies (Formerly Astris).





(2)
            Fortius
                Research & Trading Corporation is an Ontario Corporation owned and
                controlled by Anthony Durkacz, who was an Officer and Director of
                Carthew
                Bay Technologies (Formerly Astris).





(3)
            Liikfam
                Holdings Inc. is an Ontario Corporation owned and controlled by Michael
                Liik, the CEO and Director of Carthew Bay Technologies.





(4)
            397230
                Ontario Limited is an Ontario Corporation owned and controlled by
                Brian
                Clewes, an Officer and Director of Carthew Bay
                Technologies.




(5)
            Sterling Partners is an Ontario
                Corporation owned and controlled by Rick Callander, a Director of
                Carthew
                Bay Technologies.




34
 *Table
          of Contents*




2)
            Paid
                in Shares





In
      2004,
      we issued to related parties 586,592 common shares for a value of $332,360
      for
      consulting services rendered and 293,751 shares for $128,000 to pay down debt
      and accrued interest on that debt for a total of 880,343 shares for a total
      of
      $473,060. These shares and amounts were issued to the following entities or
      individuals:





Individual or Entity
            
            # of Shares
            
            $ ValueJiri
                Nor as an individual
            
            
            117,500
            
            
            51,200Macnor
                Corp. (Note 1)
            
            
            266,263
            
            
            144,455Fortius
                Research & Trading (Note 2)
            
            
            95,880
            
            
            52,500Director
                – David Ramm
            
            
            57,445
            
            
            34,422Director
                – Gordon Emerson
            
            
            118,032
            
            
            81,443Director
                – Gerald Crawford
            
            
            89,793
            
            
            46,435Director
                – Donald Blenkarn
            
            
            117,500
            
            
            51,200Director
                – Arthur Laudenslager
            
            
            17,930
            
            
            11,405Total
            
            
            880,343
            
            
            473,060





Note
      1.
      Macnor Corp is an Ontario Corporation owned and controlled by Jiri Nor, the
      former CEO and former Director of the Company. Macnor also provided research
      and
      development services by Jiri Nor and marketing services by his son Peter Nor,
      who was an Officer of Carthew Bay Technologies (Formerly Astris).





Note
      2.
      Fortius Research & Trading Corporation is an Ontario Corporation owned and
      controlled by Anthony Durkacz, a former Officer and Director of Carthew Bay
      Technologies (Formerly Astris).





In
      2005,
      Carthew Bay Technologies (Formerly Astris) issued to related parties, 5,000,000
      shares for the purchase of 2062540 Ontario Inc. for a value of $1,955,000;
      1,160,803 shares for professional services for a value of $284,666; 125,000
      shares to repay a liability worth $26,150; 719,873 shares for consulting
      services for a value of $168,437; and 3,415 shares for expense recovery for
      a
      value of $1,205. These shares and amounts were issued to the following entities
      or individuals:





Individual
                or Entity
            
            # of Shares
            
            $ ValueMacnor
                Corp (Note 1)
            
            
            6,285,803
            
            
            2,265,816Fortius
                   Research and Trading(Note 2)
            
            
            327,269
            
            
            72,500Liikfam
                Holdings(Note 3)
            
            
            392,604
            
            
            95,937Director
                - A. Laudenslager
            
            
            3,415
            
            
            1,205Total
            
            
            7,009,091
            
            
            2,435,458





Note
      1.
      Macnor Corp is an Ontario Corporation owned and controlled by Jiri Nor, the
      former CEO and former Director of the Company. Macnor also provides research
      and
      development services by Jiri Nor and marketing services by his son Peter Nor,
      who is an Officer of Carthew Bay Technologies (Formerly Astris).




35
 *Table
          of Contents*




Note
      2.
      Fortius Research & Trading Corporation is an Ontario Corporation owned and
      controlled by Anthony Durkacz, a former Officer and Director of Carthew Bay
      Technologies (Formerly Astris).





Note
      3.
      Liikfam Holdings is an Ontario Corporation owned and controlled by Michael
      Liik,
      the CEO and Director of Carthew Bay Technologies.





In
      2006,
      Carthew Bay Technologies (Formerly Astris) issued to related parties, 2,616,313
      shares for professional services for a value of $374,533. These shares and
      amounts were issued to the following entities or individuals:





Individual or Entity
            
            # of Shares
            
            $ ValueMacnor
                Corp (Note 1)
            
            
            792,899
            
            
            112,000Fortius
                Research and Trading(Note 2)
            
            
            178,291
            
            
            37,500Liikfam
                Holdings(Note 3)
            
            
            808,968
            
            
            100,000Director
                - A. Laudenslager
            
            
            160,106
            
            
            24,359Director
                – Brian Clewes
            
            
            191,476
            
            
            29,465Director
                – David Ramm
            
            
            78,952
            
            
            12,000Director
                – Gary Brandt
            
            
            88,476
            
            
            12,698Director
                – Anthony Durkacz
            
            
            96,476
            
            
            14,000Director
                – Juri Nor
            
            
            96,476
            
            
            14,000Total
            
            
            2,616,310
            
            
            374,534





Note
      1.
      Macnor Corp is an Ontario Corporation owned and controlled by Jiri Nor, the
      CEO
      and Director of the Company. Macnor also provides research and development
      services by Jiri Nor and marketing services by his son Peter Nor, who is an
      Officer of Carthew Bay Technologies (Formerly Astris).





Note
      2.
      Fortius Research & Trading Corporation is an Ontario Corporation owned and
      controlled by Anthony Durkacz, an Officer and Director of Carthew Bay
      Technologies (Formerly Astris).





Note
      3.
      Liikfam Holdings is an Ontario Corporation owned and controlled by Michael
      Liik,
      the CEO and Director of Carthew Bay Technologies.





In
      2007,
      we issued to related parties, 1,838,732 shares for professional services for
      a
      value of $374,533. These shares and amounts were issued to the following
      entities or individuals:





Individual or Entity
            
            # of Shares
            
            $ ValueLiikfam
                Holdings(Note 3)
            
            
            505,982
            
            
            41,667Director
                - A. Laudenslager
            
            
            389,845
            
            
            32,103Director
                – Brian Clewes
            
            
            420,021
            
            
            34,586Director
                – Michael Liik
            
            
            400,021
            
            
            32,941Director
                – Anthony Durkacz
            
            
            61,432
            
            
            5,059Director
                – Jiri Nor
            
            
            61,431
            
            
            5,059Total
            
            
            1,838,732
            
            
            151,415




Directors




36
 *Table
          of Contents*




(2)
            Currently,
                the compensation arrangement for the Directors is as follows:





An
      annual
      fee of $25,000 plus an option grant of 508,697 Shares excerciseable at US$0.027
      which vest upon the successful completion of an RTO transaction.





The
      Company does not have any pension plan, retirement or similar plan for its
      Executive Officers or Directors





(3)
            Governance





An
      executive compensation committee was appointed in January 2005 to study and
      determine appropriate levels of compensation and to structure employment
      agreements for officers.





(4)
            Stock
                Option Plan





The
      Company has stock option plans for its employees, Directors, Officers, and
      consultants who are regarded as integral to the benefit and progress of the
      Company and its operations.  Options are normally issued as a bonus of
      employment or are tied into performance related compensation.  Performance
      related compensation includes completion of research and development projects
      within specific timeframes and budget, achieving financial targets on behalf
      of
      the Company or introduction/referral/ completion of business agreements or
      arrangements. In general, the minimum vesting requirement of options issued
      is
      one year. The maximum term of options is five years from the grant date.
 Normally the exercise price of the option is determined using the five-day
      closing average of the shares prior to the grant date.





On
      October 22, 2004, the Board of Directors passed a resolution authorizing an
      amendment to a stock option plan dated September 25, 2001 and amended October
      30, 2002 increasing the number of shares available in the plan by 2,600,000
      shares, to a total of 5,100,000 shares.  The amendment was adopted by the
      Company’s shareholders at its annual and special meeting of shareholders held on
      October 22, 2004.  On Oct 12, 2005, the Board of Directors received
      approval from shareholders at the Annual General Meeting to increase the common
      shares available for the Company’s Stock Option Plan by 2,000,000. All features
      of the plan remain unchanged.





(5)
            Options
                and Warrants outstanding as at June 11,
                2008





The
      following table outlines the options that are outstanding as of June 11, 2008
      of
      the directors and senior management or their affiliates of the
      Company:





Name
            
            Number of Shares
            
            Exercise Price
            
            ExpiryMichael
                Liik (1)
            
            
            3,0542,182
            
            
            US$0.027
            
            09/06/2012Michael
                Liik (2)
            
            
            500,000
            
            
            US$0.36
            
            12/11/2009Brian
                Clewes (1)
            
            
            2,034,788
            
            
            US$0.027
            
            09/06/2012Brian
                Clewes (3)
            
            
            254,348
            
            
            US$0.022
            
            11/23/2012




Arthur
                Laudenslager (1)
            
            
            508,697
            
            
            US$0.027
            
            09/06/2012Christopher
                Besant (1)
            
            
            508,697
            
            
            US$0.027
            
            09/06/2012Richard
                Callander (1)
            
            
            508,697
            
            
            US$0.027
            
            09/06/2012Howard
                Drabinsky (1)
            
            
            508,697
            
            
            US$0.027
            
            09/06/2012




37
 *Table
          of Contents*




Options
      to Directors and Officers will become vested as follows:





1.
            Upon
                the successful completion of a suitable
                company.





2.
            Warrants
                to Liikfam Holdings Inc. of 500,000 at $U.S. 0.37 will become vested
                as
                follows:





(i)
            200,000
                upon raising a minimum of $U.S. 1 million in
                equity


(ii)
            300,000
                upon raising additional minimum of $US 5 million in
                equity





3.
            Finders’
                Fee Options for introducing the Company to Colorep, Inc. that vests
                upon
                the successful completion of the Colorep Reverse Takeover
                Transaction.




C.
            BOARD
                PRACTICES.





The
      Board
      of Directors may consist of from three to ten members, and currently consists
      of
      six members. Each Director is elected by the shareholders to serve until the
      next annual meeting or until a successor is elected or appointed





For
      a
      list of the Directors and the period during which the current Directors have
      served in that office, please see Section 6A above.





The
      Directors of the Company do not currently have any service contracts with the
      Company providing for benefits upon termination of employment. There does not
      currently exist any compensation arrangement for any of the Directors. The
      Company does not have any pension, retirement or similar plan for its
      Directors.





Michael
      Liik and Richard Callander are members of the Company’s Audit Committee. Arthur
      Laudenslager and Howard Drabinsky are members of the Company’s Compensation
      Committee. There are no additional committees of the Board





D.
            EMPLOYEES.





The
      Company currently has no employees.




E.
              SHARE
                  OWNERSHIP.
 
 The
        following table lists, as of June 11, 2008, the beneficial share holdings
        (see
        (4)) in the Common Shares, which are the only outstanding





38
 *Table
          of Contents*




voting
      securities of the Company, of (i) each of the
      Company's Executive Officers and Directors of the Company; and (ii) all of
      the
      Company's Executive Officers and Directors as a group:


Name
              Options,
                Warrants
                  or
                Agreements
                Vested
              Directly
                Owned
              Total
                  Owned
                included
                Vested
                  Amounts
              Percent
                of
                ClassBrian
                  Clewes
              
              711,887
              711,887
              1.38%Arthur
                  Laudenslager (1)
              
              655,796
              655,796
              1.28%Michael
                  Liik (2)
              500,000
              2,266,814
              2,266,814
              4.19%All
                  Executive Officers and Directors as a group
              500,000
              3,634,497
              4,134,497
              7.07%







*
            Denotes
                less than 1%





(1)
            Includes
                (i) 655,796 Common Shares held by Arthur Laudenslager





(2)
            Includes
                (i) 524,211 Common shares held by Michael Liik and (ii)1,742,603
                Common
                shares by Liikfam Holdings Inc.





All
      the
      individuals included in the table above are beneficial owners as defined in
      General Instruction F to this form 20-F. Each person in the above table either
      owns or has the right to acquire the common shares within 60 days by options,
      warrants or other agreement.





ITEM
              7.
            MAJOR
                SHAREHOLDERS AND RELATED AND NON-RELATED PARTY
                TRANSACTIONS.





A.
            MAJOR
                SHAREHOLDERS.





The
      following table lists, as of June 11, 2008, the beneficial share holdings in
      the
      Common Shares, which are the only outstanding voting securities of the Company,
      of all persons who are known to the Company to beneficially own, directly or
      indirectly, five percent or more of the issued and outstanding Common
      Shares:





Name ofBeneficial
                Owner
            
            Amount and Nature
              of Class
            
            PercentJiri
                K. Nor (1)
            
            9,603,493
            
            18.68%





(1)
            Includes
                (i) 2,224,386 Common Shares held by Jiri K. Nor and (ii) 7,379,107
                Common
                Shares held by Macnor Corp.





There
      has
      been significant change in the percentage ownership held by both major
      shareholders during the past four years due to dilution incurred




39
 *Table
          of Contents*




by
      private placements, the issuance of Common Shares
      to reduce debt and the issuance of common shares for the acquisition of Astris
      s.r.o.




The
      Company's major shareholder does not have any different voting rights than
      other
      holders of the Common Shares.




For
      a
      discussion of the number of shares of Common Stock held in Canada, please see
      Item 9 below.





To
      the
      Company's knowledge, it is not directly or indirectly owned or controlled by
      another corporation(s), by any foreign government or by any other natural or
      legal person(s). The Company does not know of any arrangement that may, at
      a
      subsequent date, result in a change in control of the Company.




B.
            RELATED
                PARTY TRANSACTIONS.




(1)
            Astris
                s.r.o.





The
      Company acquired 100% of the ownership (increased from 30% ownership) in Astris
      s.r.o., a Czech Republic company on January 27, 2005. The results of its
      operations from the effective date of January 2, 2005 are fully consolidated
      with the results of the parent company. In prior years, this investment in
      Astris s.r.o. was accounted for on the equity basis. As the Company’s share of
      losses was in excess of the original investment, the investment was written
      down
      to nil in a prior year.





The
      Company regularly subcontracts portions of its research and development
      activities to s.r.o. To facilitate these activities, the Company advances funds
      to them. In addition, the Company sells its products to s.r.o., as required.
      As
      at December 31, 2005, any funds advanced to Astris s.r.o. since acquisition
      and
      any trade receivables and payables have been eliminated on
      consolidation





The
      funds
      advanced to s.r.o. were for operating expenses, the purchase of land and a
      building as well as equipment for the new electrode production
      facility.




(2)
            Amounts
                owing to Directors and Officers:




Payables
      and accruals as at December 31, 2007 include the following
      amounts:


Position
                            in
                        Amount
                        Amount
                        AmountEntity
                        Company
                        2007
                        2006
                        2005Anthony
                            Durkacz
                        Director
                            & Officer
                        $—
                        $2,141
                        $        34,596Arthur
                            Laudenslager
                        Director
                        —
                        2,397
                        20,358Brian
                            Clewes
                        Director
                        25,000
                        2,000
                        25,465Chris
                            Besant
                        Director
                        25,000
                        —
                        —David
                            Ramm
                        Director
                        —
                        —
                        10,000Fortius
                            Research andTrading
                        Controlled
                            by A.D.
                        
                        5,300
                        31,125Gary
                            Brandt
                        Director
                        
                        —
                        8,698Jiri
                            Nor
                        Director
                            & Officer
                        
                        3,011
                        61,915Liikfam
                            Holdings Inc.
                        Controlled
                            by M.L.
                        
                        26,500
                        26,750Macnor
                            Corp.
                        Controlled
                            by J.N.
                        
                        21,333
                        102,720Michael
                            Liik
                        Director
                        
                        2,000
                        14,512Peter
                            Nor
                        Officer
                        
                        1,971
                        6,971$ 50,000
                        $      66,653
                        $      343,110


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(3)
            Compensation
                Expensed to Directors and Officers





The
      following amounts were expensed as consulting and other compensation to
      directors and officers:





Position
                in
            
            Amount
            
            Amount
            
            AmountEntity
            
            Company
            
            2007
            
            2006
            
            2005Gary
                Brandt
            
            Director
            
            $
            —
            
            $
            4,000
            
            $
            8,698Brian
                Clewes (BC)
            
            Director
            
            
            49,005
            
            
            6,000
            
            
            25,465Anthony
                Durkacz(AD)
            
            Director
              & Officer
            
            
            9,059
            
            
            6,000
            
            
            10,000Fortius
                  Research andTrading
            
            DirectorControlled
                by A.D.
            
            
            48,733
            
            
            92,725
            
            
            112,500Arthur
                Laudenslager
            
            Director
            
            
            46,122
            
            
            6,100
            
            
            19,768397230
                Ontario Limited
            
            Controlled
              by B.C.
            
            
            40,000
            
            
            —
            
            
            —Howard
                Drabinsky (HD)
            
            Director
            
            
            1,000
            
            
            —
            
            
            —Lang
                Michener
            
            For
              HD
            
            
            10,417
            
            
            —
            
            
            —Rick
                Callander (RC)
            
            Director
            
            
            1,000
            
            
            —
            
            
            —Chris
                Besant
            
            Director
            
            
            11,417
            
            
            —
            
            
            —Stirling
                Partners
            
            Controlled
              by R.C.
            
            
            10,417
            
            
            —
            
            
            —Liikfam
                Holdings Inc.
            
            Controlled
              by M.L.
            
            
            118,750
            
            
            100,000
            
            
            118,750Macnor
                Corp. re Jiri Nor
            
            Controlled
              by J.N.
            
            
            93,330
            
            
            149,997
            
            
            315,998Macnor
                Corp re Peter Nor
            
            Controlled
              by J.N.
            
            
            56,000
            
            
            98,000
            
            
            120,000Michael
                Liik (ML)
            
            Director
            
            
            36,941
            
            
            6,000
            
            
            14,511Jiri
                Nor
            
            Director
              & Officer
            
            
            9,059
            
            
            6,000
            
            
            10,000David
                Ramm
            
            Director
            
            
            —
            
            
            2000
            
            
            10,000$
            541,250
            
            $
            476,822
            
            $
            765,690




C.
            NON-RELATED
                PARTY COMMON STOCK TRANSACTIONS.




During
      the four quarters of 2004, the company issued shares of common stock to settle
      obligations owing by the Company to certain individuals and companies as
      follows:


First
                Quarter
              
              Second
                Quarter
              
              Third
                Quarter
              
              Fourth
                Quarter
              
              AnnualTotal
                  Non-Related Parties
              
              306,040
              136,092
              
              565,535
              721,205
              
              1,728,872




During
      the four quarters of 2005, the company issued shares of common stock to settle
      obligations owing by the Company to certain individuals and companies as
      follows:




41
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First
              Quarter
            
            Second
              Quarter
            
            Third
              Quarter
            
            Fourth
              Quarter
            
            AnnualTotal
                Non-Related Parties
            
            261,350
            
            1,113,757
            
            2,373,045
            
            557,775
            
            4,305,927




During
      the four quarters of 2006, the company issued shares of common stock to settle
      obligations owing by the Company to certain individuals and companies as
      follows:





First
              Quarter
            
            Second
              Quarter
            
            Third
              Quarter
            
            Fourth
              Quarter
            
            AnnualTotal
                Non-Related Parties
            
            954,039
            
            1,565,637
            
            296,772
            
            105,667
            
            2,925,115




There
      were no shares issued to Non-Related Parties during the year ended December
      31,
      2007. In January 2008, 625,000 were issued to Ardour Capital Investments, LLC
      due at the conclusion of their financial consulting agreement at October 26,
      2007.




D.
            INTERESTS
                OF EXPERTS AND COUNSEL.





Not
      Applicable.





ITEM
              8.
            FINANCIAL
                INFORMATION.





CONSOLIDATED
      STATEMENTS AND OTHER FINANCIAL INFORMATION.





Reference
      is made to Item 17 for a list of all financial statements and notes related
      thereto filed as part of this Annual Report.





EXPORT
      SALE DISCLOSURE





In
      2006,
      the Company had export sales in the amount of $68,695. In 2005, the Company
      had
      export sales in the amount of $238,493. In 2004, the Company had export sales
      in
      the amount of $81,290





SIGNIFICANT
      CHANGES.




On
      June
      5, 2007, the company executed a binding asset purchase agreement with MKU Canada
      Inc., a corporation incorporated under the laws of Ontario, Canada, a
      wholly-owned subsidiary of Green Shelters Innovations Ltd., a wholly-owned
      subsidiary of Green Shelters (India) Private Ltd, to sell substantially all
      of
      its assets to MKU
      Canada Inc.




This
      transaction, which was negotiated by the Special Committee of the Board of
      Directors of Astris, includes the sale of substantially all of the assets of
      the
      Company, including its fuel cell and test load technology assets for
      consideration of: (i) approximately US$3.1 Million in cash; (ii) forgiveness
      of
      US$1.6 Million of face value secured convertible debentures held by ACME Global
      Inc. (a subsidiary of GSI) and accrued interest of US$175,000; (iii) an option
      for Astris to redeem , for
      nominal consideration and then cancel 4,248,750 shares recently acquired by
      ACME
      Global Inc. for US$0.08 per share ;
      and
      (iv) a secured convertible promissory note funding




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commitment
      of a minimum of US$150,000 per month to
      finance operations to closing and to be forgivable thereafter.




Immediately
      after closing, existing management resigned
      both as officers and directors of the Company. It is the intention of the Board
      of the Company to appoint a new CEO with a mandate to utilize the remaining
      cash
      and residual tax losses to seek new
      business opportunit ies.




The
      obligation of the parties to consummate this transaction are subject to the
      following primary conditions: 1) no material adverse change to Carthew Bay’s
      business; 2) execution of employment agreements between GSI and key personnel
      of
      Astris; 3) completion prior to July 31, 2007; 4) approval by at least two thirds
      of the votes cast at a Special Meeting of Astris shareholders on July 10, 2007;
      5) closing terms typical of an asset purchase; 6) receipt of all necessary
      government approvals; and 7) exclusivity to MKU for the period to closing.
      As
      such, the Company has agreed to a non-refundable break-up fee equal to the
      greater of any advances under the secured convertible promissory note operating
      facility described above or $500,000, at the time of any breach. Upon
      termination, the promissory note would immediately become
      due and payable.




DIVIDEND
      POLICY.





The
      Company has not paid dividends within the last five fiscal years. For a
      description of the ability of the Board of Directors to distribute dividends,
      please see Item 10B below.





ITEM
              9.
            THE
                OFFER AND LISTING.





MARKETS
      AND PRICE HISTORY OF THE COMPANY'S STOCK.





As
      of
      June 11, 2008, the Company had 265 stockholders of record for its Common Shares
      and 51,414,682 Common Shares were issued and outstanding. The Company believes
      that there are a considerable number of beneficial holders of the Common Shares,
      as a substantial number of Common Shares are held of record by principal
      depositories in Canada and the United States. As at June 11, 2008, the
      shareholder list showed 265 registered shareholders holding a total of
      51,414,682 Common Shares, 14,250,921 Common Shares in the name of Cede & Co
      and 24,092,147 Common shares in the name of CDS & Co (the depository in
      Canada).





The
      Common Shares were previously traded in Canada on the Canadian Dealing Network
      (CDNX), but presently has an inactive listing on the CDNX. Since June 20, 2001,
      the Company's Common Shares have been posted for trading on the O.T.C. Bulletin
      Board under the symbol ASRNF. The quarterly high and low prices for the past
      two
      fiscal years are tabulated below:


2006
              High
              LowFirst
              .18
              .11Second
              .29
              .14Third
              .16
              .06Fourth
              .09
              .042007
              High
              LowFirst
              .040
              .031Second
              .038
              .026Third
              .035
              .0175Fourth
              .0375
              .02








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The
      following table sets forth the high and low market prices for each of the past
      5
      months:


2008
              High,
                US$ 
                  /  share
              Low,
                US$ 
                  /  shareJanuary
              .035
              .0275February
              .035
              .020March
              .030
              .020April
              .030
              .020May
              .050
              .030








ITEM
              10.
            ADDITIONAL
                INFORMATION.





A.
            SHARE
                CAPITAL.





Not
      Applicable.





ITEM
              10B.
            MEMORANDUM
                AND ARTICLES OF ASSOCIATION.




1.
            ORGANIZATION.





The
      Company was incorporated in the Province of Ontario, Canada as required under
      the Business Corporations Act (Ontario). The registrant’s memorandum and
      articles do not provide for any specific objects or purposes.





2.
            DIRECTORS
                POWERS.





A
      director who is a party to, or who is a director or officer of or has a material
      interest in a proposal, arrangement or contract cannot vote on any resolution
      to
      approve the potential conflict of interest. A director may not vote, in the
      absence of an independent quorum, on compensation to themselves or any members
      of their body.





No
      person
      shall be qualified for election as a director if such person is less than 18
      years of age, is of unsound mind and has been so found by a court in Canada
      or
      elsewhere, is not an individual, or has the status of a bankrupt. Directors
      are
      not required to retire upon reaching a specific age. A director need not be
      a
      shareholder. A majority of the directors shall be resident Canadians.




CORPORATE
      GOVERNANCE.




The
      Company's by-laws provide that, subject to any
      unanimous shareholder agreement, the Board of Directors shall manage or
      supervise the management of




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the
      business and affairs of the Corporation. The powers of the board may be
      exercised at a meeting at which a quorum is present or by resolution in writing
      signed by all the Directors entitled to vote on that resolution at a meeting
      of
      the Board. Where there is a vacancy in the board, the remaining Directors may
      exercise all the powers of the Board, so long as a quorum remains in
      office.




MEETINGS
      OF THE BOARD OF DIRECTORS.





The
      Company's by-laws provide that meetings of the Board of Directors may be held
      at
      any place within or outside Ontario and in any financial year of the Corporation
      a majority of the meetings need not be held in Canada. Meetings of the board
      shall be held from time to time at such time and at such place as the Board
      of
      Directors, the Chair of the Board, the Managing Director, the President or
      any
      two Directors may determine.





BORROWING
      POWER.





The
      Company's by-laws provide that without limiting the borrowing powers of the
      Corporation, as set forth in the Business Corporation Act (Ontario) (the "Act"),
      but subject to the articles and any unanimous shareholder agreement, the Board
      of Directors may from time to time on behalf of the Corporation, without
      authorization of the shareholders:





borrow
      money upon the credit of the Corporation;





issue,
      reissue, sell or pledge bonds, debentures, notes or other evidences of
      indebtedness or guarantee of the Corporation, whether secured or unsecured;





to
      the
      extent permitted by the Act, give directly or indirectly financial assistance
      to
      any person by means of a loan, a guarantee or otherwise on behalf of the
      Corporation to secure performance of any present or future indebtedness,
      liability or obligation of any person;





and





mortgage,
      hypothecate, pledge or otherwise create a security interest in all or any
      currently owned or subsequently acquired real or personal, movable or immovable,
      property of the Corporation including book debts, rights, powers, franchises
      and
      undertakings, to secure any such bonds, debentures, notes or other evidences
      of
      indebtedness or guarantee or any other present or future indebtedness, liability
      or obligation of the Corporation.





Nothing
      limits or restricts the borrowing of money by the Corporation on bills of
      exchange or promissory notes made, drawn, accepted or endorsed by or on behalf
      of the Corporation.





Unless
      the articles of the Corporation otherwise provide, the board
      may
      from time to time delegate to a director, a committee of the board, or an
      officer of
      the
      Corporation any or all of the powers conferred on the board




45
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to
      such extent and in such manner as the board may
      determine at the time of such delegation.




3.
            RIGHTS,
                PREFERENCES AND RESTRICTIONS OF PREFERRED AND COMMON
                SHARES




The
      holders of the common shares are entitled to receive notice of and to attend
      and
      vote at all meetings of shareholders of the company and to one vote in respect
      of each common share held at all such meetings, except meetings at which only
      holders of a specified class of shares (other than the common shares) are
      entitled to vote. Holders of common shares are entitled to receive, subject
      to
      the rights of holders of other classes of shares, dividends as and when declared
      by the company. Holders of common shares are entitled to receive, subject to
      the
      rights of holders of other classes of shares, the remaining property of the
      company on the liquidation, dissolution or winding up of the company, whether
      voluntary or involuntary, or any other distribution of the assets of the company
      among its shareholders for the purpose of winding up its affairs.




The
      holders of the preferred shares shall have preferred rights as to dividends
      as
      determined by the directors of the company. The preferred shares may be issued
      in one or more series, each series to consist of such number of shares as may
      before the issue thereof be determined by the directors who may by resolution
      fix before the issue thereof the designation, preference, rights, privileges,
      restrictions, conditions and limitations attached to the preferred shares of
      each series including the rate and nature of preferential dividends, the date
      of
      payment thereof, the redemption price and conditions of redemption, if any,
      conversion rights and conditions of conversion, if any, and voting rights,
      if
      any.





DIVIDENDS




The
      Company's by-laws provide that, subject to the Act, the articles and any
      unanimous shareholder agreement, the Board of Directors may from time to time
      declare dividends payable to the shareholders according to their respective
      rights and interests in the Corporation. Dividends may be paid in money or
      property or by issuing fully paid shares of the Corporation or options or rights
      to acquire fully paid shares of the Corporation. Any dividend unclaimed after
      a
      period of six years from the date on which the same has been declared to be
      payable shall be forfeited and shall revert to the Corporation.





4.
            CHANGING
                RIGHTS OF SHAREHOLDERS




The
      rights of shareholders may not be modified other than by a majority vote of
      the
      common shares voting on such modification at a special meeting. The rights
      of
      shareholders may also be modified by a unanimous shareholder agreement.




5.
            ANNUAL
                GENERAL MEETINGS AND SPECIAL MEETINGS




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The
      annual meeting of shareholders shall be held at such time in each year and
      at
      such place anywhere in the world as the board, chair of the board, the managing
      director or the president may from time to time determine. The board, chair
      of
      the board, the managing director or the president shall have the power to call
      a
      special meeting of shareholders at anytime. Notice of the time and place of
      each
      meeting of shareholders will be given no less than 21 and no more than 50 days
      before the date of the meeting to each director, to the auditor, and to each
      shareholder who at the close
      of
      business on the record date for notice is entered in the securities register
      as
      the holder of one or more shares carrying the right to vote.





6.
            LIMITATIONS
                TO OWN SECURITIES




There
      are
      no limitations on the rights to own securities, to hold securities or exercise
      voting rights on securities imposed by foreign law.





7.
            ISSUES
                RELATED TO MERGERS, ACQUISITIONS OR CORPORATE
                RESTRUCTURING




Currently
      there are no provisions in the company’s articles or by-laws that would have an
      effect of delaying, deferring or preventing any of item 7 above.





8.
            OWNERSHIP
                THRESHOLD




There
      are
      no by-law provisions governing the ownership threshold above which shareholder
      ownership must be disclosed. However, in the United States, 5% ownership or
      more
      must be publicly disclosed. In Canada, 10% ownership or more must be publicly
      disclosed.




9 & 10.
              LAW




The
      laws
      of Ontario, Canada, relating to Items 2-8 are not significantly different from
      the laws of the United States. The conditions imposed by the memorandum and
      articles of association governing changes in capital are not more stringent
      than
      is required by law.





C.
            MATERIAL
                CONTRACTS




The
      Company entered into a value added reseller agreement with Alternate Energy
      Inc.
      and a co-operation agreement with El.Ma, as previously mentioned under Item
      5C
“Prospects”.




On
      June
      5, 2007, the company executed a binding asset purchase agreement with MKU Canada
      Inc., a corporation incorporated under the laws of Ontario, Canada, a
      wholly-owned subsidiary of Green Shelters Innovations Ltd. (“GSI”), a
      wholly-owned subsidiary of Green Shelters (India) Private Ltd, to sell
      substantially all of its assets to MKU Canada Inc.




This
      transaction, which was negotiated by the Special Committee of the Board of
      Directors of Astris, includes the sale of substantially all of the assets of
      the
      Company, including its fuel cell and test load technology assets for
      consideration of: (i) approximately US$3.1 Million in cash; (ii) forgiveness
      of
      US$1.6 Million of face value secured convertible debentures held by ACME Global
      Inc. (a subsidiary of GSI) and accrued interest of




47
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US$175,000;
      (iii) an option for Astris to redeem,for
      nominal consideration and then cancel 4,248,750 shares recently acquired by
      ACME
      Global Inc. for US$0.08 per share; and (iv) a secured convertible promissory
      note funding commitment of a minimum of US$150,000 per month to finance
      operations to closing and to be forgivable
      thereafter.


Immediately
      after closing, existing management will resign both as officers and directors
      of
      the Company. It is the intention of the Board of the Company to appoint a new
      CEO with a mandate to utilize the remaining cash and residual tax losses to
      seek
      new business opportunities.




The
      obligation of the parties to consummate this transaction will be subject to
      the
      following primary conditions: 1) no material adverse change to Carthew Bay’s
      business; 2) execution of employment agreements between GSI and key personnel
      of
      Astris; 3) completion prior to July 31, 2007; 4) approval by at least two thirds
      of the votes cast at a Special Meeting of Astris shareholders on July 10, 2007;
      5) closing terms typical of an asset purchase; 6) receipt of all necessary
      government approvals; and 7) exclusivity to MKU for the period to closing.
      As
      such, the Company has agreed to a non-refundable break-up fee equal to the
      greater of any advances under the secured convertible promissory note operating
      facility described above or $500,000, at the time of any breach. Upon
      termination, the promissory note would immediately become due and
      payable.




On
      August 1, 2007, the Company sold substantially all its assets, including its
      wholly-owned subsidiaries, to MKU Canada Inc., an arm’s-length third party. MKU
      Canada Inc. is a wholly-owned subsidiary of MKU Cyprus Ltd. The transaction
      includes the sale of substantially all of the assets of the Company, including
      its fuel cell and test load technology assets for consideration of: i)
      US$3,064,363 in cash ($3,216,049 Canadian: ii) forgiveness of US$1,225,000
      and
      $380,000 Canadian of face value secured convertible debentures held by ACME
      Global Inc. (a subsidiary of MKU Cyprus Ltd.) along with US$210,000 ($234,558
      Canadian) of accrued interest: iii) an option for the Company, for a
      consideration of $1 to purchase 4,248,750 of its own shares: iv) the forgiveness
      of a secured convertible promissory note in the amount of US$600,000 ($642,700
      Canadian). The Company has exercised the option to reacquire and cancel the
      4,248,750 of its own shares.





With
      the
      sale of substantially all of its assets, the Company ceased to be in the
      development stage. In prior years, the Company reported as a development stage
      enterprise.





The
      Company changed its name to Carthew Bay Technologies Inc. on August 17, 2007.





On
      December 10, 2007, the Company announced that it had executed a letter of intent
      (“LOI”) with Colorep Inc. (“Colorep”) relating to a transaction whereby shares
      of the Company will be issued in exchange for all of the issued and outstanding
      shares of Colorep under terms that constitute a reverse takeover (“RTO”)
      pursuant to Emerging Issue Committee abstract EIC-10, *Reverse
      Takeover Accounting,* of the
      CICA Handbook. Following the successful completion of the RTO, the Company
      will
      become the legal parent of, and the existing shareholders of Colorep will
      acquire control of, the combined enterprise. Successful completion of the RTO
      is
      subject to several conditions as discussed below.




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Colorep
      is located in Rancho Cucamonga, CA, and develops and offers for sale sustainable
      subsurface printing and dyeing technology for decorating a wide variety of
      textiles and other consumer products. Colorep has previously announced its
      intention to acquire Transprint USA Inc. (“Transprint”), a privately held,
      employee-owned company, founded in 1978, with headquarters and manufacturing
      facilities in Harrisonburg, VA, and design studios and showrooms in New York
      City and Charlotte, NC. Transprint offers printing products and design services
      worldwide for the apparel, commercial and residential furnishings markets.
      The
      definitive share purchase agreement between Colorep and Transprint has been
      completed. One of the conditions precedent to the conclusion of the RTO under
      the LOI is receipt by Colorep of a credit facility sufficient to enable Colorep
      to conclude the acquisition of Transprint.




Pursuant
      to the LOI and subject to the terms thereof, the Company will invest US
      $2,000,000 in two equal tranches into secured debentures (the “Debentures”) of
      Colorep. The Debentures will bear interest at 1% per month (unless increased
      pursuant to the terms of the LOI) and interest will accrue until maturity on
      April 30, 2008. Subject to certain conditions, the Company is obligated to
      advance the first US $1,000,000 to Colorep upon execution of a binding share
      exchange agreement. The LOI further provides that upon receipt of all approvals,
      including shareholder and regulatory approvals, necessary to conclude the RTO,
      the Company will cancel the Debentures. There are many conditions associated
      with the conclusion of the various transactions included as part of the LOI
      including: a) a condition that the Company consolidate its shares pursuant
      to a
      formula included as part of the LOI, and b) the completion of Transprint
      acquisition by Colorep.




Subject
      to certain extension provisions set out in the LOI, the transactions
      contemplated thereunder must be completed prior to April 30, 2008. Upon closing
      of the RTO, all of the current members of the Board of Directors of the Company,
      other than Michael Liik, will resign and will be replaced by between four and
      six new members.




Execution
      of the LOI has received the unanimous approval for the Board of Directors of
      the
      Company.




On
      February 1, 2008, Carthew Bay technologies advanced the first $1 million in
      respect of the secured debenture financing for Colorep Inc. This tranche is
      the
      initial advance of a total $2 million financing contemplated in the previously
      announced Letter of Intent with Colorep, to be followed by a transaction whereby
      shares of CBT will be exchanged for all of the issued and outstanding shares
      of
      Colorep.




In
      conjunction with the proposed RTO, the Board of Directors of the Company
      approved a Success Fee payable to its CEO and CFO amounting to 1.4% of the
      Colorep transaction value or $1,150,000, earned upon closing of the Colorep
      RTO
      transaction and payable as a combination of cash remaining in the Company
      immediately prior to the RTO transaction and treasury shares of the Company
      issued at a price equivalent to the value per share (after giving consideration
      to the shares issued in this regard) received by the shareholders of the Company
      as a consequence of the RTO. The fee would be increased by an additional 0.06%
      of the transaction value or $500,000, or such pro-rated amount, determined
      3
      months after closing of the RTO transaction and based upon the performance
      of
      the post-RTO shares. In the




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event
      that the performance of the post-RTO shares
      (with the definition of performance to be established in a formal agreement),
      is
      between $0.70 per share equivalent value (as described in the LOI) and $1.00
      per
      share, the additional $500,000 fee would be pro-rated such that no fee would
      be
      earned on the lower threshold and the full fee earned on the upper threshold.
      This fee would be payable in treasury shares of the Company on the basis
      described above.




On
      May
      22, 2008, Carthew Bay Technologies entered into a consulting agreement with
      Macnor Corp and Jiri Nor to provide repair services to a generator previously
      sold by Astris Energi in 2005 as well as assist in the preparation of filings
      on
      behalf of Carthew Bay Technologies for amounts to be claimed for the 2007 Fiscal
      Year from the Government of Canada under the Scientific Research and
      Experimental Development Program administered by the Canada Revenue
      Agency.




On
      May
      23, 2008, Carthew Bay Technologies Executed Agreement and Plan of Merger with
      Colorep, Inc. and advanced a second US$1.0 Million in respect of the Secured
      Debenture Financing related thereto.




D.
            EXCHANGE
                CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY
                HOLDERS




There
      are
      no governmental laws, decrees or regulations in Canada relating to restrictions
      on the import/export of capital affecting the remittance of interest, dividends
      or other payments to non-residential holders of the Company's Common Shares.
      Any
      such remittances to United States residents, however, are subject to a 15%
      withholding tax pursuant to Article X of the reciprocal tax treaty between
      Canada and the United States. See Part E below.




Except
      as
      provided in the Investment Canada Act (the "Act"), there are no limitations
      under the laws of Canada, the Province of Ontario or in the charter or any
      other
      constituent documents of the Company on the right of foreigners to hold and/or
      vote the Common Shares of the Company.




The
      Act
      requires a non-Canadian making an investment to acquire control of a Canadian
      business, the gross assets of which exceed certain defined threshold levels,
      to
      file an application for review with Investment Canada, the federal agency
      created by the Act.




As
      a
      result of the Canada-U.S. Free Trade Agreement, the Act was amended in January
      1989 to provide distinct threshold levels for Americans who acquire control
      of a
      Canadian business.




A
      Canadian business is defined in the Act as a business carried on in Canada
      that
      has a place of business in Canada, an individual or individuals in Canada who
      are employed or self-employed in connection with the business, and assets in
      Canada used in carrying on the business.




An
      American, as defined in the Act, includes: an individual who is an American
      national or a lawful permanent resident of the United States; a government
      or
      government agency of the United States; an American-controlled




50
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entity,
      corporation or limited partnership or trust which is not controlled in fact
      through ownership of its voting interests of which two-thirds of its Board
      of
      Directors, general partners or trustees, as the case may be, are any combination
      of Canadians or Americans.




The
      following investments by a non-Canadian are subject to review by Investment
      Canada:





(a)
            all
                direct acquisitions of control of Canadian businesses with assets of
                CDN$5 million or more;





(b)
            all
                indirect acquisitions of control of Canadian businesses
                with  assets of CDN$50 million or more if such assets represent
                less than 50% of the value of the assets of the entities, the
                control of which is being acquired;
                and





(c)
            all
                indirect acquisitions of control of Canadian businesses with assets
                of
                CDN$5 million or more if such assets represent more than 50% of the
                value of the assets of the entities, the control of which is being
                acquired.




Review
      by
      Investment Canada is required when investments by Americans exceed CDN$150
      million for direct acquisitions of control. For the purposes of the Act, direct
      acquisition of control means: a purchase of the voting interest on a
      corporation, partnership, joint venture or trust carrying on a Canadian
      business, or any purchase of all or substantially all of the assets used in
      carrying on a Canadian business; and indirect acquisition of control means
      a
      purchase of the voting interest of a corporation, partnership, joint venture
      or
      trust, whether a Canadian or foreign entity, which controls a corporation,
      partnership, joint venture or trust carrying on a Canadian business in
      Canada.




The
      acquisition of certain Canadian businesses is excluded from the higher
      thresholds set out for Americans. These excluded businesses include oil, gas,
      uranium, financial services (except insurance); transportation services and
      cultural services (i.e. the publication, distribution or sale of books,
      magazines, periodicals (other than printing or typesetting businesses), music
      in
      print or machine readable form, radio, television, cable and satellite services;
      the publication, distribution, sale or exhibitions of film or video recordings
      or audio or video music recordings).




Direct
      or
      indirect acquisitions of control of these excluded businesses are reviewable
      at
      the CDN$5 and CDN$50 million thresholds.




A
      non-Canadian shall not implement an investment reviewable under the Act unless
      the investment has been reviewed and the Minister responsible for Investment
      Canada is satisfied or is deemed to be satisfied that the investment is likely
      to be of net benefit to Canada. If the Minister is not satisfied that the
      investment is likely to be a net benefit to Canada, the non-Canadian shall
      not
      implement the investment or, if the investment has been implemented, shall
      divest himself of control of the business that is the subject of the
      investment.




A
      non-Canadian or American making the following investments:




51
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(i)
            an
                investment to establish a new Canadian business;
                and





(ii)
            an
                investment to acquire control of a Canadian business
                which  investment is not subject to review under the Act, must
                notify Investment Canada, within prescribed time limits, of such
                investments.





E.
              TAXATION.





CANADIAN
      INCOME TAX CONSEQUENCES




Management
      of the Company considers that the following discussion respecting taxation
      fairly describes the principal and material Canadian federal income tax
      consequences applicable to shareholders of the Company who are residents of
      the
      United States and are not residents of Canada and do not hold,
      and
      are deemed not to hold, Common Shares of the Company in connection with carrying
      on a business in Canada (a "non-resident").




Generally,
      dividends paid by Canadian corporations to non-resident shareholders are subject
      to a withholding tax of 25% of the gross amount of such dividends. However,
      Article X of the reciprocal tax treaty between Canada and the United States
      reduced to 15% the withholdings tax on the gross amount of dividends paid to
      residents of the United States. A further 10% reduction in 1997 in the
      withholding tax rates on the gross amount of dividends is applicable when a
      U.S.
      corporation owns at least 10% of the voting stock of the Canadian corporation
      paying the dividends.




A
      non-resident who holds Common Shares as capital property will not be subject
      to
      tax on capital gains realized on the disposition of such Shares unless such
      Shares are "taxable Canadian property" within the meaning of the Income Tax
      Act
      (Canada), and no relief is afforded under any applicable tax treaty.
 However, the Common Shares of Astris are taxable Canadian property because
      they are not traded on a prescribed stock exchange.  This creates Canadian
      filing requirements for non-residents. Non-Canadian Residents would be required
      to file a special Canadian Income Tax Return for dispositions of shares in
      Astris stock and would be taxable in Canada on any Net Capital Gains earned
      on
      such dispositions.





UNITED
      STATES FEDERAL INCOME TAX CONSEQUENCES




The
      following discussion describes the United States federal income tax consequences
      of the ownership and disposition of Common Shares of the Company. The discussion
      contained in this summary is based on the Internal Revenue Code of 1986, as
      amended (the "Code"), existing and proposed Treasury Regulations, judicial
      decisions and administrative pronouncements, all of which are subject to change.
      Any such changes may be applied retroactively in a manner that could result
      in
      federal income tax consequences different from those discussed
      below.




This
      summary discusses only Common Shares of the Company held by a U.S. Holder
      (defined below) as a capital asset within the meaning of Section 1221 of the
      Code, and does not deal with special situations, such as those of banks, thrift
      institutions, real estate investment trusts, regulated




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investment
      companies, insurance companies, dealers in securities or commodities, tax-exempt
      investors, holders whose functional currency is not the U.S. dollar, persons
      who
      hold Common Shares of the Company as a position in a straddle, as part of a
      synthetic security or hedge, as part of a conversion transaction or other
      integrated investment, or persons who are not U.S. Holders (as defined below).
      Further, the summary does not include any description of any alternative minimum
      tax consequences or any state, local or foreign tax consequences that may be
      applicable. This summary assumes that no U.S. Holder will own, directly or
      indirectly, Common Shares of the Company representing 10% or more of the voting
      power of the Company.




HOLDERS
      OF COMMON SHARES OF THE COMPANY ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
      RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF
      SUCH
      SHARES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE TAX
      CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS, AND THE POSSIBLE
      EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS.




As
      used
      herein, a "U.S. Holder" means a beneficial owner of Common Shares of the Company
      who is (I) a citizen or resident of the United States, (ii) a corporation,
      partnership or other entity created or organized in or under the laws of the
      United States or any State thereof or the District of Columbia,(iii) an estate
      the income of which is subject to United States federal income taxation
      regardless of its source, or (iv) a trust the administration of which is subject
      to the primary supervision of a court within the United States and for which
      one
      or more U.S. persons have the authority to control all substantial
      decisions.




If
      dividends were to be declared, they could be treated as dividends from a
      qualified foreign corporation and, accordingly, be subject to a 15% U.S. tax
      rate.





Dividends




Distributions
      with respect to the Common Shares (other than liquidating distributions and
      certain distributions in redemption of the Common Shares) which are paid out
      of
      current or accumulated earnings and profits, as calculated for United States
      federal income tax purposes, generally will constitute dividends taxable as
      ordinary income. To the extent the amount of any such distribution paid with
      respect to the Common Shares exceeds current and accumulated earnings and
      profits, as calculated for United States federal income tax purposes, such
      excess distribution will not constitute a dividend for United States federal
      income tax purposes, but will be treated first as a tax-free return of capital
      to the extent of the holder's adjusted tax basis in his Common Shares (with
      a
      corresponding reduction in such basis) and, to the extent the distribution
      exceeds such basis, as a capital gain.





Foreign
      Tax Credit




A
      U.S.
      Holder who pays (or has had withheld from distributions) Canadian income tax
      with respect to the ownership of Common Shares of the Company may be entitled,
      at the option of the U.S. Holder, to either a deduction or a tax




53
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credit
      for such foreign tax paid or withheld. This election is made on a year-by-year
      basis and applies to all foreign taxes paid by (or withheld from) the U.S.
      Holder during that year. There are significant and complex limitations that
      apply to the credit, among which is the general limitation that the credit
      cannot exceed the proportionate share of the U.S. Holder’s United States Federal
      income tax liability that the U.S. Holder’s foreign source income bears to his
      worldwide taxable income. The availability of the foreign tax credit and the
      application of the limitations on the credit are fact specific and holders
      and
      prospective holders of Common Shares should consult their own tax advisors
      regarding their individual circumstances.




Dispositions,
      Including Redemptions




Any
      sale,
      exchange, redemption (except as discussed below) or other disposition of the
      Common Shares generally will result in taxable gain or loss equal to the
      difference between the amount received upon the sale, exchange, redemption
      or
      other disposition and the holder's adjusted tax basis in the Common Shares.
      Such
      gain or loss generally will be capital gain or loss and will be long-term
      capital gain or loss if the holding period for the Shares of the Company exceeds
      one year.




In
      certain cases, a redemption of Common Shares may be treated as a dividend,
      rather than as a payment in exchange for the Shares of the Company. In such
      events, the redemption payment will be treated as ordinary dividend income
      to
      the extent that such payment is made out of current or accumulated earnings
      and
      profits, as calculated for United States federal income tax purposes. The
      determination of whether the redemption will be treated as a dividend rather
      than as payment in exchange for the Common Shares of the Company will depend
      upon whether and to what extent the redemption reduces the holder's percentage
      stock ownership interest in the Company. A redemption will be treated as an
      exchange of stock that produces a capital gain if the redemption either (1)
      completely terminates the holder's interest in the Company under Section
      302(b)(3) of the Code, (2) is "substantially disproportionate" with respect
      to
      the holder under Section 302(b)(2) of the Code, or (3) is "not essentially
      equivalent to a dividend" under Section 302(b)(1) of the Code.




A
      redemption will completely terminate the holder's interest in the Company if,
      as
      a result of the redemption, the holder no longer has any stock interest in
      the
      Company, directly or constructively after application of the attribution rules
      of Section 302(c) of the Code. A redemption will be "substantially
      disproportionate" with respect to the holder if (1) the ratio of the voting
      stock owned by the holder (including stock attributed to the holder under
      Section 302(c) of the Code) immediately after the redemption to all the voting
      stock of the Company is less than 80% of the same ratio for the voting stock
      owned by the holder immediately before the redemption, (2) there is a similar
      percentage reduction in the ownership by the holder of Common Shares of the
      Company, and (3) the holder owns less than 50% of the voting stock of the
      Company. Whether a redemption is "not essentially equivalent to a dividend"
      with
      respect to a holder will depend upon the holder's particular circumstances.
      The
      IRS has ruled that a minority shareholder in a publicly held corporation whose
      relative stock interest is minimal and who exercises no control with respect
      to
      corporate affairs is considered to have a "meaningful reduction" if such
      shareholder has a




54
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reduction
      in his percentage stock ownership. In determining whether any of the foregoing
      tests have been satisfied, the holder is deemed, under the constructive
      ownership rules of Section 302(c) of the Code, to own any Common Shares in
      the
      Company owned by certain related persons and entities and any Common Shares
      which the holder or certain related persons and entities have an option to
      acquire. However, because of the ambiguities in applying the foregoing rules,
      holders should consult their tax advisors to determine whether a redemption
      of
      Common Shares will be treated as a dividend or as a payment in exchange for
      the
      Common Shares of the Company.





F.
              DIVIDENDS
                  AND PAYING AGENTS




Not
      Applicable.





G.
              STATEMENT
                  BY EXPERTS




Not
      Applicable.





H.
              DOCUMENTS
                  ON DISPLAY




The
      Company is subject to the informational requirements for foreign private issuers
      under the Securities Exchange Act of 1934, as amended. In accordance with these
      requirements, the Company files reports on Form 20-F and 6-K with the United
      States Securities and Exchange Commission. These materials, including this
      annual report and the exhibits thereto, may be inspected and copied at the
      Commission's Public Reference Room at 100 F Street, N.E., Washington, DC 20549.
      Copies of the materials may be obtained from the Public Reference Room at
      prescribed rates. The public may obtain information on the operations of the
      Commission's Public Reference Room by calling the Commission in the United
      States at 1-800-SEC-0330. The Commission also maintains a web site at
      http://sec.gov that contains reports, proxy statements and other information
      regarding registrants that file electronically with the Commission.





I.
              SUBSIDIARY
                  INFORMATION




Not
      Applicable.





ITEM
              11.
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK





INTEREST
      RATE RISK.




The
      Company does not have any significant exposure to changes in interest
      rates.





IMPACT
      OF
      CURRENCY FLUCTUATIONS




The
      Company's operating expenses are primarily paid in Canadian dollars.
 Fluctuations in the exchange rate between the Canadian dollar and such
      other currencies may have a material effect on the Company's results of
      operations. In particular, the Company may be adversely affected by a
      significant strengthening of the Canadian dollar against the U.S. dollar or
      Euro. The Company has not previously engaged in, and does not now intend to
      enter into,




55
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any
      currency hedging or other similar currency hedging transactions. The Company
      may
      enter into such transactions on a non-speculative basis to the extent that
      it
      might in the future have substantial foreign currency exposure.





ITEM
              12.
            DESCRIPTION
                OF SECURITIES OTHER THAN EQUITY
                SECURITIES




Not
      Applicable.





PART
      II.





ITEM
              13.
            DEFAULTS,
                DIVIDEND ARREARAGES AND
                DELINQUENCIES




None.





ITEM
              14.
            MATERIAL
                MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OFPROCEEDS




None.





ITEM
              15.
            CONTROLS
                AND PROCEDURES




EVALUATION
        OF DISCLOSURE CONTROLS AND PROCEDURES
 The
            Company’s Chief Executive Officer and Chief Financial Officer, as of the
            end of the fiscal year covered by this Annual Report have evaluated the
            effectiveness of the Company’s disclosure controls and procedures (as defined in
            Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon such
            evaluation, the Chief Executive Officer and Chief Financial Officer concluded
            the Company’s disclosure controls and procedures were not effective. In addition
            to our disclosure and procedures, management is currently enhancing its
            corporate governance and audit committee team to strengthen the Company’s
            overall internal controls over financial reporting (ICOFR).
 
 MANAGEMENT’S
          REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 Our
              management is responsible for establishing and maintaining adequate
              internal
              control over financial reporting, as such term is defined in
              Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
              system was designed to provide reasonable assurance regarding the reliability
              of
              financial reporting and the preparation of financial statements for
              external
              purposes, in accordance with generally accepted accounting principles.
              Because
              of inherent limitations, a system of internal control over financial
              reporting
              may not prevent or detect misstatements. Also, projections of any evaluation
              of
              effectiveness to future periods are subject to the risk that controls
              may become
              inadequate due to a change in conditions, or that the degree of compliance
              with
              the policies or procedures may deteriorate.
  Our
              management, including our Chief Executive Officer and Chief Financial
              Officer as
              of the end of the fiscal year covered by this Annual Report, conducted
              an
              evaluation of the effectiveness of our internal control over financial
              reporting.  Based on its evaluation, management concluded that there
              is a material weakness in our internal control over financial reporting
              and
              accordingly our internal control over financial reporting is not effective.
              A
              material weakness is a deficiency, or a combination of control deficiencies,
              in
              internal control over financial reporting such that there is a reasonable
              possibility that a material misstatement of the Company’s annual or interim
              financial statements will not be prevented or detected on a timely
              basis.


56
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The
        material weakness relates to the monitoring and review of work performed
        by our
        Chief Financial Officer and lack of segregation of duties.  In the
        preparation of audited financial statements, footnotes and financial data
        all of our financial reporting is carried out by our Chief Financial Officer,
        and we do not have an effective process to review the work
        performed.  The lack of segregation of duties results from a
minimal operation with two individuals. To mitigate this material weakness
        to the fullest extent possible, all financial reports are monitored and reviewed
        by the President and Chief Executive Officer. All unexpected results are
        investigated. We are currently in the process of hiring additional accounting
        consultants to assist in implementing additional procedures for the monitoring
        and review of work performed by our Chief Financial Officer.
  This
        annual report does not include an attestation report of the Company’s registered
        public accounting firm Danziger Hochman Partners LLP regarding internal control
        over financial reporting. Management’s report was not subject to attestation by
        our registered public accounting firm pursuant to temporary rules of the
        SEC
        that permit us to provide only management’s report in this Annual Report on Form
        20-F/A.


CHANGES
          IN INTERNAL CONTROL OVER FINANCIAL REPORTING
 No
            change
            in the Company’s internal control over financial reporting occurred during the
            quarter ended December 31, 2007, that materially affected, or is reasonably
            likely to materially affect, the Company s internal control over financial
            reporting.


ITEM
      16.





A.
            AUDIT
                COMMITTEE FINANCIAL
                EXPERT




Members
      of the Audit Committee have broad financial experience which has been gained
      in
      a variety of disciplines including investment banking, supervision of finance
      functions and general management, and the Board is satisfied that collectively
      they have the requisite financial skills and expertise to enable them fully
      to
      carry out their responsibilities. However, the Board considers that no
      individual member of the committee qualifies as a “financial expert” within the
      terms of the definition set out in the Sarbanes-Oxley Act of 2002. Currently
      the
      CEO is a member of the Audit Committee as well as one other Director who is
      independent.





C.
            PRINCIPAL
                ACCOUNTANT FEES AND
                SERVICES




For
      the
      year ended 2007 and 2006, the audit fees were CDN $71,886, and CDN$55,000.
       For the year ended 2006 the audit-related fees for the principal
      accountants were CDN$ 61,646 and for 2005 $41,270.  For the years ended
      2007 and 2006, the tax related fees for the principal accountants were CDN
      $NIL
      and CDN $NIL.  The Company’s audit committee’s pre-approval of audit fees
      is discussed in advance with the principal accountant and the audit committee.
      If there are any adjustments, they are approved by the audit committee.




E.
            PURCHASES
                OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
                PURCHASERS




Not
      Applicable.




PART
      III.




57
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ITEM
              17.
            FINANCIAL
                STATEMENTS





The
      following documents are filed as Attachment A hereto and are included as part
      of
      this Form 20-F.





CARTHEW
      BAY TECHNOLOGIES INC. (FORMERLY ASTRIS ENERGI INC.) CONSOLIDATED FINANCIAL
      STATEMENTS





Description
      of Document:




Auditors'
      Report for the year ended December 31, 2007.


Auditors’
      Report for the year ended December 31, 2006.


Auditors’
      Report for the year ended December 31, 2005.


Consolidated
      Balance Sheets for the year ended December 31, 2007, 2006 and 2005.


Consolidated
      Statements of Loss and Deficit for the years ended December 31, 2007, 2006
      and
      2005.


Consolidated
      Statements of Cash Flows for the years ended December 31, 2007, 2006 and
      2005.


Notes
      to
      Consolidated Financial Statements for the year ended December 31, 2007, 2006
      and
      2005.





ITEM
              18.
            FINANCIAL
                STATEMENTS




Not
      applicable.





ITEM
              19.
            EXHIBITS





3.1*
            Memorandum
                of Association of Kayty Exploration Ltd., filed March 18,1981 with
                the
                Province of Alberta Office of Consumer and Corporate
                Affairs.





3.2*
            Articles
                of Association of Kayty Exploration Ltd., filed March 18,1981 with
                the
                Province of Alberta Office of Consumer and Corporate
                Affairs.





3.3*
            Certificate
                amending the Memorandum of Association of Kayty Exploration Ltd.,
                filed
                July 9, 1981 with the Province of Alberta Office of Consumer and
                Corporate
                Affairs.





3.4*
            Certificate
                amending the Memorandum of Association of Kayty Exploration Ltd.,
                filed
                November 6, 1981 with the Province of Alberta Office of Consumer
                and
                Corporate Affairs.





3.5*
            Certificate
                amending the Memorandum of Association of Kayty Exploration Ltd.,
                filed
                March 11, 1982 with the Province of Alberta Office of Consumer and
                Corporate Affairs.





3.6*
            Certificate
                amending the Memorandum of Association of Kayty Exploration Ltd.,
                filed
                August 9, 1982 with the Province of Alberta Office of Consumer and
                Corporate Affairs.





3.7*
            Articles
                of Continuance for Kayty Exploration Ltd., filed September 22, 1987
                with
                the Ministry of Consumer and Commercial Relations, Province of Ontario,
                Canada.






58
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3.8*
            Articles
                of Amendment for Kayty Inc., filed December 7, 1994 with the Ministry
                of
                Consumer and Commercial Relations, Province of Ontario,
                Canada.





3.9*
            Articles
                of Amendment for WLD Inc., filed July 4, 1995 with the Ministry of
                Consumer and Commercial Relations, Province of Ontario,
                Canada.





3.10*
            By-Laws
                of Astris Energi Inc., dated April 12,
                1996.





4.1*
            Astris
                Energi Inc. Stock Option Plan, dated June
                2000.





4.2*
            Form
                of Convertible Debenture Document with Cornell Capital Partners,
                LP, dated
                April 10, 2006.





4.3*
            Warrant
                number CCP-001 to Cornell Capital Partners, LP dated April 10,
                2006.





4.4*
            Warrant
                number CCP-002 to Cornell Capital Partners, LP dated April 10, 2006.





4.5*
            Warrant
                number CCP-003 to Cornell Capital Partners, LP dated April 10, 2006.




10.1*
            License
                Agreement between Astris Energi Inc. and Energy Ventures Inc.(Canada)
                dated October 22, 1998.





10.2*
            Debenture
                by Astris Energi Inc and Astris Inc. to and in favor of Energy Ventures
                Inc. (Canada) dated October 22,
                1998.





10.3*
            Equipment
                Lease between Astris Inc. and Energy Ventures Inc. (Canada) dated
                October
                22, 1998.





10.4*
            License
                Agreement with Macnor Corp. dated October 1,
                1999.





10.5*
            Lease
                for property located at 2175 Dunwin Drive, Unit 6, Mississauga, Ontario,
                between 789542 Ontario Limited and Astris Energi Inc, dated April
                14,
                2000.





10.6*
            License
                Agreement, between Astris Inc. and Astris s.r.o., dated January 30,
                1995.





10.7*
            Grant
                of Options by Astris Energi Inc. to Energy Ventures Inc., dated October
                22, 1998.





10.8*
            Agreement
                between Astris Energi Inc. and Fuelcellstore.com, Inc., dated October
                12,
                2000.





10.9*
            Assignment
                Agreement between Josef Soltys and Astris Inc. for Canadian Patent
                #1,295,679, for QUICKCELL, dated November 15,
                1995.





10.10*
            Debenture
                between Astris Inc. and Donald Alex Blenkarn, in trust, dated September
                30, 1996.





10.11*
            Value
                Added Reseller Agreement with Alternate Energy Corp., dated May 14,
                2004.






59
 *Table
          of Contents*





10.12*
            Co-operation
                agreement with El.ma, dated October 15,
                2004.





10.13*
            Consulting
                Agreement with Liikfam Holdings, dated December 10,
                2004.





10.14*
            Purchase
                and Escrow Agreement between Astris Energi Inc., Macnor Corporation
                and
                2062540 Ontario Inc. dated January 20,
                2005.





10.15*
            Teaming
                Arrangement with Plasma Environmental Technologies Inc., dated February
                23, 2005.





10.16*
            Agreement
                with First Energy Advisors, dated May 22,
                2003.





10.17*
            Assignment
                of technology to Astris Energi Inc. from Macnor Corporation, dated
                July
                25, 2005.





10.18*
            Form
                of Convertible Debenture document, dated March 24, 2005.





10.19*
            Securities
                Purchase Agreement with Cornell Capital Partners LP, dated April
                10, 2006.





10.20*
            Investor
                Registration Rights Agreement with Cornell Capital Partners LP, dated
                April 10, 2006.





10.21*
            Security
                Agreement with Cornell Capital Partners LP, dated April 10,
                2006.





10.22*
            Security
                Agreement between 2062540 Ontario Inc. and Cornell Capital Partners
                LP,
                dated April 10, 2006.





10.23*
            Share
                Escrow Agreement with Cornell Capital Partners LP, dated April 10,
                2006.





10.24*
            Irrevocable
                Transfer Agent Instructions between Equity Transfer Services, Inc.,
                Cornell Capital Partners LP and Astris Energi
                Inc.





10.25*
            Letter
                of Intent to Sell Assets to Green Shelters Innovations Ltd. To sell
                substantially all of Astris Energi Inc’s assets. Dated April 19,
                2007.





10.26*
            Loan
                Agreement between Astris Energi Inc. and Green Shelter Innovations
                Ltd. To
                provide on-going financing due July 31, 2007. Dated May 4,
                2007.





10.27*
            Asset
                Purchase Agreement with the Issuer and 2062540 Ontario, Inc. a
                wholly-owned subsidiary of the Issuer and MKU Canada, Inc. and affiliate
                of Green Shelters Innovations Ltd. Dated June 5,
                2007.





10.28*
            Settlement
                Agreements between Jiri Nor, Peter Nor, Anthony Durkacz, Macnor Corp,
                Fortius Research and Trading Corp, and Astris Energi Inc. Dated July
                26,
                2007.





10.29*
            Completion
                of Astris Energi Inc. asset sale to MKU Canada, Inc. Dated August
                1,
                2007.






60
 *Table
          of Contents*





10.30*
            Astris
                Energi Inc. changes name to Carthew Bay Technologies Inc. and trading
                symbol becomes “CWBYF” on the OTC Bulletin Board. Dated August 22,
                2007.





10.31*
            Letter
                of Intent for Reverse Takeover transaction of Colorep, Inc. Dated
                December
                9, 2007.





10.32*
            Secured
                Debenture Financing provided to Colorep, Inc. for US$1.0 Million.
                Dated
                February 1, 2008.





10.33*
            Execution
                of Agreement and Plan of Merger whereby shares of Carthew Bay Technologies
                will be exchanged for all issued and outstanding shares of Colorep,
                Inc.
                Secured Debenture Financing provided to Colorep, Inc. for US$1.0
                Million.
                Dated May 23, 2008.





10.34*
            Consulting
                Agreement with Macnor Corp dated May 22,
                2008.





12.1
            and
                12.2 302 CERTIFICATION





13.1
            SECTION
                906 CERTIFICATION





23.1
            AUDITORS’
                CONSENT





99*
            CODE
                OF ETHICS





99.1*
            WHISTLEBLOWER
                POLICY





*
            Previously
                filed. Otherwise all other exhibits filed
                herewith.








SIGNATURES




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





CARTHEW
                BAY TECHNOLOGIES INC.
              (FORMERLY
                ASTRIS ENERGI INC.)By:
            /s/
              Michael LiikPresident
                and Chief Executive OfficerDate:
                September 18, 2008




61
 *Table
          of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**





**Consolidated
      Financial Statements**


**(Canadian
      Dollars)**


December
      31, 2007, 2006 and 2005





*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**





**INDEX**





**December
      31, 2007, 2006 and 2005**





**PAGE****INDEPENDENT
                AUDITORS’ REPORT**
            1**FINANCIAL
                STATEMENTS**Consolidated
                Balance Sheets - Statement I
            2Consolidated
                Statements of Operations and Deficit - Statement
                II
            3Consolidated
                Statements of Cash Flows – Statement
                III
            4**NOTES
                TO THE CONSOLIDATED FINANCIAL
                STATEMENTS**
            **5
                – 36**




*Table
            of Contents*




**INDEPENDENT
      AUDITORS’ REPORT**





**To
      the Shareholders of**


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**





We
      have
      audited the consolidated balance sheets of **CARTHEW
      BAY TECHNOLOGIES INC. (Formerly Astris Energi Inc.)** as at
      December 31, 2007 and 2006 and the consolidated statements of operations and
      deficit and cash flows for the years ended December 31, 2007, 2006 and 2005.
      These financial statements are the responsibility of the Company’s management.
      Our responsibility is to express an opinion on these financial statements based
      on our audits.





We
      conducted our audits in accordance with Canadian generally accepted auditing
      standards and 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 about whether the financial statements are free
      of
      material misstatement. The Company 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 also includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the financial statements, assessing
      the accounting principles used and significant estimates made by management,
      as
      well as evaluating the overall financial statement presentation. We believe
      that
      our audits provide a reasonable basis for our opinion.





In
      our
      opinion, these consolidated financial statements present fairly, in all material
      respects, the financial position of the Company as at December 31, 2007 and
      2006, and the results of its operations and cash flows for the years ended
      December 31, 2007, 2006 and 2005 in accordance with Canadian generally accepted
      accounting principles.









**Danziger
      Hochman Partners LLP**


**Chartered
      Accountants, Licensed Public Accountants**


**Toronto,
      Canada**


**April
      24, 2008**





Page
            1
 *Table
            of Contents*




**CARTHEW
                BAY TECHNOLOGIES INC.**
              **(Formerly
                Astris Energi Inc.)**
              **Consolidated
                Balance Sheets**
              As
                at December 31, 2007 and 2006
              (Canadian
                Dollars)
            **Statement
                I**







**2007**
            
            **2006****ASSETS****CURRENT**Cash
            
            $
            2,544,431
            
            $
            22,081Accounts
                receivable
            
            
            2,767
            
            
            3,780Inventory
            
            
            —
            
            
            32,127Prepaid
                expenses and deposits
            
            
            87,500
            
            
            140,2052,634,698
            
            
            198,193Deferred
                debenture financing costs
            
            
            —
            
            
            959,787Property,
                plant and equipment (note 3)
            
            
            —
            
            
            580,110Technology
                and patent costs
            
            
            —
            
            
            28,128$
            2,634,698
            
            $
            1,766,218**LIABILITIES****CURRENT**Accounts
                payable and accrued liabilities (note 4)
            
            $
            82,887
            
            $
            425,845Advances
                payable (note 12)
            
            
            —
            
            
            262,250Deferred
                revenue
            
            
            —
            
            
            10,628Current
                portion of obligation under capital lease
            
            
            —
            
            
            10,554Derivative
                liability
            
            
            —
            
            
            616,89482,887
            
            
            1,326,171**LONG-TERM**Obligation
                under capital lease
            
            
            —
            
            
            28,360$CDN
                Convertible debenture (notes 1 and 11(a))
            
            
            —
            
            
            127,703$US
                Convertible debenture (notes 1 and 11(b))
            
            
            —
            
            
            337,20582,887
            
            
            1,819,439**SHAREHOLDERS’
                EQUITY (DEFICIENCY)****SHARE
                CAPITAL**(note
                6 (a))
            
            
            10,845,648
            
            
            11,205,002**CONTRIBUTED
                SURPLUS**(note 6 (c))
            
            
            6,152,788
            
            
            5,183,490**DEFICIT**-
                Statement II
            
            
            (14,446,625
            )
            
            (16,441,713
            )2,551,811
            
            
            (53,221
            )$
            2,634,698
            
            $
            1,766,218





Subsequent
      events (note 14)




Approved on behalf of the Board:Michael
                Liik(Director)
            
            Brian
                Clewes 
                (Director)




*The accompanying notes are an integral
              part of these financial statements*
            Page
                2




*Table
            of Contents*




**CARTHEW
                BAY TECHNOLOGIES INC.**
              **(Formerly
                  Astris Energi Inc.)**
                **Consolidated
                  Statements of Operations and
                  Deficit**
                For
                  the Years Ended December 31, 2007, 2006 and 2005
                (Canadian
                  Dollars)
            **Statement
                II**





**2007**
            
            **2006**
            
            **2005****REVENUE**Sales
            
            $
            31,290
            
            $
            85,915
            
            $
            291,512**EXPENSES**Research
                and development
            
            
            (31,418
            )
            
            792,265
            
            
            909,873General
                and administrative
            
            
            1,011,960
            
            
            1,326,539
            
            
            2,537,127Professional
                fees
            
            
            435,067
            
            
            264,742
            
            
            333,555Interest
                and financing costs
            
            
            348,913
            
            
            467,252
            
            
            83,538Amortization
            
            
            39,788
            
            
            77,504
            
            
            73,113Amortization
                of debenture financing costs
            
            
            261,677
            
            
            367,579
            
            
            —(Gain)
                loss on derivative liability
            
            
            473,146
            
            
            (1,089,544
            )
            
            —Write-off
                of technology
            
            
            —
            
            
            —
            
            
            1,500,000Acquisition
                costs
            
            
            —
            
            
            —
            
            
            185,1702,539,133
            
            
            2,206,337
            
            
            5,622,376**LOSS
                FROM OPERATIONS**
            
            
            (2,507,843
            )
            
            (2,120,422
            )
            
            (5,330,864
            )**GAIN
                ON SALE OF ASSETS**(Note
                1)
            
            
            4,502,931
            
            
            —
            
            
            —**NET
                INCOME (LOSS) BEFORE****PROVISION
                FOR INCOME TAXES**
            
            
            1,995,088
            
            
            (2,120,422
            )
            
            (5,330,864
            )Provision
                for income taxes (note 5)
            
            
            473,533
            
            
            —
            
            
            —Reduction
                  of income taxes on applicationof
                  losses carried forward
            
            
            (473,533
            )
            
            —
            
            
            —**NET
                INCOME (LOSS) FOR THE YEAR****AND
                COMPREHENSIVE INCOME**
            
            
            1,995,088
            
            
            (2,120,422
            )
            
            (5,330,864
            )**DEFICIT,
                BEGINNING OF YEAR**
            
            
            (16,441,713
            )
            
            (14,321,291
            )
            
            (8,990,427
            )**DEFICIT,
                END OF YEAR**
            
            $
            (14,446,625
            )
            $
            (16,441,713
            )
            $
            (14,321,291
            )**Net
                Income (Loss) per Common Share –****Basic**(Note
                6)
            
            $
            0.04
            
            $
            (0.05
            )
            $
            (0.16
            )**Net
                Income (Loss) per Common Share –****Diluted**(Note
                6)
            
            $
            0.03
            
            
            n/a
            
            
            n/a**Weighted
                Average Number of Common Shares Outstanding –
                Basic**
            
            
            52,008,940
            
            
            42,561,626
            
            
            33,656,293**Weighted
                Average Number of Common Shares Outstanding – Diluted**
            
            
            90,531,825
            
            
            n/a
            
            
            n/a




*The accompanying notes are an
                integral
                part of these financial statements*
              Page
                  3





*Table
            of Contents*




**CARTHEW
                BAY TECHNOLOGIES INC.**
              **(Formerly
                    Astris Energi Inc.)**
                  **Consolidated
                    Statements of Cash Flows**
                  For
                    the Years Ended December 31, 2007, 2006 and 2005
                  (Canadian
                    Dollars)
            **Statement
                III**







**2007**
            
            **2006**
            
            **2005****OPERATING
                ACTIVITIES**Net
                income (loss) for the year
            
            $
            1,995,088
            
            $
            (2,120,422
            )
            $
            (5,330,864
            )Items
                not requiring cashWrite-off
                of technology
            
            
            —
            
            
            —
            
            
            1,500,000Amortization
                of capital assets
            
            
            39,788
            
            
            77,504
            
            
            73,113Amortization
                of debenture financing costs
            
            
            261,677
            
            
            367,579
            
            
            —Amortization
                and write-off of goodwill
            
            
            —
            
            
            —
            
            
            21,972Imputed
                interest **–** amortization of debt
                discount
            
            
            218,852
            
            
            314,596
            
            
            —Consulting
                  and professional fees paid in capital stock to non-related
                  parties
            
            
            151,415
            
            
            631,603
            
            
            1,235,824Consulting
                  fees paid in capital stock to related parties
            
            
            —
            
            
            374,533
            
            
            554,308Options
                  and warrants issued to non-employees
            
            
            143,211
            
            
            —
            
            
            718,242(Gain)
                loss on derivative liability
            
            
            473,146
            
            
            (1,089,544
            )
            
            —Stock
                based compensation to employees
            
            
            —
            
            
            —
            
            
            58,391Gain
                on sale of assets
            
            
            (4,502,931
            )
            
            —
            
            
            —Net
                  change in non-cash working capital balances related to
                  operations
            
            
            38,627
            
            
            (192,284
            )
            
            466,733(1,181,127
            )
            
            (1,636,435
            )
            
            (702,281
            )**INVESTING
                ACTIVITIES**Purchase
                of property, plant and equipment and patents
            
            
            (63,306
            )
            
            (5,049
            )
            
            (69,206
            )Cash
                acquired on purchase of Astris s.r.o.
            
            
            —
            
            
            —
            
            
            87,091Astris
                s.r.o. pre-acquisition costs written off
            
            
            —
            
            
            —
            
            
            48,190Proceeds
                from sale of assets (Note 1)
            
            
            3,035,560
            
            
            —
            
            
            —Sale
                (purchase) of other assets
            
            
            —
            
            
            (17,249
            )
            
            (7,638
            )2,972,254
            
            
            (22,298
            )
            
            58,437**FINANCING
                ACTIVITIES**Proceeds
                from issuance of convertible debenture
            
            
            —
            
            
            —
            
            
            420,000Redemption
                of common shares
            
            
            (4,800
            )
            
            —
            
            
            —Repayment
                of obligation under capital lease
            
            
            (6,641
            )
            
            (8,197
            )
            
            —Proceeds
                from issuance of $US convertible debentures
            
            
            —
            
            
            1,740,003
            
            
            —Deferred
                financing costs
            
            
            —
            
            
            (341,099
            )
            
            —Proceeds
                from advances payable
            
            
            742,664
            
            
            262,
                250
            
            
            —Proceeds
                  from issuance of common shares upon exercise of
                  options
            
            
            —
            
            
            —
            
            
            73,350731,223
            
            
            1,652,957
            
            
            493,350**NET
                INCREASE (DECREASE) IN CASH**
            
            
            2,522,350
            
            
            (5,776
            )
            
            (150,494
            )**CASH,
                BEGINNING OF YEAR**
            
            
            22,081
            
            
            27,857
            
            
            178,351**CASH,
                END OF YEAR**
            
            $
            2,544,431
            
            $
            22,081
            
            $
            27,857


Note
      7 **–** Supplemental Disclosure of Cash Flows
      Information




*The accompanying notes are an
                integral
                part of these financial statements*
              Page
                  4





*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)









**1.**
            **DESCRIPTION
                OF BUSINESS**





Carthew
      Bay Technologies Inc. (Formerly Astris Energi Inc.) **(** the
      “Company”) designed, developed, manufactured and sold alkaline fuel cells
      (“AFCs”) and alkaline fuel cell systems, fuel cell and battery test loads and
      provide engineering and other services.




Since
      inception, the efforts of the Company have been devoted to the development
      of
      AFCs for industrial, commercial, educational, scientific, transportation and
      similar applications.  The Company had not earned significant revenues.


On
          August
          1, 2007, the Company sold substantially all its assets, including its
          wholly-owned subsidiaries, to MKU Canada Inc., an arm’s-length third party. MKU
          Canada Inc. is a wholly-owned subsidiary of MKU Cyprus Ltd. The transaction
          includes the sale of substantially all of the assets of the Company, including
          its fuel cell and test load technology assets for consideration of: i)
          US$3,064,363 in cash ($3,216,049 Canadian: ii) forgiveness of US$1,225,000
          and
          $380,000 Canadian of face value secured convertible debentures held by
          ACME
          Global Inc. (a subsidiary of MKU Cyprus Ltd.) along with US$210,000 ($234,558
          Canadian) of accrued interest: iii) an option for the Company, for a
          consideration of $1 to purchase 4,248,750 of its own shares: iv) the forgiveness
          of a secured convertible promissory note in the amount of US$600,000 ($642,700
          Canadian). The Company has exercised the option to reacquire and cancel
          the
          4,248,750 of its own shares. (See Note 6 (e) for additional
          information.)





With
      the
      sale of substantially all of its assets, the Company ceased to be in the
      development stage. In prior years, the Company reported as a development stage
      enterprise.





The
                Company changed its name to Carthew Bay Technologies Inc. on August
                17,
                2007.





**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**





***Basis
      of Presentation***





Effective
      January 1, 2005, the Company, Astris Energi Inc., and its wholly-owned
      subsidiary, Astris Inc., were amalgamated to streamline administrative
      functions. The amalgamated company continued with the same name as the parent
      company.





These
      consolidated financial statements have been prepared by management in accordance
      with Canadian Generally Accepted Accounting Principles (“GAAP”) and reflect the
      accounts of the Company and its wholly-owned holding company 2062540 Ontario
      Inc. that in turn holds all the outstanding shares of its foreign subsidiary,
      Astris s.r.o.





2062540
      Ontario Inc. and Astris s.r.o. were sold on August 1, 2007. (See Note
      1)





All
      material inter-company transactions and balances have been eliminated on
      consolidation.




Page
                5




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)







**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)




***Revenue
      Recognition***





Revenues
      from the sale of fuel cell products and related components are recognized when
      there is persuasive evidence of an arrangement, goods have been delivered,
      the
      fee is fixed or determinable and collection is reasonably assured.





Revenues
        relating to engineering and testing services are recognized at the time services
        are rendered.





***Cash
      and Cash Equivalents***





Cash
      equivalents comprise certain highly liquid instruments with a maturity of three
      months or less when purchased. At December 31, 2007 and 2006, the Company had
      no
      cash equivalents.





***Property,
      Plant and Equipment***





Property,
      plant and equipment are recorded at cost less provision for amortization and
      impairment, where indicated. Amortization is provided over the estimated useful
      lives of these assets on a straight-line basis, calculated as follows:





Building
            40
                yearsMachinery
                and equipment
            5
                yearsFurniture
                and fixtures
            10
                yearsLeasehold
                improvements
            Corresponding
                lease term





In
      the
      event that the future undiscounted net cash flows relating to these long lived
      assets are less than their carrying amounts, they are written down to fair
      value.  The impairment loss would be reflected in the operations of the
      year when impairment occurs.





***Inventory***





Inventory
      is valued at the lower of cost or market value. Cost is determined on a first-in
      first-out basis.




Page
                  6




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)







**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)






***Research
      and Development Costs, Investment Tax Credits and Government Assistance***





All
      costs
      relating to scientific research and product evaluation are expensed as incurred.
      Product development costs are expensed as incurred unless the product or process
      is clearly defined; the associated costs can be identified; technical
      feasibility has been reached; there is intention to produce or market the
      product; the future market is clearly defined; and, adequate resources exist
      or
      are expected to be available to complete the project.  To date, these
      criteria have not been met and, accordingly, no development costs have been
      deferred.





Investment
      tax credits are recognized in the period in which the credits are earned and
      realization is considered more likely than not. Government grants are recognized
      when received. Assistance received or receivable is accounted for using the
      cost
      reduction approach.





******2007**
            
            ******2006**
            
            ******2005**Canadian
                SRED credits
            
            $
            388,886
            
            $
            —
            
            $
            283,900Czech
                Republic government grants
            
            
            —
            
            
            177,715
            
            
            137,000$
            388,886
            
            $
            177,715
            
            $
            420,900





***Income
      Taxes***





Income
      taxes are recorded using the liability method.  Future income and deduction
      amounts arise due to temporary differences between the accounting and income
      tax
      bases of the Company’s assets and liabilities.  Future income tax assets
      and liabilities are measured using substantively enacted income tax rates in
      effect for the year in which those temporary differences are expected to be
      recovered or settled. The effect on future income tax assets and liabilities
      of
      a change in income tax rates is recognized in the period that includes the
      date
      of substantive enactment.  Valuation allowances are provided to the extent
      that realization of such benefits is considered to be more unlikely than
      not.





***Use
      of Estimates***





The
      preparation of the consolidated financial statements in conformity with Canadian
      generally accepted accounting principles requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      the reported amounts of revenue and expenses during the year. Financial
      statement items subject to significant management judgment include revenue
      recognition, the completeness of accounts payable and accrued liabilities,
      the
      valuation of convertible debentures, the valuation of stock-based compensation,
      warrant valuation and future income taxes. Actual amounts could differ from
      management’s estimates.




Page
                  7




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)







**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***Financial
      Instruments***





At
      December 31, 2007, the Company’s financial instruments comprise cash, accounts
      receivable and accounts payable and accrued liabilities.





The
      fair
      values of the Company’s financial instruments approximate their carrying values
      due to the short-term nature of the instruments.




The
      Company is exposed to risks arising from fluctuations in interest rates and
      the
      degree of volatility of these rates. The Company does not use derivative
      instruments to reduce its exposure to interest risks.





The
      Company is exposed to credit risk on the accounts receivable from its customers.
       In order to reduce its credit risk, the Company has adopted credit
      policies that include the payment of small orders by credit card before
      shipping, the analysis of the financial position of its customers, and the
      regular review of their credit limit. In addition, before the commencement
      of a
      major order, the Company requests a substantial deposit from the customer.
      These
      deposits, when received, are recorded as deferred revenue until the order is
      delivered.





The
      Company is exposed to risks arising from fluctuations in foreign exchange rates
      and the degree of volatility of these rates.  The Company does not use
      derivative instruments to reduce its exposure to foreign exchange risk.





***Derivative
      Instruments***





The
      Company issued convertible debentures as part of its financing activities.
      Accounting for convertible debentures with a debt conversion into shares
      component based on a varying stock price is covered by SFAS 133 in the United
      States and Section 3855 of the CICA Handbook in Canada. These sources prescribe
      when a financial instrument is to be recognized on the balance sheet and at
      what
      amount; sometimes using fair value and other times using cost-based measures.
      They also specify how financial instrument gains and losses are to be presented
      and define financial instruments to include accounts receivable and payable,
      loans, investments in debt and equity securities, and derivative contracts.
      Details of the accounting for these convertible debentures as derivative
      instruments are included in note 11.




Page
                8




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)








**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***Stock-based
      Compensation***





The
      Company accounts for stock-based compensation in accordance with CICA Handbook
      section 3870, “ *Stock-Based
      Compensation and Other Stock-Based Payments* .”
This
      section establishes standards for the recognition, measurement and disclosure
      of
      stock-based compensation and other stock-based payments made in exchange for
      goods and services, and applies to transactions, including non-reciprocal
      transactions, in which an enterprise grants shares of common stock or other
      equity instruments, or incurs liabilities based on the price of common stock
      or
      other equity instruments. As permitted by Section 3870, the Company applied
      this
      change prospectively for new awards granted on or after January 1, 2002. In
      periods prior to January 1, 2002, the Company recognized no compensation when
      stock options or warrants were issued to employees or
      non-employees.





Effective
      January 1, 2004, the Company adopted the revised accounting recommendations
      contained in the CICA Handbook Section 3870. Commencing in the fiscal year
      2004,
      the Company recorded compensation expense for stock options granted to employees
      on or after January 1, 2004, based on the fair value method of accounting.
      For
      the year ended December 31, 2007, the amount of compensation cost recognized
      in
      income and credited to contributed surplus was $143,241 (2006 - $5,002) (Note
      6
      (c).





***Comprehensive
      Income***





Income
      and losses arising from the translation of certain year-end balances in the
      Company’s foreign subsidiary are insignificant and grouped with currency expense
      on the consolidated statements of operations and deficit.





***Foreign
      Currency Translation***





The
      Company translates foreign currency denominated transactions and the financial
      statements of integrated foreign operations using the temporal method. Monetary
      assets and liabilities denominated in currencies other than Canadian dollars
      are
      translated into Canadian dollars at the rate of exchange in effect at the
      balance sheet date. Revenues and expenses are translated at the transaction
      exchange rate, with the exception of amortization, which is translated at
      historic rates. Foreign currency gains and losses resulting from the translation
      of assets and liabilities are reflected in net income of the
      period.





***Leases***




Leases
      entered into by the Company as a lessee were classified as capital or operating
      leases. Leases that transfer substantially the entire risks and benefits
      incidental to ownership were classified as capital leases. At the inception
      of a
      capital lease, an asset and an obligation were recorded at an amount equal
      to
      the lesser of the present value of the minimum lease payments and the asset’s
      fair market value at the beginning of each lease. Rental payments under
      operating leases are expensed as incurred.




Page
                  9




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)








**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)




***Asset
      Impairment***





The
      Company has adopted CICA Handbook Section 3063, *Impairment
      of Long-lived Assets* .
      This
      standard establishes principles for the recognition, measurement and disclosure
      of the impairment of long-lived assets on a prospective basis. The standard
      outlines the impairment process and defines the impairment loss as being
      measured as the excess of the carrying value of the asset over its fair value.
      The evaluation is performed at the lowest level of a group of assets and
      liabilities with identifiable cash flows that are independent of those of other
      assets and liabilities.





***Loss
      per Share***





Basic
      loss per share is calculated on the weighted average number of common shares
      outstanding during the year.  The diluted loss per share is calculated
      based on the weighted average number of common shares that would have been
      outstanding during the year had all potential common shares been issued at
      the
      beginning of the year or when the underlying options or warrants were granted,
      if later.







***New
      Accounting Pronouncements***





(i)
            Financial
                Instruments





On
      January 1, 2007, the Company adopted CICA Handbook Sections 1530, *Comprehensive
      Income* (‘Section 1530’); Section 3251, *Equity* (‘Section 3251’); Section 3855, *Financial
      Instruments - Recognition and Measurement* (‘Section
      3855’), Section 3861, *Financial
      Instruments - Disclosure and Presentation* (‘Section 3861’) and Section 3865, *Hedges* (‘Section 3865’).





Section
      1530 establishes standards for reporting and presenting comprehensive income,
      which is the change in equity from transactions and other events during a period
      from non-owner sources. Other comprehensive income refers to items recognized
      in
      comprehensive income that are excluded from net income calculated in accordance
      with GAAP. The adoption of Section 1530 did not have a material effect on the
      Company’s financial position and results of operations for the fiscal years
      ended December 31, 2007, 2006 and 2005.





Section
      3861 establishes standards for presentation of financial instruments and
      non-financial derivatives, and specifies the information that should be
      disclosed about them. Section 3865 describes when and how hedge accounting
      can
      be applied as well as the disclosure requirements. Hedge accounting enables
      the
      recording of gains, losses, revenues and expenses from derivative financial
      instruments in the same periods as those related to the hedged items. The
      adoption of Sections 3861, 3865 and 3251 did not have a material effect on
      the
      Company’s financial position and results of operations for the fiscal years
      ended December 31, 2007, 2006 and 2005.




Page
                  10




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)








**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***New
      Accounting Pronouncements*** (continued)





Section
      3855 defines the terms ‘financial instrument,’ ‘financial asset’ and ‘financial
      liability.’ Under Section 3855, financial assets must be classified into one of
      four categories: held-for-trading, held to-maturity, loans and receivables
      and
      available-for-sale; financial liabilities must be classified into one of two
      categories: held-for-trading and other financial liabilities. (Capital lease
      receivables and obligations do not meet the scope of Section 3855, except for
      the Section’s derecognition and impairment standards.) All derivative
      instruments, including those that are embedded in, but not closely related
      to,
      another contract must be classified as held-for-trading. All financial
      instruments, including derivatives, are measured at fair value except for loans
      and receivables, held-to-maturity investments and other financial liabilities,
      which are measured at amortized cost, using the effective interest method where
      applicable. Subsequent measurement and changes in fair value will depend on
      their initial classification, as follows: held-for-trading financial assets
      are
      measured at fair value and changes in fair value are recognized in net income;
      available-for-sale financial instruments are measured at fair value with changes
      in fair value recorded in other comprehensive income until the investment is
      derecognized or impaired at which time the amounts would be recorded in net
      earnings. Under the adoption of these new standards, the Company designated
      restricted cash as held-for-trading, which is measured at fair value. Accounts
      receivable are classified as loans and receivables, which are measured at
      amortized cost. Accounts payable and accrued liabilities, advances payable,
      derivative liability and convertible debentures are classified as other
      financial liabilities, which are measured at amortized cost.





The
      adoption of these standards resulted in the decrease of $507,814 in the fair
      value of various convertible debt instruments on December 1, 2006 and a
      corresponding decrease in the deficit of the Company. This decrease in the
      fair
      value of the convertible debt will result in increased accretion charges in
      future periods such that the fair value of the debt will equal its face value
      at
      maturity.




(ii)
            Non-Monetary
                Transactions:





Effective
      January 1, 2006, the Company adopted CICA Handbook Section 3831, *Non-monetary
      Transactions* (‘Section 3831’). This standard requires all non-monetary transactions to be
      measured at fair value unless they meet one of four very specific criteria.
      Commercial substance replaces culmination of the earnings process as the test
      for fair value measurement. A transaction has commercial substance if it causes
      an identifiable and measurable change in the economic circumstances of the
      entity. Commercial substance is a function of the cash flows expected by the
      reporting entity. The adoption of this standard did not have a material effect
      on the Company's financial position and results of operations for the fiscal
      years ended December 31, 2007, 2006 and 2005.





(iii)
            Cash
                Flow Statements:





In
      March
      2007, the CICA amended Handbook Section 1540, *Cash
      Flow Statements* (‘Section 1540’). Paragraph 1540.55 was amended such that cash distributions on
      financial instruments classified as equity, and the distributions are determined
      in accordance with a contractual agreement or relevant constating documents,
      now
      require disclosure of the extent to which cash distributions are
      nondiscretionary. The adoption of this amended standard did not have a material
      effect on the Company's financial position and results of operations for the
      fiscal years ended December 31, 2007, 2006 and 2005.




Page
                  11




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)








**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***New
      Accounting Pronouncements*** (continued)





(iv)
            General
                Standards of Financial Statement
                Presentation:





In
                June 2007, the CICA added paragraphs to Handbook Section 1400,*General
                Standards of Financial Statement Presentation*(‘Section
                1400’) to include new requirements regarding an entity’s ability to
                continue as a going concern. The additions to Section 1400 apply
                to
                interim and annual financial statements relating to fiscal years
                beginning
                on or after January 1, 2008. Earlier adoption is encouraged. The
                adoption
                of this standard did not have a material effect on the Company's
                financial
                position and results of operations for the fiscal years ended December
                31,
                2007, 2006 and 2005.





(v)
            Inventories





In
      June
      2007, the CICA issued Handbook Section 3031 *Inventories* (‘Section 3031’). This section supersedes CICA Handbook Section 3030 *Inventories* ,
      and is
      based on International Financial Reporting Standard IAS 2, ‘Inventories.’ The
      Section prescribes the accounting treatment for inventories and applies to
      interim and annual financial statements relating to fiscal years beginning
      on or
      after January 1, 2008. Earlier adoption is encouraged. The Company is currently
      evaluating the impact of this standard on its financial position, results of
      operations and cash flows. The Company does not anticipate that the application
      of Section 3031 will have a material impact on its financial position and
      results of operations.





(vi)
            Financial
                instruments **–** disclosures and
                presentation:





In
      December 2006, the CICA issued Handbook Section 3862, *Financial
      Instruments***–***Disclosures* ,
      and
      Section 3863, *Financial
      Instruments***–***Presentation* .
      These
      two new sections replace Section 3861, *Financial
      Instruments - Disclosure and Presentation* ,
      which
      was adopted by the Company in fiscal 2007. Section 3862 includes a complete
      set
      of disclosure requirements for financial instruments that revise and enhance
      the
      disclosure requirements in Section 3861. Section 3863 contains the standards
      for
      presentation of financial instruments and non-financial derivatives and is
      essentially consistent with the presentation requirements currently found in
      Section 3861. These two new sections apply to interim and annual financial
      statements relating to fiscal years beginning on or after October 1, 2007.
      The
      adoption of these standards did not have a material effect on the Company’s
      consolidated financial position or results of operations for the fiscal period
      ended February 29, 2008.





(vii)
            Capital
                disclosures:





In
      December 2006, the CICA issued Handbook Section 1535, *Capital
      Disclosures* (‘Section 1535’). This new guidance establishes standards for disclosing
      information about an entity’s capital and how it is managed. This section
      requires the disclosure of an entity’s objectives, policies and processes for
      managing capital and information regarding an entity’s compliance or
      non-compliance with any capital requirements. Section 1535 applies to interim
      and annual financial statements relating to fiscal years beginning on or after
      October 1, 2007. This standard affects disclosure only.




Page
                  12




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)







**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***New
      Accounting Pronouncements*** (continued)





(viii)
            Goodwill
                and intangible assets:





In
      January 2008, the CICA issued Handbook section 3064, *Goodwill
      and Intangible Assets* ,
      which
      will replace Section 3062, *Goodwill
      and Other Intangible Assets.* The
      standard provides guidance on the recognition of intangible assets in accordance
      with the definition of an asset and the criteria for asset recognition as well
      as clarifying the application of the concept of matching revenues and expenses,
      whether these assets are separately acquired or internally developed. This
      standard will apply to the Company’s interim and annual financial statements
      beginning January 1, 2009. The Company has not yet determined what the impact
      of
      adopting this standard will have on the Company’s consolidated financial
      statements.





**United
      States generally accepted accounting principles**




In
      June
      2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of
      FASB
      Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty
      in
      tax positions. This Interpretation requires that we recognize in our financial
      statements the benefit of a tax position if that position is more likely than
      not of being sustained on audit, based on the technical merits of the position.
      The provisions of FIN 48 become effective as of the beginning of the Company’s
      2008 fiscal year, with the cumulative effect of the change in accounting
      principle recorded as an adjustment to opening retained earnings. The Company
      is
      currently evaluating the impact that FIN 48 will have on its financial
      statements.




In
      September 2006, the FASB issued Statement No. 157, "Fair Value Measurements"
      (FAS 157), which defines fair value, establishes a framework for measuring
      fair
      value, and expands disclosures about fair value measurements. The provisions
      of
      FAS 157 become effective as of the beginning of the Company’s 2008 fiscal year.
      The Company is currently evaluating the impact that FAS 157 will have on its
      financial statements.




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements" (SAB 108),
      which
      addresses how to quantify the effect of financial statement errors. The
      provisions of SAB 108 become effective as of the end of the Company’s 2007
      fiscal year. The adoption of SAB 108 did not have a material effect on the
      Company's reported financial position or results of operations.




In
      February 2007, the FASB issued Statement No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities, including an amendment of FASB
      Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure
      many financial instruments and certain other items at fair value that are not
      currently required to be measured at fair value and establishes presentation
      and
      disclosure requirements designed to facilitate comparisons between companies
      that choose different measurement attributes for similar types of assets and
      liabilities. The provisions of FAS 159 become effective as of the beginning
      of
      the Company’s 2009 fiscal year. The Company is currently evaluating the impact
      that FAS 159 will have on its financial statements.




Page
                  13




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)







**2.**
            **SIGNIFICANT
                ACCOUNTING POLICIES**(continued)





***New
      Accounting Pronouncements*** (continued)





In
      December 2007, the FASB issued SFAS No. 141(R), *Business
      Combinations* (“SFAS
      No. 141R”), replacing SFAS No. 141, *Business
      Combinations* (“SFAS
      No. 141”).  This Statement retains the fundamental requirements in
      Statement 141 that the acquisition method of accounting (which Statement 141
      called the *purchase
      method* )
      be used
      for all business combinations and for an acquirer to be identified for each
      business combination.  This Statement also establishes principles and
      requirements for how the acquirer: a) recognizes and measures in its financial
      statements the identifiable assets acquired, the liabilities assumed, and any
      noncontrolling interest in the acquiree; b) recognizes and measures the goodwill
      acquired in the business combination or a gain from a bargain purchase and
      c)
      determines what information to disclose to enable users of the financial
      statements to evaluate the nature and financial effects of the business
      combination.  This Statement clarifies that acquirers will be required to
      expense costs related to any acquisitions.  SFAS No. 141(R) will apply
      prospectively to business combinations for which the acquisition date is on
      or
      after fiscal years beginning December 15, 2008.  Early adoption is
      prohibited.  The Company has not yet evaluated the impact, if any, that
      SFAS No. 141(R) will have on its financial statements.  Determination
      of the ultimate effect of this pronouncement will depend on the Company’s
      structure at the date of adoption.





In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements — An Amendment of ARB
      No. 51* (“SFAS
      No. 160”).  SFAS No. 160 establishes new accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary.  Specifically, this statement requires the
      recognition of a noncontrolling interest (minority interest) as equity in the
      consolidated financial statements and separate from the parent’s equity.
 The amount of net income attributable to the noncontrolling interest will
      be included in consolidated net income on the face of the income statement.
       SFAS No. 160 clarifies that changes in a parent’s ownership interest in a
      subsidiary that do not result in deconsolidation are equity transactions if
      the
      parent retains its controlling financial interest.  In addition, this
      statement requires that a parent recognize a gain or loss in net income when
      a
      subsidiary is deconsolidated.  Such gain or loss will be measured using the
      fair value of the noncontrolling equity investment on the deconsolidation date.
       SFAS No. 160 also includes expanded disclosure requirements regarding the
      interests of the parent and its noncontrolling interest.  SFAS No. 160 is
      effective for fiscal years beginning on or after December 15, 2008, with
      retrospective presentation and disclosure for all periods presented.  Early
      adoption is prohibited.  The Company currently has no entities or
      arrangements that will be affected by the adoption of SFAS No. 160.
 However, determination of the ultimate effect of this pronouncement will
      depend on the Company’s structure at the date of adoption.




Page
                  14




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)









**3.**
            **PROPERTY,
                PLANT AND EQUIPMENT**




**2006****Accumulated**
            
            **Net****Cost**
            
            **Amortization**
            
            **Book
                Value****Property,
                Plant and Equipment**Land
            
            $
            128,940
            
            $
            —
            
            $
            128,940Building
            
            
            243,376
            
            
            13,700
            
            
            229,676Machinery
                and equipment
            
            
            290,531
            
            
            94,206
            
            
            196,325Furniture
                and fixtures
            
            
            38,198
            
            
            13,029
            
            
            25,169Leasehold
                improvements
            
            
            10,939
            
            
            10,939
            
            
            —$
            711,984
            
            $
            131,874
            
            $
            580,110





All
      of
      the Company’s property, plant and equipment were sold in 2007. (See Note
      1)





**4.**
            **RELATED
                PARTY TRANSACTIONS AND BALANCES******





**(a)**
            **Amounts
                owing to Directors and
                Officers**





As
      at
      December 31, accounts payables and accrued liabilities included amounts owing
      to
      the following persons and companies. These amounts arose from transactions
      listed in note 4 (b).




**Position**
            
            ******2007**
            
            ******2006**Anthony
                Durkacz (“AD”)
            
            
            Director
                and Officer
            
            $
            —
            
            $
            2,141Arthur
                Laudenslager
            
            
            Director
            
            
            —
            
            
            2,397Brian
                Clewes
            
            
            Director
            
            
            25,000
            
            
            2,000Chris
                Besant
            
            
            Director
            
            
            25,000
            
            
            —Fortius
                  Research and Trading
            
            
            Controlled
                by AD
            
            
            —
            
            
            5,300Jiri
                Nor (“JN”)
            
            
            Director
                & Officer
            
            
            —
            
            
            3,011Liikfam
                Holdings Inc.
            
            
            Controlled
                by ML
            
            
            —
            
            
            26,500Macnor
                Corp.
            
            
            Controlled
                by JN
            
            
            —
            
            
            21,333Michael
                Liik (“ML”)
            
            
            Director
            
            
            —
            
            
            2,000Peter
                Nor
            
            
            Officer
            
            
            —
            
            
            1,971$
            50,000
            
            $
            66,653




Page
                  15




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**4.**
            **RELATED
                PARTY TRANSACTIONS AND
                BALANCES******(continued)





**(b)**
            **Directors
                and Officers**





During
      the years ended December 31, the Company incurred the following consulting
      expenses with its directors and officers:





**Position**
            
            **2007**
            
            **2006**
            
            ******2005**Gary
                Brandt
            
            
            Director
            
            $
            —
            
            $
            4,000
            
            $
            8,698Brian
                Clewes (“BC”)
            
            
            Director
            
            
            49,005
            
            
            6,000
            
            
            25,465Anthony
                Durkacz (“AD”)
            
            
            Director
                and Officer
            
            
            9,059
            
            
            6,000
            
            
            10,000Fortius
                  Research and Trading
            
            
            Controlled
                by AD
            
            
            48,733
            
            
            92,725
            
            
            112,500Arthur
                Laudenslager
            
            
            Director
            
            
            46,122
            
            
            6,100
            
            
            19,768397230
                Ontario Inc
            
            
            Controlled
                by BC
            
            
            40,000
            
            
            —
            
            
            —Chris
                Besant
            
            
            Director
            
            
            11,417
            
            
            —
            
            
            —Howard
                Drabinsky (“HD”)
            
            
            Director
            
            
            1,000
            
            
            —
            
            
            —Lang
                Michener
            
            
            For
                HD
            
            
            10,417
            
            
            —
            
            
            —Rich
                Callandar (“RC)
            
            
            Director
            
            
            1,000
            
            
            —
            
            
            —Stirling
                Partners
            
            
            Controlled
                by RC
            
            
            10,417
            
            
            —
            
            
            —Liikfam
                Holdings Inc.
            
            
            Controlled
                by ML
            
            
            118,750
            
            
            100,000
            
            
            118,750Macnor
                Corp. re Jiri Nor (i)
            
            
            Controlled
                by JN
            
            
            93,330
            
            
            149,997
            
            
            315,998Macnor
                Corp. re Peter Nor (i)
            
            
            Controlled
                by JN
            
            
            56,000
            
            
            98,000
            
            
            120,000Michael
                Liik (“ML”)
            
            
            Director
            
            
            36,941
            
            
            6,000
            
            
            14,511Jiri
                Nor (“JN”)
            
            
            Director
                and Officer
            
            
            9,059
            
            
            6,000
            
            
            10,000David
                Ramm
            
            
            Director
            
            
            —
            
            
            2,000
            
            
            10,000$
            541,250
            
            $
            476,822
            
            $
            765,690





These
      transactions were in the normal course of operations and are measured at the
      exchange amount, which is the amount of consideration established and agreed
      to
      by the related parties.




(i)
      Jiri
      Nor and Peter Nor provided services on behalf of Macnor Corp.
      respectively.




Page
                  16




*Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      dollars)








**5.**
            **INCOME
                TAXES**





The
                Company has non-capital tax losses carried forward of approximately
                $8,975,000. If unused, these tax losses will expire approximately
                as
                follows:





2010
            
            
            1,228,0002014
            
            
            2,882,0002015
            
            
            3,030,0002026
            
            
            1,835,000




In
                addition, the Company has non-deductible scientific research and
                development expenditures amounting to approximately $2,120,000 which
                have
                no expiry.





Investment
                tax credits recorded during the year as a reduction of expenses aggregated
                to $388,886 (2006 - $177,715) (2005 -
                $420,920).





The
      tax
      effect of significant temporary differences is as follows:





**2007**
            
            **2006**
            
            **2005**Net
                income (loss) before income taxes
            
            $
            1,995,088
            
            $
            (2,120,422
            )
            $
            (5,330,864
            )Statutory
                income tax rate
            
            
            36.12%
            
            
            36.12%
            
            
            36.12%Income
                tax recovery at statutory rate
            
            
            720,626
            
            
            (765,896
            )
            
            (1,925,508
            )Non-taxable
                gain
            
            
            (813,229
            )
            
            (393,543
            )
            
            —Non-deductible
                expenses
            
            
            566,160
            
            
            779,530
            
            
            138,919Application
                of non-capital losses applied
            
            
            (473,533
            )
            
            —
            
            
            —Change
                in valuation allowance
            
            
            (24
            )
            
            379,909
            
            
            1,786,589Income
                tax expense
            
            $
            —
            
            $
            —
            
            $
            —





The
      components of the Company’s net future income tax assets are as
      follows:





**2007**
            
            **2006**
            
            **2005**Statutory
                income tax rate
            
            
            33.5%
            
            
            36.12%
            
            
            36.12%Non-capital
                losses
            
            $
            3,006,600
            
            $
            3,432,484
            
            $
            3,018,548Scientific
                  research and development expense ($2,120,000)
            
            
            710,200
            
            
            635,351
            
            
            614,639Valuation
                allowance
            
            
            (3,716,800
            )
            
            (4,067,835
            )
            
            (3,633,187
            )Net
                future income tax asset
            
            $
            —
            
            $
            —
            
            $
            —




Page
                  17




*Table
            of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED
                SURPLUS**





**a)**
            **Share
                capital**





Share
      capital comprises the following:





**Authorized**


Unlimited
      common shares


10,000,000
      preferred shares





**Issued
      and outstanding**





At
      December 31, 2007, 50,789,682 common shares were issued and outstanding. See
      note 10.





The
      weighted average number of common shares outstanding during 2007 was 52,008,940
      (2006 - 42,561,626; 2005 - 33,656,293). The weighted average number of fully
      diluted common shares outstanding during 2007 was 90,531,825. The income effect
      of the potential dilution was $2,813,300. No effect has been given to the
      potential exercise of stock options and warrants in the calculation of diluted
      net income (loss) per share for the 2006 and 2005 fiscal years as the effect
      would have been anti-dilutive. These figures are used for purposes of
      calculating the net income (loss) per share.




No
      preferred shares have been issued.




Page
                  18




*Table
          of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)




**b)**
            **Common
                stock issued to settle obligations of the Company to directors, officers
                and former directors of the
                Company.**





In
      2006,
      the Company issued 2,616,310 shares of common stock to settle obligations owing
      by the Company to certain directors and/or officers of the Company and/or to
      companies owned by them.




**Name**
              
              **Date**
              
              **$**
              
              **Number**
              
              **Obligation
                  Settled**Macnor
                  Corp.
              
              
              January
                  18, 2006
              
              
              106,000
              
              
              651,138
              
              Professional
                servicesJuly
                  26, 2006
              
              
              4,000
              
              
              35,048
              
              director
                feesOctober
                  25, 2006
              
              
              16,000
              
              
              203,189
              
              and
                reimbursements**Total**
              
              
              **126,000**
              
              
              **889,375**David
                  Ramm
              
              
              January
                  18, 2006
              
              
              10,000
              
              
              61,428
              
              Director
                fees andJuly
                  26, 2006
              
              
              2,000
              
              
              17,524
              
              reimbursements**Total**
              
              
              **12,000**
              
              
              **78,952**Fortius
                  Research and
              
              
              January
                  18, 2006
              
              
              10,000
              
              
              61,428
              
              Financial
                consulting,Trading
              
              
              July
                  26, 2006
              
              
              4,000
              
              
              35,048
              
              director
                and expenseMay
                  18, 2006
              
              
              37,500
              
              
              178,291
              
              recovery**Total**
              
              
              **51,500**
              
              
              **274,767**A.
                  Laudenslager
              
              
              July
                  26, 2006
              
              
              4,000
              
              
              35,048
              
              Director
                fees andJanuary
                  18, 2006
              
              
              590
              
              
              3,630
              
              reimbursementsJanuary
                  18, 2006
              
              
              19,768
              
              
              121,428**Total**
              
              
              **24,358**
              
              
              **160,106**Brian
                  Clewes
              
              
              January
                  18, 2006
              
              
              25,465
              
              
              156,428
              
              Director
                fees andJuly
                  26, 2006
              
              
              4,000
              
              
              35,048
              
              reimbursements**Total**
              
              
              **29,465**
              
              
              **191,476**Gary
                  Brandt
              
              
              January
                  18, 2006
              
              
              8,698
              
              
              53,428
              
              Director
                fees andJuly
                  26, 2006
              
              
              4,000
              
              
              35,048
              
              reimbursements**Total**
              
              
              **12,698**
              
              
              **88,476**
 Liikfam
                      Holdings Inc.
                  
                  
                  January
                      18, 2006
                  
                  
                  39,512
                  
                  
                  242,712
                  
                  Financial
                    consulting,May
                      18, 2006
                  
                  
                  25,000
                  
                  
                  118,861
                  
                  director
                    fees andJuly
                      26, 2006
                  
                  
                  29,000
                  
                  
                  254,096
                  
                  reimbursementsOctober
                      25, 2006
                  
                  
                  25,000
                  
                  
                  317,489**Total**
                  
                  
                  **118,512**
                  
                  
                  **933,158****374,533**
                  
                  
                  **2,616,310**
 Page
                      19
  
 
 *Table
            of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





In
      2007,
      the Company issued 1,838,732 shares of common stock to settle obligations owing
      by the Company to certain directors and/or officers of the Company and/or to
      companies owned by them.





**Name**
            
            **Date**
            
            **$**
            
            **Number**
            
            **Obligation
                Settled**Liikfam
                Holdings Inc.
            
            
            March
                16, 2007
            
            
            41,667
            
            
            505,982
            
            Director
              feesJiri
                Nor
            
            
            March
                16, 2007
            
            
            5,059
            
            
            61,431
            
            Director
              feesArthur
                Laudenslager
            
            
            March
                16, 2007
            
            
            32,103
            
            
            389,845
            
            Director
              feesMichael
                Liik
            
            
            March
                16, 2007
            
            
            32,941
            
            
            400,021
            
            Director
              feesBrian
                Clewes
            
            
            March
                16, 2007
            
            
            34,586
            
            
            420,021
            
            Director
              feesAnthony
                Durkacz
            
            
            March
                16, 2007
            
            
            5,059
            
            
            61,432
            
            Director
              fees151,415
            
            
            1,838,732





**c)**
            **Contributed
                surplus**


See
      note
      10.




Page
                  20




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**d)**
            **Common
                stock issued for cash**





i)
      Pursuant to a subscription agreement dated March 3, 2004 with an accredited
      investor, as defined under the laws of the province of Alberta, the Company
      issued a private placement of 651,450 units, comprising one common share and
      one
      common share purchase warrant each, for an aggregate purchase price of $CDN
      390,870. The common share purchase warrants are exercisable up to March 4,
      2007,
      each entitling the holder to purchase one common share at $1.00 (U.S.) per
      share. Each warrant entitles the holder to purchase one common
      share.





ii)
      Pursuant to a subscription agreement dated March 26, 2004 with an accredited
      investor, as defined under the laws of the province of Ontario, the Company
      issued a private placement of 236,035 units, comprising one common share and
      one
      common share purchase warrant each, for an aggregate purchase price of $CDN
      138,080. The common share purchase warrants are exercisable up to March 27,
      2007, each entitling the holder to purchase one common share at $0.50 (U.S.)
      per
      share.





iii)
      Pursuant to a subscription agreement dated March 31, 2004 with an accredited
      investor, as defined under the laws of the province of Alberta, the Company
      issued a private placement of 104,500 units, comprising one common share and
      two
      common share purchase warrants each, for an aggregate purchase price of $CDN
      61,100.  The first tranche of common share purchase warrants was
      exercisable up to October 1, 2005, at $0.80 (U.S.) per share. The second tranche
      of common share purchase warrants are exercisable up to April 1, 2007 at $1.00
      (U.S.) per share. Each warrant entitles the holder to purchase one common
      share.





iv)
      Pursuant to a subscription agreement dated June 3, 2004 with an accredited
      investor, as defined under the laws of the province of Alberta, the Company
      issued a private placement 79,630 units, comprising one common share and one
      common share purchase warrant each, for an aggregate purchase price of $CDN
      43,000.  The common share purchase warrants are exercisable up to June 30,
      2007 each entitling the holder to purchase one common share at $0.80 (U.S.)
      per
      share.




v)
      Pursuant to subscription agreements dated July 26 - 28, 2004 with certain
      accredited investors, as defined under the laws of the province of Alberta,
      Canada and the United States of America, the Company issued a private placement
      1,694,167 units comprised of one common share and one common share purchase
      warrant each, for an aggregate purchase price of $CDN 660,725. The common share
      purchase warrants were exercisable up to December 31, 2005, each entitling
      the
      holder to purchase one common share at $0.50 (U.S.) per share.





vi)
      Pursuant to a subscription agreement dated October 1, 2004, with a U.S. company,
      the Company issued a private placement 88,900 units, comprising one common
      share
      and one common share purchase warrant each, for an aggregate purchase price
      of
      $CDN 52,000.  The common share purchase warrants are exercisable up to
      September 30, 2007 each entitling the holder to purchase one common share at
      $0.90 (U.S.) per share.




Page
                  21




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**d)**
            **Common
                stock issued for cash**(continued)





vii)
      Pursuant to subscription agreement dated October 8, 2004 with an accredited
      investor, as defined under the laws of the province of Ontario, Canada, the
      Company issued a private placement 20,000 units comprising one common share
      and
      one common share purchase warrant each, for an aggregate purchase price of
      $CDN
      11,500.  The common share purchase warrants are exercisable up to October
      8, 2007, each entitling the holder to purchase one common share at $0.90 (U.S.)
      per share.





viii)
      Pursuant to a subscription agreement dated December 3, 2004 with a U.S. company,
      the Company issued a private placement 166,700 units, comprising one common
      share and one common share purchase warrant each, for an aggregate purchase
      price of $CDN 62,500.  The common share purchase warrants are exercisable
      up to December 3, 2007 each entitling the holder to purchase one common share
      at
      $0.60 (U.S.) per share.




During
      2007 and 2006, there were no shares issued for cash.




Page
                  22




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**e)**
              **Stock
                  option plan**





The
      Company has stock option plans for its employees and consultants who are
      regarded as integral to the progress of the Company and its operations. Options
      are normally issued as a bonus on employment or are tied into performance
      related compensation. Performance related compensation includes completion
      of
      research and development projects within specific timeframes and budgets,
      achieving financial targets on behalf of the Company or
      introduction/referral/completion of business agreements or arrangements. In
      general, the minimum vesting requirement of options issued is one year. The
      maximum term of options is five years from the grant date. Normally, the
      exercise price of the option is determined using the five-day closing average
      of
      the shares prior to the grant date.





On
      October 22, 2004, the Board of Directors passed a resolution authorizing an
      amendment increasing the maximum number of common shares for issuance under
      the
      Company’s Stock Option Plan to 5,100,000 shares.





On
      October 12, 2005, the Board of Directors received approval from shareholders
      at
      the Company’s Annual General Meeting to increase the common shares available for
      the Company’s Stock Option Plan by 2,000,000 shares.





On
      September 6, 2007, in conjunction with the sale of the assets of the Company
      (see Note 1), the Board of Directors approved the cancellation of all share
      purchase options that were outstanding at that date. At that same meeting,
      the
      Board of Directors approved the granting of new share purchase options as
      follows:





**(i)
      Stock options granted**





The
      Company issued 7,121,758 **Incentive
      Options** to six
      directors under the following terms: Exercise price US $0.027; expiring
      September 6, 2012; vesting subject to successful completion of the reverse
      takeover transaction as described in Note 14.





The
      Company issued 1,500,000 **Settlement
      Options** to
      former
      directors and officers under the following terms: Exercise price US $0.021;
      expiring August 1, 2012; vesting immediately.





The
      Company issued 508,697 **Finders’
      Fee Options** to a
      consultant and to a director for introducing the Company to Colorep, Inc. under
      the following terms: Exercise price US $0.027; expiring November 23, 2012;
      vesting subject to successful completion of the reverse takeover transaction
      as
      described in Note 14.




Page
                  23




*Table
          of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**e)**
            **Stock
                option plan (continued)**





**(ii)
      Stock options exercised**





No
      stock
      options were exercised during the 2007 or 2006 fiscal year.





( **iii)
      Stock option valuation**





Stock
      options issued are valued using the Black-Scholes option pricing model with
      the
      following assumptions: risk free interest rate of 4.30%; expected life of 5
      years; expected volatility of 142%; dividend yield of 0% (2006 - 3.60% - 3.82%;
      1 - 5 years; 96% - 112%; 0%, respectively).




**(iv)
      Summary table**


**Weighted****Average****Options for**
            
            **Exercise****Common Shares**
            
            **Price U.S.$**Balance,
                December 31, 2005
            
            
            4,043,840
            
            
            0.25Options
                granted
            
            
            50,000
            
            
            0.14Options
                exercised
            
            
            —
            
            
            —Options
                expired
            
            
            (275,000
            )
            
            0.36Balance,
                December 31, 2006
            
            
            3,818,840
            
            
            0.24Options
                granted
            
            
            9,130,455
            
            
            0.0256Options
                exercised
            
            
            —
            
            
            —Options
                cancelled
            
            
            (3,818,840
            )
            
            (0.24
            )Balance,
                December 31, 2007
            
            
            9,130,455
            
            
            0.0256




Page
                  24




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**(v)
      Weighted average remaining contractual life**





The
      following table summarizes information about the Company’s stock options
      outstanding as at December 31, 2007:





**Number**
            
            **Weighted**
            
            **Number****Exercise**
            
            **Outstanding
                at**
            
            **Average**
            
            **Exercisable
                at****Price**
            
            **December
                31,**
            
            **Remaining**
            
            **December
                31,****US$**
            
            **2007**
            
            **Life
                in Years**
            
            **2007**0.021 –
                0.027
            
            
            9,130,455
            
            
            4.68
            
            
            2,008,697




Page
                  25




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**6.**
            **SHARE
                CAPITAL AND CONTRIBUTED SURPLUS**(continued)





**f)**
            **Common
                share purchase warrants**





The
      following table illustrates the continuity of the Company’s warrants during 2007
      (no warrants were issued in 2007):




**Recipient**
            
            **Issue date**
            
            **Expiry date**
            
            **Number**
            
            **Exercise**
              **price US$**
            
            **Expired**
              **during the**
              **year**
            
            **Numberoutstanding****atDecember 31,****2007**Shelley
                Blechman
            
            
            17-Jul-02
            
            
            17-Jul-07
            
            
            100,000
            
            
            0.50
            
            
            100,000661399
                Ontario Inc.
            
            
            1-Nov-02
            
            
            1-Nov-07
            
            
            50,000
            
            
            0.50
            
            
            50,000661399
                Ontario Inc.
            
            
            30-Nov-02
            
            
            30-Nov-07
            
            
            450,000
            
            
            0.50
            
            
            450,000Belcor
                Development Corp
            
            
            1-Oct-04
            
            
            30-Sep-07
            
            
            88,900
            
            
            0.90
            
            
            88,900Belcor
                Development Trust
            
            
            1-Oct-04
            
            
            30-Sep-07
            
            
            88,900
            
            
            0.90
            
            
            88,900Philip
                Patterson
            
            
            8-Oct-04
            
            
            30-Sep-07
            
            
            20,000
            
            
            0.90
            
            
            20,000Belcor
                Development Corp.
            
            
            3-Dec-04
            
            
            3-Dec-07
            
            
            166,700
            
            
            0.60
            
            
            166,700Liikfam
                Holdings Inc.
            
            
            9-Dec-04
            
            
            9-Dec-07
            
            
            500,000
            
            
            0.37
            
            
            500,000Macnor
                Corp
            
            
            27-Jan-05
            
            
            27-Jan-08
            
            
            2,000,000
            
            
            0.75
            
            
            
            
            
            2,000,000Macnor
                Corp
            
            
            27-Jan-05
            
            
            27-Jan-08
            
            
            2,000,000
            
            
            0.92
            
            
            
            
            
            2,000,000Macnor
                Corp
            
            
            27-Jan-05
            
            
            27-Jan-08
            
            
            1,000,000
            
            
            1.08
            
            
            
            
            
            1,000,000New
                Century Capital
            
            
            2-Aug-05
            
            
            2-Aug-07
            
            
            1,000,000
            
            
            0.25
            
            
            1,000,000Bina
                Consulting
            
            
            8-Aug-05
            
            
            8-Aug-07
            
            
            800,000
            
            
            0.36
            
            
            800,000Elliot
                Goldstein
            
            
            8-Aug-05
            
            
            8-Aug-07
            
            
            200,000
            
            
            0.36
            
            
            200,000Matthew
                Chipman
            
            
            15-Mar-06
            
            
            15-Mar-09
            
            
            500,000
            
            
            0.19
            
            
            
            
            
            500,000Michael
                Sheppard
            
            
            15-Mar-06
            
            
            15-Mar-09
            
            
            500,000
            
            
            0.19
            
            
            
            
            
            500,000Belcor
                Development Trust
            
            
            24-Mar-06
            
            
            22-Mar-09
            
            
            88,900
            
            
            0.19
            
            
            
            
            
            88,900Belcor
                Development Corp.
            
            
            24-Mar-06
            
            
            22-Mar-09
            
            
            255,600
            
            
            0.19
            
            
            
            
            
            255,600Alternate
                Energy Corporation
            
            
            22-May-06
            
            
            12-Apr-09
            
            
            1,500,000
            
            
            0.19
            
            
            
            
            
            1,500,000Ardour
                Capital Investments
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            185,000
            
            
            0.27
            
            
            
            
            
            185,000Cornell
                Capital Partners
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            1,600,000
            
            
            0.19
            
            
            
            
            
            1,600,000Cornell
                Capital Partners
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            600,000
            
            
            0.20
            
            
            
            
            
            600,000Cornell
                Capital Partners
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            1,000,000
            
            
            0.30
            
            
            
            
            
            1,000,000Acme
                Global Inc.
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            366,700
            
            
            0.19
            
            
            
            
            
            366,700Old
                Debenture Holders
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            19,300
            
            
            0.19
            
            
            
            
            
            19,300Acme
                Global Inc.
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            141,132
            
            
            0.20
            
            
            
            
            
            141,132Old
                Debenture Holders
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            5,428
            
            
            0.20
            
            
            
            
            
            5,428Acme
                Global Inc.
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            229,187
            
            
            0.30
            
            
            
            
            
            229,187Old
                Debenture Holders
            
            
            10-Apr-06
            
            
            9-Apr-09
            
            
            12,063
            
            
            0.30
            
            
            
            
            
            12,063**12,003,310**




Page
                  26




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**7.**
            **CONSOLIDATED
                STATEMENTS OF CASH
                FLOW**




a)
            The
                net change in non-cash operating working capital balances related
                to
                operations comprises the following:





**2007**
            
            **2006**
            
            **2005**Decrease
                (increase) in accounts receivables
            
            $
            (36,706
            )
            $
            110,520
            
            $
            (91,752
            )Decrease
                (increase in prepaid expenses
            
            
            (28,851
            )
            
            70,142
            
            
            (131,651
            )Decrease
                in investment tax credits
            
            
            —
            
            
            —
            
            
            199,586Decrease
                (increase) in inventory
            
            
            15,026
            
            
            (18,470
            )
            
            (10,594
            )Increase
                (decrease) in accounts payables and accrued liabilities
            
            
            99,786
            
            
            (347,248
            )
            
            483,288Increase
                (decrease) in deferred revenue
            
            
            (10,628
            )
            
            (7,228
            )
            
            17,856$
            38,627
            
            $
            (192,284
            )
            $
            466,733





b)
            Supplementary
                financial information:





**2007**
            
            **2006**
            
            **2005**Common
                shares issued to purchase Astris s.r.o.
            
            $
            —
            
            $
            —
            
            $
            1,955,000Warrants
                issued to purchase Astris s.r.o.
            
            
            —
            
            
            —
            
            
            254,000Common
                shares and contributed surplus issued to pay down director
                liability
            
            
            —
            
            
            —
            
            
            100,000Capital
                lease obligations entered into upon acquisition of property and
                equipment
            
            
            —
            
            
            47,111
            
            
            —Transfer
                of capital lease obligations and corresponding property, plant and
                equipment upon sale (note 1)
            
            
            32,273
            
            
            —
            
            
            —Conversion
                of convertible debenture (note 10)
            
            
            29,568
            
            
            723,980
            
            
            —Conversion
                of advances payable (note 10)
            
            
            384,024
            
            
            —
            
            
            —Increase
                in contributed surplus upon redemption of shares (note 10)
            
            
            813,804
            
            
            —
            
            
            —




Page
                  27




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**8.**
            **SEGMENTED
                FINANCIAL INFORMATION**





The
      Company was engaged in the design, development, manufacturing and sale of
      alkaline fuel cells, alkaline fuel cell systems, fuel cell and battery test
      loads and provides engineering and other services.  Fewer than 50% of the
      Company’s long-term assets were located in the Czech Republic.  Revenue was
      derived primarily from the sale of goods and services to customers in the
      following locations and in the following amounts:





**2007**
            
            **2006**
            
            **2005**Canada
            
            $
            146
            
            $
            17,220
            
            $
            53,019Czech
                Republic
            
            
            —
            
            
            763
            
            
            10,381Rest
                of the world
            
            
            31,144
            
            
            67,932
            
            
            228,112$
            31,290
            
            $
            85,915
            
            $
            291,512





The
      Company’s segmented information by geographical location is as
      follows:





**Czech****Canada**
            
            **Republic**Assets
            
            $
            2,634,698
            
            $
            —Revenue
            
            
            31,290
            
            
            —Net
                income (loss) for the year
            
            
            2,041,878
            
            
            (46,790
            )




**9.**
            **COMPARATIVE
                FIGURES**





Comparative
      figures have been reclassified to conform to the current year’s basis of
      presentation.




Page
                  28




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**10.**
            **STATEMENT
                OF EQUITY**


**Number
                  of**
              
              **Consideration**
              
              **Contributed****Shares Issued**
              
              **Amount**
              
              **Surplus**
              
              **Deficit**
              
              **Total**Balance,
                  December 31, 2004
              
              
              26,316,551
              
              
              6,227,074
              
              
              3,016,647
              
              
              (8,990,427
              )
              
              253,294Acquisition
                  of Astris s.r.o. (note 14)
              
              
              5,000,000
              
              
              1,955,000
              
              
              254,000
              
              
              —
              
              
              2,209,000Issued
                  as payment for consulting fees to non-related parties
              
              
              4,305,927
              
              
              1,294,214
              
              
              —
              
              
              —
              
              
              1,294,214Issued
                  as payment for consulting fees to related parties
              
              
              1,884,091
              
              
              454,308
              
              
              —
              
              
              —
              
              
              454,308Issued
                  as repayment of advances from director
              
              
              125,000
              
              
              26,150
              
              
              73,850
              
              
              —
              
              
              100,000Options
                  exercised for cash
              
              
              275,000
              
              
              73,350
              
              
              —
              
              
              —
              
              
              73,350Options
                  issued to employees
              
              
              —
              
              
              —
              
              
              21,144
              
              
              —
              
              
              21,144Options
                  issued to related parties
              
              
              —
              
              
              —
              
              
              215,030
              
              
              —
              
              
              215,030Warrants
                  issued to non-related parties
              
              
              —
              
              
              —
              
              
              482,068
              
              
              —
              
              
              482,068Loss
                  for the year
              
              
              —
              
              
              —
              
              
              —
              
              
              (5,330,864
              )
              
              (5,330,864
              )Balance,
                  December 31, 2005
              
              
              37,906,569
              
              
              10,030,096
              
              
              4,062,739
              
              
              (14,321,291
              )
              
              (228,456
              )Issued
                  as payment for consulting fees to non-related parties
              
              
              2,925,115
              
              
              496,393
              
              
              —
              
              
              —
              
              
              496,393Issued
                  as payment for consulting fees to related parties
              
              
              2,616,310
              
              
              374,533
              
              
              —
              
              
              —
              
              
              374,533Options
                  issued for consulting and professional fees to non-related
                  parties
              
              
              —
              
              
              —
              
              
              5,002
              
              
              —
              
              
              5,002Warrants
                  issued to non-related parties
              
              
              —
              
              
              —
              
              
              1,115,749
              
              
              —
              
              
              1,115,749Conversion
                  of $CDN convertible debentures
              
              
              275,998
              
              
              20,740
              
              
              —
              
              
              —
              
              
              20,740Conversion
                  of $US convertible debentures
              
              
              4,407,677
              
              
              283,240
              
              
              —
              
              
              —
              
              
              283,240Loss
                  for the year
              
              
              —
              
              
              —
              
              
              —
              
              
              (2,120,422
              )
              
              (2,120,422
              )Balance,
                  December 31, 2006
              
              
              48,131,669
              
              
              11,205,002
              
              
              5,183,490
              
              
              (16,441,713
              )
              
              (53,221
              )




Page
                    29
 *Table
            of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**10.**
              **STATEMENT
                  OF EQUITY**(continued)


**Number
                of**
            
            **Consideration**
            
            **Contributed****Shares Issued**
            
            **Amount**
            
            **Surplus**
            
            **Deficit**
            
            **Total**Balance,
                December 31, 2006
            
            
            48,131,669
            
            
            11,205,002
            
            
            5,183,490
            
            
            (16,441,713
            )
            
            (53,221
            )Issued
                as payment for consultingfees
                to related parties
            
            
            1,838,732
            
            
            151,415
            
            
            —
            
            
            —
            
            
            151,415Conversion
                of $US convertible debentures
            
            
            899,281
            
            
            29,568
            
            
            
            
            
            
            
            
            29,568Conversion
                of Advance payable
            
            
            4,248,750
            
            
            384,024
            
            
            
            
            
            
            
            
            384,024Redemption
                of shares owned by dissenting shareholders
            
            
            (80,000
            )
            
            (17,083
            )
            
            12,283
            
            
            
            
            
            (4,800
            )Redemption
                of shares owned by The ACME Global Inc.
            
            
            (4,248,750
            )
            
            (907,278
            )
            
            813,804
            
            
            
            
            
            (93,474
            )Valuation
                of Settlement Options
            
            
            
            
            
            
            
            
            33,568
            
            
            
            
            
            33,568Valuation
                of Incentive Options
            
            
            
            
            
            
            
            
            99,418
            
            
            
            
            
            99,418Valuation
                of Finders Fee Options
            
            
            
            
            
            
            
            
            10,225
            
            
            
            
            
            10,225Income
                for the year
            
            
            
            
            
            
            
            
            
            
            
            1,995,088
            
            
            1,995,088Balance,
                December 31, 2007
            
            
            50,789,682
            
            
            10,845,648
            
            
            6,152,788
            
            
            (14,446,625
            )
            
            2,551,811




Page
                  30




*Table
          of Contents*


**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**11.**
            **CONVERTIBLE
                DEBENTURES**





**(a)**
            **$1,500,000
                USD Convertible Debentures**





On
                April 10, 2006, the Company entered into a Securities Purchase Agreement,
                dated as of April 10, 2006 (“Agreement”), with Cornell Capital Partners,
                LP, referred to as the “Investor”. The Agreement provides for the sale by
                the Company to the Investor of Secured Convertible Debenture (the
                “Debenture”) issued by the Company in the aggregate principal amount of
                $1,740,002 ($1,500,000 USD) (“Principal Amount”). The Principal Amount is
                to be funded by the Investor in two tranches $870,001 ($750,000 USD)
                on
                April 18, 2006, and $870,001 ($750,000 USD) to be funded, based upon
                satisfaction of the following conditions: two business days prior
                to the
                date a registration statement (the “Registration Statement”) is filed,
                pursuant to the Registration Rights Agreement with the United States
                Securities and Exchange Commission (the “SEC”). The Debenture matures
                April 9, 2009, bears interest at 10% per annum with interest payable
                in
                cash or, at the Company's option, in shares of common stock provided
                certain conditions are satisfied. Pursuant to the Agreement, the
                Investor
                also received common stock purchase warrants (the “Warrants”) to purchase
                (i) 1,000,000 shares of the Company's common stock at an exercise
                price of
                $.30 per share (ii) 600,000 shares of the Company's common stock
                at an
                exercise price of $.20 per share and (iii) 1,600,000 shares of the
                Company's common stock at an exercise price of $.19 per share.





The
                Debenture has an initial conversion price of the lesser of (i) a
                price
                equal to $.2483 (the “Fixed Conversion Price”) or (ii) ninety
                percent (90%) of the lowest daily volume weighted average price of
                the common stock of the Company during the ten trading days immediately
                preceding the conversion date (as quoted by Bloomberg, LP) per share
                and
                provides for anti-dilution protection (in certain circumstances).
                The
                Investor may not convert the Debenture or exercise the Warrants to
                the
                extent that, after giving effect to such conversion or exercise,
                as the
                case may be, the Investor would beneficially own in excess of 4.99%
                of the
                number of shares of common stock of the Company outstanding immediately
                after giving effect to such conversion or exercise, calculated in
                accordance with Section 13(d) of the Securities Exchange Act of 1934,
                as
                amended, and the rules and regulations promulgated thereunder. Such
                limitation with respect to such conversion or exercise may be waived
                by
                the Investor upon not less than 65 days prior notice to the Company.
                The
                warrants are exercisable for a period of three years. The conversion
                of
                the Debenture is subject to an effective registration statement to
                be
                filed by the Company.




Page
                  31




*Table
          of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**11.**
                **CONVERTIBLE
                    DEBENTURES**(Continued)





**(a)**
            **$1,500,000
                USD Convertible Debentures**(Continued)





The
      Company has determined the conversion feature of the Debenture represents an
      embedded derivative which would be required to be fair valued and bifurcated
      from the underlying host debt as derivative liability. The embedded derivative
      liability will be adjusted to the fair value of the underlying securities at
      the
      end of each reporting period. The recorded fair values of the derivative
      liability can fluctuate significantly based upon the fluctuations in the market
      value of the underlying securities, as well as the volatility of the stock
      price
      during the term used for observation and the term remaining for the warrants.
      The adjustment to fair value for the derivative liability will result in an
      unrealized gain or loss and recorded in the income statement as a component
      of
      the consolidated statements of operations. The estimated fair value of the
      derivative liability has been determined using the Black-Scholes option pricing
      model using the following assumptions: exercise price based upon the conversion
      price of the Debenture, historical stock price volatility, risk free interest
      rate based upon the five year selected government of Canada benchmark bond
      yield; dividend yield of 0%; and, an initial three year term. The initial fair
      value of the embedded derivative totalled $1,395,227 which has been recorded
      as
      a derivative liability with the offsetting amount recorded as debt discount.
      The
      amount recorded as a debt discount will be accreted as interest expense over
      the
      life of the Debenture using an effective interest method. As of December 31,
      2006, the unaccreted debt discount totalled $1,119,545 which $275,682 had been
      accreted for the year ended December 31, 2006.





Additionally,
      the Warrants related to the convertible debenture would be required to be
      recorded at fair value and accounted for as a financing cost associated with
      the
      convertible debenture. The estimated fair value of the related warrants was
      determined using Black-Scholes option pricing model using the following
      assumptions: exercise price pursuant to the Agreement, risk free interest rate
      based upon the five year selected government of Canada benchmark bond yield;
      dividend yield of 0% and 3 year term. The fair value of the related warrants
      totalled $714,819 which has been recorded as capitalized financing cost which
      will be amortized over the life of the Debenture using the effective interest
      method. As of December 31, 2006, the unamortized financing cost totalled
      $485,085 which $229,734 had been amortized for the year ended December 31,
      2006.





All
      outstanding $1,500,000 USD Convertible Debentures were forgiven on August 1,
      2007 (Note 1).




Page
                  32




*Table
          of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**11.**
            **CONVERTIBLE
                DEBENTURES**(Continued)





**(b)**
            **$420,000
                Convertible Debentures**





On
                May 30, 2006, the Company entered into a Securities Purchase Agreement,
                dated as of April 10, 2006 (“Agreement”), with eighteen investors referred
                to as the “Investors” The Agreement provides for the sale by the Company
                to the Investors of a Secured Convertible Debenture (the “Debenture”)
                issued by the Company in the aggregate principal amount of $420,000
                (“Principal Amount”). The Debenture matures April 9, 2009, bear interest
                at 10% per annum with interest payable in cash or, at the Company's
                option, in shares of common stock provided certain conditions are
                satisfied. Pursuant to the Agreement, the Investors also received
                common
                stock purchase warrants (the “Warrants”) to purchase (i) 253,312 shares of
                the Company's common stock at an exercise price of $.30 per share
                (ii)
                151,998 shares of the Company's common stock at an exercise price
                of $.20
                per share and (iii) 405,300 shares of the Company's common stock
                at an
                exercise price of $.19 per share. The Debenture has an initial conversion
                price of the lesser of (i) a price equal to $.2483 (the “Fixed Conversion
                Price”) or (ii) ninety percent (90%) of the lowest daily volume
                weighted average price of the common stock during the ten trading
                days
                immediately preceding the Conversion Date (as quoted by Bloomberg,
                LP) per
                share and provides for anti-dilution protection (in certain
                circumstances). The Investor may not convert the Debenture or exercise
                the
                Warrants to the extent that, after giving effect to such conversion
                or
                exercise, as the case may be, the Investor would beneficially own
                in
                excess of 4.99% of the number of shares of common stock of the Company
                outstanding immediately after giving effect to such conversion or
                exercise, calculated in accordance with Section 13(d) of the Securities
                Exchange Act of 1934, as amended, and the rules and regulations
                promulgated thereunder. Such limitation with respect to such conversion
                or
                exercise may be waived by the Investor upon not less than 65 days
                prior
                notice to the Company. The Warrants are exercisable for a period
                of three
                years. The conversion of the Debenture is subject to an effective
                registration statement to be filed by the Company.





The
      Company has determined the conversion feature of the Debenture represents an
      embedded derivative which would be required to be fair valued and bifurcated
      from the underlying host debt as derivative liability. The embedded derivative
      liability will be adjusted to the fair value of the underlying securities at
      the
      end of each reporting period. The recorded fair values of the derivative
      liability can fluctuate significantly based upon the fluctuations in the market
      value of the underlying securities, as well as the volatility of the stock
      price
      during the term used for observation and the term remaining for the warrants.
      The adjustment to fair value for the derivative liability will result in either
      an unrealized gain or loss and recorded in the income statement as a component
      of the Statement of Operations. The estimated fair value of the derivative
      liability has been determined using Black-Scholes option pricing model using
      the
      following assumptions: exercise price based upon the conversion price of the
      Debenture, historical stock price volatility, risk free interest rate based
      upon
      the five year selected government of Canada benchmark bond yield; dividend
      yield
      of 0%; and, an initial 3 year term. The initial fair value of the embedded
      derivative totalled $311,211 which has been recorded as a derivative liability
      with the offsetting amount recorded as debt discount. The amount recorded as
      a
      debt discount will be accreted as interest expense over the life of the
      Debenture using an effective interest method. As of December 31, 2006, the
      unaccreted debt discount totalled $272,296 which $38,915 had been accreted
      for
      the year ended December 31, 2006.




Page
                  33




*Table
          of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**11.**
            **CONVERTIBLE
                DEBENTURES**(continued)





**(b)**
            **$420,000
                Convertible Debentures**(continued)





Additionally,
      the Warrants related to the convertible debenture would be required to be
      recorded at fair value and accounted for as a financing cost associated with
      the
      convertible debenture. The estimated fair value of the related warrants was
      determined using Black-Scholes option pricing model using the following
      assumptions: exercise price pursuant to the Agreement, risk free interest rate
      based upon the five year selected government of Canada benchmark bond yield;
      dividend yield of 0% and 3 year term. The fair value of the related warrants
      totalled $106,559 which has been recorded as capitalized financing cost which
      will be amortized over the life of the Debenture using the effective interest
      method. As of December 31, 2006, the unamortized financing cost totalled $82,980
      of which $23,579 had been amortized for the year ended December 31,
      2006.





All
      outstanding $420,000 Convertible Debentures were forgiven on August 1, 2007
      (Note 1).





**12.**
            **ADVANCES
                PAYABLE**




The
                Company received advances of CDN $262,250 (US $226,600) to fund working
                capital during a due diligence exclusivity period related to the
                transaction described in note 14. If the transaction is not consummated
                during the exclusivity period, the advances are to be converted into
                common stock of the Company at U.S. $0.08 per share. Subsequent to
                year-end, the Company received additional advances of CDN $131,125
                (US
                $113,300). As the transaction was not completed within the exclusivity
                period, the total advances payable of CDN $384,024 (US $339,900)
                were
                converted into 4,248,750 shares of common stock of the Company (Note
                10).





**13.**
                **DIFFERENCES
                    BETWEEN CANADIAN AND UNITED STATES ACCOUNTING****PRINCIPLES**





This
      reconciliation only covers measurement issues and not disclosure issues pursuant
      to the rules and regulations of the Securities and Exchange Commission.





The
      consolidated financial statements of the Company for the years ended December
      31, 2007, 2006 and 2005 have been prepared in accordance with generally accepted
      accounting principles as applied in Canada (“Canadian GAAP”). In the following
      respects, generally accepted accounting principles as applied in the United
      States (“US GAAP”) differ from those applied in Canada.





There
      would be no adjustments needed to arrive at net loss for the years ended
      December 31, 2007, 2006 and 2005 if US GAAP were employed.  Similarly,
      there would be no adjustments needed to arrive at shareholders’ equity as at
      December 31, 2007, 2006 and 2005 if US GAAP were employed.




Page
                  34




*Table
          of Contents*





**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)





**13.**
                **DIFFERENCES
                    BETWEEN CANADIAN AND UNITED STATES ACCOUNTING****PRINCIPLES**(continued)





***Accounting
      for future (deferred) income taxes***





The
      significant differences between US GAAP and Canadian GAAP in the accounting
      for
      future income taxes relate to the treatment of proposed changes in income tax
      rates and terminology. Under Canadian GAAP, future income tax assets and
      liabilities are measured using substantively enacted tax rates and laws expected
      to apply when the differences between the accounting basis and tax basis of
      assets and liabilities reverse. Under US GAAP, future income tax assets and
      liabilities are called deferred income tax assets and liabilities and are
      measured using only currently enacted tax rates and laws. As at December 31,
      2007, 2006 and 2005, the difference in rate determination did not result in
      any
      adjustment from Canadian to US GAAP since any deferred tax assets were not
      considered more likely than not to be realized and, accordingly, a full
      valuation allowance was recorded on such assets.





***Property,
      plant, equipment, and contributed surplus***





There
      is
      a difference between US GAAP and Canadian GAAP for property, plant and equipment
      with respect to terminology. Under US GAAP, property, plant and equipment are
      commonly called “fixed assets.” There is a difference between US GAAP and
      Canadian GAAP with respect to terminology. Under US GAAP, contributed surplus
      is
      referred to as “additional paid in capital.”




**14.**
            **SUBSEQUENT
                EVENTS**





i)
            On
                December 10, 2007, the Company announced that it had executed a letter
                of
                intent (“LOI”) with Colorep Inc. (“Colorep”) relating to a transaction
                whereby shares of the Company will be issued in exchange for all
                of the
                issued and outstanding shares of Colorep under terms that constitute
                a
                reverse takeover (“RTO”) pursuant to Emerging Issue Committee abstract
                EIC-10,*Reverse
                Takeover Accounting,*of
                the CICA Handbook. Following the successful completion of the RTO,
                the
                Company will become the legal parent of, and the existing shareholders
                of
                Colorep will acquire control of, the combined enterprise. Successful
                completion of the RTO is subject to several conditions as discussed
                below.




Colorep
      is located in Rancho Cucamonga, CA, and develops and offers for sale sustainable
      subsurface printing and dyeing technology for decorating a wide variety of
      textiles and other consumer products. Colorep has previously announced its
      intention to acquire Transprint USA Inc. (“Transprint”), a privately held,
      employee-owned company, founded in 1978, with headquarters and manufacturing
      facilities in Harrisonburg, VA, and design studios and showrooms in New York
      City and Charlotte, NC. Transprint offers printing products and design services
      worldwide for the apparel, commercial and residential furnishings markets.
      The
      definitive share purchase agreement between Colorep and Transprint has been
      completed. One of the conditions precedent to the conclusion of the RTO under
      the LOI is receipt by Colorep of a credit facility sufficient to enable Colorep
      to conclude the acquisition of Transprint.




Page
                  35




*Table
          of Contents*




**CARTHEW
      BAY TECHNOLOGIES INC.**


**(Formerly
      Astris Energi Inc.)**


**Notes
      to the Consolidated Financial Statements**


December
      31, 2007, 2006 and 2005


(Canadian
      Dollars)




**14.**
            **SUBSEQUENT
                EVENTS (continued)**





Pursuant
      to the LOI and subject to the terms thereof, the Company will invest US
      $2,000,000 in two equal tranches into secured debentures (the “Debentures”) of
      Colorep. The Debentures will bear interest at 1% per month (unless increased
      pursuant to the terms of the LOI) and interest will accrue until maturity on
      April 30, 2008. Subject to certain conditions, the Company is obligated to
      advance the first US $1,000,000 to Colorep upon execution of a binding share
      exchange agreement. The LOI further provides that upon receipt of all approvals,
      including shareholder and regulatory approvals, necessary to conclude the RTO,
      the Company will cancel the Debentures. There are many conditions associated
      with the conclusion of the various transactions included as part of the LOI
      including: a) a condition that the Company consolidate its shares pursuant
      to a
      formula included as part of the LOI, and b) the completion of Transprint
      acquisition by Colorep.




Subject
      to certain extension provisions set out in the LOI, the transactions
      contemplated thereunder must be completed prior to April 30, 2008. Upon closing
      of the RTO, all of the current members of the Board of Directors of the Company,
      other than Michael Liik, will resign and will be replaced by between four and
      six new members.




Execution
      of the LOI has received the unanimous approval for the Board of Directors of
      the
      Company.




ii)
            In
                conjunction with the proposed RTO, the Board of Directors of the
                Company
                approved a Success Fee payable to its CEO and CFO amounting to 1.4%
                of the
                Colorep transaction value or $1,150,000, earned upon closing of the
                Colorep RTO transaction and payable as a combination of cash remaining
                in
                the Company immediately prior to the RTO transaction and treasury
                shares
                of the Company issued at a price equivalent to the value per share
                (after
                giving consideration to the shares issued in this regard) received
                by the
                shareholders of the Company as a consequence of the RTO. The fee
                would be
                increased by an additional 0.06% of the transaction value or $500,000,
                or
                such pro-rated amount, determined 3 months after closing of the RTO
                transaction and based upon the performance of the post-RTO shares.
                In the
                event that the performance of the post-RTO shares (with the definition
                of
                performance to be established in a formal agreement), is between
                $0.70 per
                share equivalent value (as described in the LOI) and $1.00 per share,
                the
                additional $500,000 fee would be pro-rated such that no fee would
                be
                earned on the lower threshold and the full fee earned on the upper
                threshold. This fee would be payable in treasury shares of the Company
                on
                the basis described above.




iii)
            5,000,000
                share purchase warrants to acquire shares of the Company expired
                on
                January 28, 2008 (note 6 (f)).




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