UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


FORM
20-F





(Mark
One)


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





x ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2008





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





 ̈ 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.


76,404,648
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  ̈         No
x










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  ̈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 xNo  ̈





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  ̈Accelerated filer  ̈Non-accelerated filer x





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


Item 17
xItem 18
 ̈





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  ̈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  ̈No  ̈




2




TABLE OF
CONTENTS




Part
      I
                    4Item 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
                    39Item
      8. Financial Information
                    42Item
      9. The Offer and Listing
                    43Item
      10. Additional Information
                    44Item
      11. Quantitative and Qualitative Disclosures About Market
    Risk
                    56Item
      12. Description of Securities Other than Equity Securities
                    56Part
      II
                    56Item
      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
                    57Item
      16. [Reserved]
                    58Item
      16A. Audit Committee Financial Expert
                    58Item
      16B. Code of EthicsItem
      16C. Principal Accountant Fees and Services
                    58Item
      16D. Exemptions from listing the Standards for Audit
      CommitteesItem
      16E. Purchases of Equity Securities by the Issuer and Affiliated
      Purchasers
                    58Part
      IIIItem
      17. Financial Statements
                    58Item
      18. Financial Statements
                    59Item 19. Exhibits
                    59




3




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.




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
      31,2008
                            
                            
                            2007
                            
                            
                            2006
                            
                            
                            2005
                            
                            
                            2004Revenue
                            
                            $
                            NIL
                            
                            
                            $
                            31,290
                            
                            
                            $
                            85,915
                            
                            
                            $
                            291,512
                            
                            
                            $
                            88,798Net
      Profit (Loss)from Operations
                            
                            
                            (571,755
                            )
                            
                            
                            (2,507,843
                            )
                            
                            
                            (2,120,422
                            )
                            
                            
                            (5,330,864
                            )
                            
                            
                            (3,462,257
                            )Net
      Profit (Loss)
                            
                            
                            176,689
                            
                            
                            
                            1,995,088
                            
                            
                            
                            (2,120,422
                            )
                            
                            
                            (5,330,864
                            )
                            
                            
                            (3,462,257
                            )Basic
      Profit (Loss) from operationsper
      Share
                            
                            
                            0.00
                            
                            
                            
                            0.04
                            
                            
                            
                            (0.05
                            )
                            
                            
                            (0.16
                            )
                            
                            
                            (0.26
                            )Diluted
                            
                            
                            0.00
                            
                            
                            
                            0.03
                            
                            
                            
                            n/a
                            
                            
                            
                            n/a
                            
                            
                            
                            n/aTotal
      Assets
                            
                            
                            2,995,529
                            
                            
                            
                            2,634,698
                            
                            
                            
                            1,766,218
                            
                            
                            
                            982,494
                            
                            
                            
                            509,124Net
      Assets
                            
                            
                            2,945,079
                            
                            
                            
                            2,551,811
                            
                            
                            
                            (53,221
                            )
                            
                            
                            (228,456
                            )
                            
                            
                            253,294Long
      Term Obligations
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Share
      Capital
                            
                            
                            10,978,448
                            
                            
                            
                            10,845,648
                            
                            
                            
                            11,205,002
                            
                            
                            
                            10,030,096
                            
                            
                            
                            6,227,074Number
      of Shares Basic
                            
                            
                            76,404,648
                            
                            
                            
                            50,789,682
                            
                            
                            
                            48,131,669
                            
                            
                            
                            37,906,569
                            
                            
                            
                            26,316,551Cash
      Dividends
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -




4




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,
                          
                          2008
                          
                          
                          2007
                          
                          
                          2006
                          
                          
                          2005
                          
                          
                          2004End
      of Period
                          
                          
                          .8166
                          
                          
                          
                          1.02
                          
                          
                          
                          .86
                          
                          
                          
                          .86
                          
                          
                          
                          .83Average
      for Period
                          
                          
                          .938
                          
                          
                          
                          .936
                          
                          
                          
                          .882
                          
                          
                          
                          .825
                          
                          
                          
                          .77High
      for Period
                          
                          
                          1.028
                          
                          
                          
                          .84
                          
                          
                          
                          .91
                          
                          
                          
                          .875
                          
                          
                          
                          .85Low
      for Period
                          
                          
                          .7711
                          
                          
                          
                          1.09
                          
                          
                          
                          .853
                          
                          
                          
                          .785
                          
                          
                          
                          .70





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 2008 and 2009.  The exchange rates used
are the closing rates as provided by the Bank of Canada.





Month
                        
                        High
                        
                        
                        LowNovember
      2008
                        
                        
                        .8696
                        
                        
                        
                        .7779December
      2008
                        
                        
                        .8358
                        
                        
                        
                        .7711January
      2009
                        
                        
                        .8458
                        
                        
                        
                        .7849February
      2009
                        
                        
                        .8202
                        
                        
                        
                        .7758March
      2009
                        
                        
                        .8167
                        
                        
                        
                        .7692





The
exchange rate on December 31, 2008 for the conversion of United States dollars
into Canadian dollars was $1.2107 (CDN$1.00 = US$.826). As of April 15, 2009 the
close rate of exchange for the conversion of United States dollars into Canadian
dollars was 1.2062(CDN$1.00 = US$.829).  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




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$14,269,936 as of December 31,
2008.





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 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.




6





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




7




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 2008 from a high of US$0.06 to a low of US$0.005 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.




8




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$5.00 per share.  This is subject to
certain exemptions based upon minimum assets or revenues. As of April 15, 2009,
the closing bid and asked prices for the Common Shares were
US$.0055 and US$.009 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  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.




9




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, 13th 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




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. 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.




11




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 at www.astris.ca
      under “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
      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.




12




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





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


Journal
      of Power Sources: Volume 129, 2004, pp 193-204, Elsevier
      Publishers




14




2.
            Erich
      Gülzow,


Alkaline fuel cells: a
      critical view


Journal
      of Power Sources: Volume 61, 1996, pp 99-104, Elsevier
      Publishers





3.
            Eddy
      De Geeter, Michael Mangan, Staf Spaepen, William Stinissen, Georges
      Vennekens,


Alkaline fuel cells
      for road traction


Journal
      of Power Sources: Volume 80, 1999, pp 207-212, Elsevier
      Publishers





4.
            K.
      Kordesch, M. Cifrain,


Handbook of Fuel Cells
      – Fundamentals, Technology and
  Applications


Pp
      789-793, 2003, John Wiley & Sons, Ltd,
  Chichester





5.
            G.F.
      McLean, T. Niet, S. Prince-Richard, N.
Djilali,


An assessment of
      alkaline fuel cell
technology


International
      Journal of Hydrogen Energy: Volume 27, 2002, pp 507-526, Pergamon
      Press





6.
            K.
      Kordesch in Comprehensive 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 Energy


Foote
      Prints Vol. 48, No. 2, Foote Mineral Co., Exton, PA
  19341.





8.
            Fuel Cells: A
      Handbook


U.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 KOH.” Reference #1, pp
  193





15





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 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:





16





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




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





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 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.




19




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, 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:




20




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




21




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





22





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 2009 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.




23




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, 2008, 2007 and 2006.
 The financial statements are prepared in accordance with Canadian
generally accepted accounting principles (“GAAP”) and are presented in Canadian
dollars.  Differences between Canadian GAAP and United States GAAP can be
found in Note 12 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.




24




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,
2008, revenue from the sale of fuel cells
and related products and
contract work was $NIL compared with  $31,290 for the same period in
2007 and $85,915 for the same period in 2006. Sales of fuel cells and related
products to unrelated partiesin 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 $67,932to the rest of the world.




25


EXPENSES





For the
year ended December 31, 2008, expenses totaled $571,755 compared with $2,539,133
for the same period in 2007, compared with $2,206,337 for the same period in
2006. The main variance in 2008 was due to sale of the operating assets in
2007.  General and Administrative expenses were $554,712 in 2008 as
compared to $1,076,232 in 2007 compared with $1,439,093 in 2006





Professional
fees were $148,426 as compared to $370,795 in 2007 and $152,185 in 2006,
reflecting the Company’s reduced corporate activity, legal activity, accounting
and compliance activity.





NET
INCOME (LOSS)FOR THE YEAR ENDED DECEMBER 31, 2008





The
Company reported a net income of $176,689 (a profit of $.00 per share basic and
diluted) for the year ended December 31, 2008, compared with net income 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 $0.05 per share
basic and diluted) in 2006.  This is the result of the foreign
exchange gain relating to the bulk of the assets of the company being domiciled
in US$.




As at
December 31, 2008, the Company has non-capital loss carry forwards of
approximately $7,533,000.  If unused, the tax losses will expire as
follows:


2014
                  
                  $
                  2,547,0002015
                  
                  $
                  3,030,0002026
                  
                  $
                  1,835,0002028
                  
                  $
                  121,000





In
addition, the company has non-deductible scientific research and development
expenditures amounting to $1,861,263, which have no expiry date.





B.
 LIQUIDITY AND CAPITAL RESOURCES.





The
Company had a net cash flow deficit of $2,064,900 in 2008 compared with a net
cash flow of $2,522,350 in 2007, compared with a net cash flow deficit of $5,776
in 2006. The decrease is the result of the investment by the Company in
Colorep Inc.





At 2008
year end, the Company had $2,995,529 of assets and a shareholders’ equity of
$2,945,079 compared to a shareholders’ equity of $2,551,811 in
2007.





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.




26


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
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.




27


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.





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.




28


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.





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.




29


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.




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.




30


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





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;




31


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
April 15th, 2009 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)
                            
                            50
                            
                            President,
      Chief Executive Officer and Director
                            
                            2004Brian
      Clewes
                            
                            50
                            
                            Chief
      Financial Officer, Secretary, Treasurer and Director
                            
                            2004Arthur
      Laudenslager (2)
                            
                            82
                            
                            Director
                            
                            2003Christopher
      Besant
                            
                            50
                            
                            Director
                            
                            2007Richard
      Callander (1)
                            
                            50
                            
                            Director
                            
                            2007Howard
      Drabinsky (2)
                            
                            53
                            
                            Director
                            
                            2007




Notes




(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 Clewes & Associates Life Insurance Consultancy 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.




32




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 Astris Energi Board a great deal of
experience and knowledge in corporate structure and financing




Christopher
Besant is a lawyer and the Chair of the Canadian Financial Restructuring and
Recovery Practice of Baker & McKenzie LLP and a partner in the global Baker
& McKenzie North American Restructuring Practice. 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 Senior
Partner and former 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





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.




33


(1)
            Paid
      in Cash





2008
                          
                          
                          2007
                          
                          
                          2006
                          
                          
                          2005Macnor
      Corp (1)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          135,997
                          
                          
                          
                          66,665Jiri
      Nor
                          
                          
                          -
                          
                          
                          
                          4,000
                          
                          
                          
                          -
                          
                          
                          
                          -Fortius
      Research & Trading (2)
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          55,225
                          
                          
                          
                          15,000Anthony
      Durkacz
                          
                          
                          -
                          
                          
                          
                          4,000
                          
                          
                          
                          -
                          
                          
                          
                          -Liikfam
      Holdings Inc. (3)
                          
                          
                          27,315
                          
                          
                          
                          25,000
                          
                          
                          
                          -
                          
                          
                          
                          -Michael
      Liik
                          
                          
                          -
                          
                          
                          
                          54,000
                          
                          
                          
                          -
                          
                          
                          
                          -397230
      Ontario Limited (4)
                          
                          
                          -
                          
                          
                          
                          40,000
                          
                          
                          
                          -
                          
                          
                          
                          -Brian
      Clewes
                          
                          
                          27,315
                          
                          
                          
                          4,000
                          
                          
                          
                          -
                          
                          
                          
                          -Arthur
      Laudenslager
                          
                          
                          27,315
                          
                          
                          
                          29,000
                          
                          
                          
                          -
                          
                          
                          
                          -Sterling
      Partners (5)
                          
                          
                          27,315
                          
                          
                          
                          25,000
                          
                          
                          
                          -
                          
                          
                          
                          -Rick
      Callander
                          
                          
                          27,315
                          
                          
                          
                          1,000
                          
                          
                          
                          -
                          
                          
                          
                          -Howard
      Drabinsky
                          
                          
                          27,315
                          
                          
                          
                          1,000
                          
                          
                          
                          -
                          
                          
                          
                          -Lang
      Michener
                          
                          
                          -
                          
                          
                          
                          25,000
                          
                          
                          
                          -
                          
                          
                          
                          -Chris
      Besant
                          
                          
                          27,315
                          
                          
                          
                          1,000
                          
                          
                          
                          -
                          
                          
                          
                          -Total
                          
                          
                          163,890
                          
                          
                          
                          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.




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




34


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).





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
      – Jiri Nor
                      
                      
                      96,476
                      
                      
                      
                      14,000Total
                      
                      
                      2,616,310
                      
                      
                      
                      374,534




35


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





In 2008,
we issued  to Macnor Corp, a related party, 3,000,000 shares for
professional services for a value of $101,875.





Directors





(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.


36


(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 May 19, 2009





The
following table outlines the options that are outstanding as of May 19, 2009 of
the directors and senior management or their affiliates of the
Company:





Name
                          
                          Number of Shares
                          
                          
                          Exercise Price
                          
                          ExpiryMichael
      Liik (1)
                          
                          
                          3,0542,182
                          
                          
                          $
                          US0.027
                          
                          09/06/2012Michael
      Liik (2)
                          
                          
                          500,000
                          
                          
                          $
                          US0.37
                          
                          12/11/2009Brian
      Clewes (1)
                          
                          
                          2,034,788
                          
                          
                          $
                          US0.027
                          
                          09/06/2012Brian
      Clewes (3)
                          
                          
                          254,348
                          
                          
                          $
                          US0.022
                          
                          11/23/2012Arthur
      Laudenslager (1)
                          
                          
                          508,697
                          
                          
                          $
                          US0.027
                          
                          09/06/2012Christopher
      Besant (1)
                          
                          
                          508,697
                          
                          
                          $
                          US0.027
                          
                          09/06/2012Richard
      Callander (1)
                          
                          
                          508,697
                          
                          
                          $
                          US0.027
                          
                          09/06/2012Howard
      Drabinsky (1)
                          
                          
                          508,697
                          
                          
                          $
                          US0.027
                          
                          09/06/2012





Options
to Directors and Officers will become vested as follows:





1.        
   Upon the successful completion of the acquisition of a
suitable company.





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


37


(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 May 19, 2009, the beneficial share holdings (see
(4)) in the Common Shares, which are the only outstanding 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
                                            
                                            
                                            
                                            .93
                                            %*Arthur Laudenslager (1)
                                            
                                            
                                            
                                            
                                            
                                            755,796
                                            
                                            
                                            
                                            755,796
                                            
                                            
                                            
                                            .99
                                            %*Michael Liik (2)
                                            
                                            
                                            500,000
                                            
                                            
                                            
                                            2,266,814
                                            
                                            
                                            
                                            2,266,814
                                            
                                            
                                            
                                            2.97
                                            %All Executive Officers and Directors as a
      group
                                            
                                            
                                            500,000
                                            
                                            
                                            
                                            3,734,497
                                            
                                            
                                            
                                            3,734,497
                                            
                                            
                                            
                                            4.89
                                            %




38





* Denotes
less than 1%





(1)
            Includes
      (i) 755,796 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.





Allthe 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 May 19, 2009, 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 of Beneficial Owner
                                  
                                  Amount and Nature of
      Percent
                                    ClassJiri
      K. Nor (1)
                                  
                                  
                                  7,401,746
                                  
                                  
                                  
                                  9.69
                                  %MKU
      Canada Inc.
                                  
                                  
                                  4,801,747
                                  
                                  
                                  
                                  6.28
                                  %




(1)
Includes (i) 307,907 Common Shares held by Jiri K. Nor and (ii) 4,457,879 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 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.


39


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, 2008 include the following amounts:





Position in
                        
                        Amount
                        
                        
                        Amount
                        
                        
                        AmountEntity
                        
                        Company
                        
                        2008
                        
                        
                        2007
                        
                        
                        2006Anthony
      Durkacz
                        
                        Director
      & Officer
                        
                        $
                        
                        
                        
                        $
                        
                        
                        
                        $
                        2,141Arthur
      Laudenslager
                        
                        Director
                        
                        
                        5,075
                        
                        
                        
                        
                        
                        
                        
                        2,397Brian
      Clewes
                        
                        Director
                        
                        
                        5,075
                        
                        
                        
                        25,000
                        
                        
                        
                        2,000Chris
      Besant
                        
                        Director
                        
                        
                        5,075
                        
                        
                        
                        25,000Richard
      Callander
                        
                        Director
                        
                        
                        5,075Fortius
      Research and
                          Trading
                        
                        Controlled
      by A.D.
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        5,300Howard
      Drabinsky
                        
                        Director
                        
                        
                        5,075
                        
                        
                        
                        
                        
                        
                        
                        -Jiri
      Nor
                        
                        Director
      & Officer
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        3,011Liikfam
      Holdings Inc.
                        
                        Controlled
      by M.L.
                        
                        
                        5,075
                        
                        
                        
                        
                        
                        
                        
                        26,500Macnor
      Corp.
                        
                        Controlled
      by J.N.
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        21,333Michael
      Liik
                        
                        Director
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        2,000Peter
      Nor
                        
                        Officer
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        1,971$
                        30,450
                        
                        
                        $
                        50,000
                        
                        
                        $
                        66,653


40





(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
                          
                          2008
                          
                          
                          2007
                          
                          
                          2006Gary
      Brandt
                          
                          Director
                          
                          $
                          
                          
                          
                          $
                          -
                          
                          
                          $
                          4,000Brian
      Clewes (BC)
                          
                          Director
                          
                          
                          27,316
                          
                          
                          
                          49,005
                          
                          
                          
                          6,000Anthony
      Durkacz(AD)
                          
                          Director
      & Officer
                          
                          
                          
                          
                          
                          
                          9,059
                          
                          
                          
                          6,000Fortius
      Research and
                          
                          DirectorTrading
                          
                          Controlled
      by A.D.
                          
                          
                          
                          
                          
                          
                          48,733
                          
                          
                          
                          92,725Arthur
      Laudenslager
                          
                          Director
                          
                          
                          27,315
                          
                          
                          
                          46,122
                          
                          
                          
                          6,100397230
      Ontario Limited
                          
                          Controlled
      by B.C.
                          
                          
                          126,397
                          
                          
                          
                          40,000
                          
                          
                          
                          -Howard
      Drabinsky (HD)
                          
                          Director
                          
                          
                          27,315
                          
                          
                          
                          1,000
                          
                          
                          
                          -Lang
      Michener
                          
                          For
      HD
                          
                          
                          
                          
                          
                          
                          10,417
                          
                          
                          
                          -Rick
      Callander (RC)
                          
                          Director
                          
                          
                          27,315
                          
                          
                          
                          1,000
                          
                          
                          
                          -Chris
      Besant
                          
                          Director
                          
                          
                          27,315
                          
                          
                          
                          11,417
                          
                          
                          
                          -Stirling
      Partners
                          
                          Controlled
      by R.C.
                          
                          
                          
                          
                          
                          
                          10,417
                          
                          
                          
                          -Liikfam
      Holdings Inc.
                          
                          Controlled
      by M.L.
                          
                          
                          143,712
                          
                          
                          
                          118,750
                          
                          
                          
                          100,000Macnor
      Corp. re Jiri Nor
                          
                          Controlled
      by J.N.
                          
                          
                          
                          
                          
                          
                          93,330
                          
                          
                          
                          149,997Macnor
      Corp re Peter Nor
                          
                          Controlled
      by J.N.
                          
                          
                          
                          
                          
                          
                          56,000
                          
                          
                          
                          98,000Michael
      Liik (ML)
                          
                          Director
                          
                          
                          
                          
                          
                          
                          36,941
                          
                          
                          
                          6,000Jiri
      Nor
                          
                          Director
      & Officer
                          
                          
                          
                          
                          
                          
                          9,059
                          
                          
                          
                          6,000David
      Ramm
                          
                          Director
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          2000$
                          406,685
                          
                          
                          $
                          541,250
                          
                          
                          $
                          476,822





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:





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




41


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. In June
2008,  213,334 shares were issued to non related parties in settlement
of amounts owing.





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 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 opportunities.


42


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 May
19, 2009, the Company had 269 stockholders of record for its Common Shares and
76,404,648 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 May 19, 2009, the shareholder list showed
269 registered shareholders holding a total of 76,404,648 Common Shares,
14,250,621 Common Shares in the name of Cede & Co and 24,282,623 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 CWBYF. The quarterly high and low prices
for the past two fiscal years are tabulated below:





2007
                    
                    High
                    
                    
                    LowFirst
                    
                    
                    .040
                    
                    
                    
                    .031Second
                    
                    
                    .038
                    
                    
                    
                    .026Third
                    
                    
                    .035
                    
                    
                    
                    .0175Fourth
                    
                    
                    .0375
                    
                    
                    
                    .022008First
                    
                    
                    .042
                    
                    
                    
                    .026Second
                    
                    
                    .05
                    
                    
                    
                    .02Third
                    
                    
                    .04
                    
                    
                    
                    .021Fourth
                    
                    
                    .02
                    
                    
                    
                    .003




43


The
following table sets forth the high and low market prices for each of the past 4
months:





2009
                            
                            High,
                              US$ /share
                            
                            
                            Low,
                              US$ /shareJanuary
                            
                            
                            .01
                            
                            
                            
                            .005February
                            
                            
                            .01
                            
                            
                            
                            .005March
                            
                            
                            .008
                            
                            
                            
                            .005April
                            
                            
                            .01
                            
                            
                            
                            .005





ITEM 10.
ADDITIONAL INFORMATION.





A.
 SHARE CAPITAL.





Not
Applicable.





ITEM 10
B.  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 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.


44





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


45




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





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.


46





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 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.


47


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.




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.


48


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 of 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 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.


49




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.




On July
8, 2008 the Company announced that a delay in the closing of the RTO would occur
as a consequence of the delay in the signing of the RTO Agreement (May 23,
2008). In addition, the Transaction closing was changed to December 31, 2008.
The transaction requires the filing of a Registration Statement with the SEC by
the Company. It was anticipated that the Registration Statement would be filed
by the end of July and will require 90 to 120 days for SEC review and comments.
Thereafter, the Company would convene a Special Meeting of shareholders to vote
on the RTO transaction. In the event that shareholders approve same, the
transaction would close shortly thereafter. It is likely that the Company will
delay its annual meeting to coincide with this special meeting to avoid
duplicating associated costs.





On
September 5, 2008, the Company announced that there would be further delays with
the completion of Colorep’s audit, which would affect the filing of the
Registration Statement with the SEC.





On
October 27, 2008 the Company announced that it had re-negotiated the terms of
the RTO Agreement with Colorep, Inc. and agreed to extend the closing of the RTO
Agreement from December 31, 2008 to June 30, 2009. In exchange for this
agreement, Colorep will increase the ownership percentage of the post-RTO
company held by the current CBT shareholders such that upon closing of the RTO
transaction, CBT shareholders shall hold 12.753% of the post-RTO common stock of
the surviving company, based upon the current issued and outstanding shares of
Colorep. In addition, in the event that Colorep issues additional shares or
securities convertible into shares of Colorep prior to the RTO, CBT will be
granted dilution protection such that in no event shall the interest of the
current CBT shareholders in the surviving company be allowed to fall below 8% of
the issued and outstanding post-RTO common stock of the surviving company (based
on the current issued and outstanding shares of Colorep), or 5.3% of the
post-RTO ownership of the surviving company, as calculated on a fully diluted
basis.





As a
further inducement to extend the closing, Colorep has agreed to: (i) increase
their obligation to contribute to CBT overhead expenses from $20,000 to $30,000
per month and to pre-pay such amounts through the end of January, 2009; (ii) pay
any outstanding accrued interest on CBT debentures and thereafter make interest
payments on a monthly basis as well as to pre-pay future interest on same
through to the end of January, 2009; (iii) pay any and all amounts outstanding
to CBT in respect of legal or costs owing to CBT plus all reasonable costs
associated with effecting this amendment, to a maximum of $307,000 including the
satisfaction of (i) and (ii) above. Any amounts still outstanding in excess of
the $307,000 cap will be payable on February 1, 2009.


50





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 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.


51





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:





(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").


52





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 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.


53





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 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.


54





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 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.


55





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, 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 OF PROCEEDS





None.


56





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.





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.


57





This
annual report does not include an attestation report of the Company’s registered
public accounting firm MSCM 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.





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, 2008, 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.  All current members of the Audit Committee are
independent.





C.


PRINCIPAL
ACCOUNTANT FEES AND SERVICES





For the
year ended 2008 and 2007, the audit fees were CDN $45,900, and CDN$71,886.
 For the year ended 2006 the audit-related fees for the principal
accountants were CDN$ 61,646 and for 2005 $41,270.  For the years ended
2008 and 2007, 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.





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


58





Description
of Document:


Auditors'
Report for the year ended December 31, 2008.


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, 2008 and 2007.


Consolidated
Statements of Loss and Deficit for the years ended December 31, 2008, 2007 and
2006.


Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and
2007.


Notes to
Consolidated Financial Statements for the year ended December 31, 2008, 2007 and
2006.





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.





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.


59





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.





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.


60





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.





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.


61





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:
      May 19, 2009


62





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)





Financial
Statements


(Canadian
Dollars)


December
31, 2008, 2007 and 2006











CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)





INDEX





December
31, 2008, 2007 and 2006





PAGEINDEPENDENT
      AUDITORS’ REPORT
              1FINANCIAL
      STATEMENTSBalance
      Sheets - Statement I
              2Statements
      of Operations and Deficit - Statement II
              3Statements
      of Cash Flows – Statement III
              4NOTES
      TO THE FINANCIAL STATEMENTS
              5 –
      20














INDEPENDENT
AUDITORS’ REPORT





To
the Shareholders of


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)





We have
audited the balance sheet of CARTHEW BAY TECHNOLOGIES INC.
(Formerly Astris Energi Inc.) as at December 31, 2008 and the statements
of operations and deficit and cash flows for the year then
ended.  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 audit.





We
conducted our audit 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 audit
provides a reasonable basis for our opinion.





In our
opinion, these financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2008 and the results of
its operations and cash flows for the year then ended in accordance with
Canadian generally accepted accounting principles.





The
comparative figures were reported on by another firm of Chartered Accountants
who issued an audit report without reservation on April 24, 2008.





Chartered
      AccountantsLicensed
      Public AccountantsToronto,
      OntarioApril
      15, 2009




Page
1








CARTHEW
      BAY TECHNOLOGIES INC.
                Statement
      I(Formerly
      Astris Energi Inc.)Balance
      SheetsAs
      at December 31, 2008 and 2007(Canadian
      Dollars)





2008
                          
                          
                          2007ASSETSCURRENTCash
                          
                          $
                          479,531
                          
                          
                          $
                          2,544,431Sundry
      amounts receivable
                          
                          
                          61,145
                          
                          
                          
                          2,767Prepaid
      expenses
                          
                          
                          18,853
                          
                          
                          
                          87,500Convertible
      debenture in Colorep Inc. (note
      3(ii))
                          
                          
                          2,436,000
                          
                          
                          
                          -$
                          2,995,529
                          
                          
                          $
                          2,634,698LIABILITIESCURRENTAccounts
      payable and accrued liabilities (note
8)
                          
                          $
                          50,450
                          
                          
                          $
                          82,887SHAREHOLDERS’
      EQUITYSHARE CAPITAL(note
    5(a))
                          
                          
                          10,978,448
                          
                          
                          
                          10,845,648CONTRIBUTED SURPLUS
      (note
      5(a))
                          
                          
                          6,236,567
                          
                          
                          
                          6,152,788DEFICIT - Statement
      II
                          
                          
                          (14,269,936
                          )
                          
                          
                          (14,446,625
                          )2,945,079
                          
                          
                          
                          2,551,811$
                          2,995,529
                          
                          
                          $
                          2,634,698





Approved
      on behalf of the Board:___________________________
      (Director)                   ________________________
      (Director)




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


Page
2








CARTHEW
      BAY TECHNOLOGIES INC.
                      Statement
      II(Formerly
      Astris Energi Inc.)Statements
      of Operations and DeficitFor
      the Years Ended December 31, 2008, 2007 and 2006(Canadian
      Dollars)





2008
                                  
                                  
                                  2007
                                  
                                  
                                  2006REVENUESales
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  31,290
                                  
                                  
                                  $
                                  85,915EXPENSESResearch
      and development (recovery)
                                  
                                  
                                  (131,383
                                  )
                                  
                                  
                                  (31,418
                                  )
                                  
                                  
                                  792,265General
      and administrative (notes 3(iii) and
      8)
                                  
                                  
                                  554,712
                                  
                                  
                                  
                                  1,076,232
                                  
                                  
                                  
                                  1,439,096Professional
      fees (note
      3(iii))
                                  
                                  
                                  148,426
                                  
                                  
                                  
                                  370,795
                                  
                                  
                                  
                                  152,185Interest
      and financing costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  348,913
                                  
                                  
                                  
                                  467,252Amortization
                                  
                                  
                                  -
                                  
                                  
                                  
                                  39,788
                                  
                                  
                                  
                                  77,504Amortization
      of debenture financing costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  261,677
                                  
                                  
                                  
                                  367,579Loss
      (gain) on derivative liability
                                  
                                  
                                  -
                                  
                                  
                                  
                                  473,146
                                  
                                  
                                  
                                  (1,089,544
                                  )(571,755
                                  )
                                  
                                  
                                  2,539,133
                                  
                                  
                                  
                                  2,206,337LOSS
      FROM OPERATIONS
                                  
                                  
                                  (571,755
                                  )
                                  
                                  
                                  (2,507,843
                                  )
                                  
                                  
                                  (2,120,422
                                  )OTHER
      INCOMEInterest
      income (note
      3)
                                  
                                  
                                  268,450
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Foreign
      exchange gain
                                  
                                  
                                  479,994
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -GAIN ON SALE OF ASSETS(note
      1)
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,502,931
                                  
                                  
                                  
                                  -748,444
                                  
                                  
                                  
                                  4,502,931
                                  
                                  
                                  
                                  (2,120,422
                                  )NET INCOME (LOSS) AND
      COMPREHENSIVE INCOME
      (LOSS) FOR THE YEAR
                                  
                                  
                                  176,689
                                  
                                  
                                  
                                  1,995,088
                                  
                                  
                                  
                                  (2,120,422
                                  )DEFICIT,
      BEGINNING OF YEAR
                                  
                                  
                                  (14,446,625
                                  )
                                  
                                  
                                  (16,441,713
                                  )
                                  
                                  
                                  (14,321,291
                                  )DEFICIT,
      END OF YEAR
                                  
                                  $
                                  (14,269,936
                                  )
                                  
                                  $
                                  (14,446,625
                                  )
                                  
                                  $
                                  (16,441,713
                                  )Net Income
      (Loss) per Common Share –Basic(note
      5)
                                  
                                  $
                                  0.00
                                  
                                  
                                  $
                                  0.04
                                  
                                  
                                  $
                                  (0.05
                                  )Net Income
      (Loss) per Common Share –Diluted(note
      5)
                                  
                                  $
                                  0.00
                                  
                                  
                                  $
                                  0.03
                                  
                                  
                                  $
                                  (0.05
                                  )Weighted Average Number of Common
      Shares Outstanding –
      Basic
                                  
                                  
                                  52,796,804
                                  
                                  
                                  
                                  52,008,940
                                  
                                  
                                  
                                  42,561,626Weighted
      Average Number of Common Shares Outstanding – Diluted
                                  
                                  
                                  64,873,293
                                  
                                  
                                  
                                  90,531,825
                                  
                                  
                                  
                                  42,561,626




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


Page
3




CARTHEW
      BAY TECHNOLOGIES INC.
                  Statement
      III(Formerly
      Astris Energi Inc.)Statements
      of Cash FlowsFor
      the Years Ended December 31, 2008, 2007 and 2006(Canadian
      Dollars)





2008
                          
                          
                          2007
                          
                          
                          2006OPERATING
      ACTIVITIESNet
      income (loss) for the year
                          
                          $
                          176,689
                          
                          
                          $
                          1,995,088
                          
                          
                          $
                          (2,120,422
                          )Items
      not requiring cashAmortization
      of capital assets
                          
                          
                          -
                          
                          
                          
                          39,788
                          
                          
                          
                          77,504Amortization
      of  debenture financing costs
                          
                          
                          -
                          
                          
                          
                          261,677
                          
                          
                          
                          367,579Imputed
      interest – amortization of debt discount
                          
                          
                          -
                          
                          
                          
                          218,852
                          
                          
                          
                          314,596Consulting
      and professional fees paid incapital
      stock
                          
                          
                          30,925
                          
                          
                          
                          151,415
                          
                          
                          
                          631,603Consulting
      fees paid in capital stock torelated
      parties
                          
                          
                          101,875
                          
                          
                          
                          -
                          
                          
                          
                          374,533Options
      issued to non-employee
                          
                          
                          83,779
                          
                          
                          
                          143,211
                          
                          
                          
                          -(Gain)
      loss on derivative liability
                          
                          
                          -
                          
                          
                          
                          473,146
                          
                          
                          
                          (1,089,544
                          )Unrealized
      foreign exchange gain
                          
                          
                          (436,000
                          )
                          
                          
                          -
                          
                          
                          
                          -Gain
      on sale of assets
                          
                          
                          
                          
                          
                          
                          (4,502,931
                          )
                          
                          
                          -Net
      change in non-cash working capitalbalances
      related to operations (note
6)
                          
                          
                          (22,168
                          )
                          
                          
                          38,627
                          
                          
                          
                          (192,284
                          )(64,900
                          )
                          
                          
                          (1,181,127
                          )
                          
                          
                          (1,636,435
                          )INVESTING
      ACTIVITIESConvertible
      debenture in Colorep Inc. (note
3)
                          
                          
                          (2,000,000
                          )
                          
                          
                          -
                          
                          
                          
                          -Purchase
      of property, plant and equipment and patents
                          
                          
                          -
                          
                          
                          
                          (63,306
                          )
                          
                          
                          (5,049
                          )Proceeds
      from sale of assets (note
1)
                          
                          
                          -
                          
                          
                          
                          3,035,560
                          
                          
                          
                          -Purchase
      of other assets
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (17,249
                          )(2,000,000
                          )
                          
                          
                          2,972,254
                          
                          
                          
                          (22,298
                          )FINANCING
      ACTIVITIESRedemption
      of common shares
                          
                          
                          -
                          
                          
                          
                          (4,800
                          )
                          
                          
                          -Repayment
      of obligation under capital lease
                          
                          
                          -
                          
                          
                          
                          (6,641
                          )
                          
                          
                          (8,197
                          )Proceeds
      from issuance of $US convertible debentures
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,740,003Deferred
      financing costs
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (341,099
                          )Proceeds
      from advances payable
                          
                          
                          -
                          
                          
                          
                          742,664
                          
                          
                          
                          262,250-
                          
                          
                          
                          731,223
                          
                          
                          
                          1,652,957NET
      (DECREASE) INCREASE IN CASH
                          
                          
                          (2,064,900
                          )
                          
                          
                          2,522,350
                          
                          
                          
                          (5,776
                          )CASH,
      BEGINNING OF YEAR
                          
                          
                          2,544,431
                          
                          
                          
                          22,081
                          
                          
                          
                          27,857CASH,
      END OF YEAR
                          
                          $
                          479,531
                          
                          
                          $
                          2,544,431
                          
                          
                          $
                          22,081





Note 7 – Supplemental
Disclosure of Cash Flows Information




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


Page
4





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)


1.
              DESCRIPTION
      OF BUSINESS





Prior to
August 1, 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 provided
engineering and other services.





From
inception, the efforts of the Company were 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 included 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.





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





On May
23, 2008, the Company signed a share exchange agreement with Colorep Inc.
whereby shares of the Company will be exchanged for all the issued and
outstanding shares of Colorep Inc. under terms that constitute a reverse
takeover (“RTO”).  For details of the proposed transaction, refer to
note 3.





2.
              SIGNIFICANT
      ACCOUNTING POLICIES





Basis
of Presentation





These
financial statements have been prepared by management in accordance with
Canadian generally accepted accounting principles (“GAAP”).  Prior to
August 1, 2007, the Statement of Operations and Deficit included the accounts of
the Company’s wholly-owned holding company 2062540 Ontario Inc. and 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 were eliminated on
consolidation.





Page
5





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (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.





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.




2008
            
            
            2007
            
            
            2006Canadian
      SRED credits
            
            $
            131,383
            
            
            $
            388,886
            
            
            $
            -Czech
      Republic government grants
            
            
            -
            
            
            
            -
            
            
            
            177,715$
            131,383
            
            
            $
            388,886
            
            
            $
            177,715





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 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 stock-based compensation, warrant valuation and future income
taxes.  Actual amounts could differ from management’s
estimates.





Page
6




CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)





2.        SIGNIFICANT
ACCOUNTING POLICIES (continued)





Financial
Instruments





At
December 31, 2008, the Company’s financial instruments comprise cash, sundry
amounts receivable, convertible debenture in Colorep Inc. and accounts payable
and accrued liabilities.





Financial
assets are classified into one of four categories: held-for-trading, held
to-maturity, loans and receivables and available-for-sale; financial liabilities
are classified into one of two categories: held-for-trading and other financial
liabilities.  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.





The
Company has designated cash as held-for-trading, which is measured at fair
value.  Sundry amounts receivable and convertible debenture in Colorep
Inc. are classified as loans and receivables, which are measured at amortized
cost.  Accounts payable and accrued liabilities are classified as
other financial liabilities, which are measured at amortized cost.





Stock-based
Compensation





The
Company has in effect a Stock Option Plan (“the Plan”), which is described in
note 5.  Stock options are accounted for using a fair value-based
method.  Fair value is calculated using the Black-Scholes model with
the assumptions described in note 5.  On the exercise of stock
options, consideration received and the accumulated contributed surplus amount
is credited to share capital.





Foreign Currency
Translation





The
Company translates foreign currency denominated transactions 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.


Page
7





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)
 
  2.        SIGNIFICANT
ACCOUNTING POLICIES (continued)





Income
(Loss) per Share





Basic
income (loss) per share is computed by dividing the income (loss) for the year
by the weighted average number of common shares outstanding during the year,
excluding contingently returnable shares.  Diluted income (loss) per
share is calculated in a similar manner, except that the weighted average number
of common shares outstanding is increased to include contingently returnable
common shares and from the assumed exercise of common share purchase options and
warrants, if dilutive.  The number of additional shares included in
the calculation is based on the treasury stock method for options and
warrants.





Changes
in Accounting Policies





(i)         Financial
instruments – disclosures and presentation:





In
December 2006, the CICA issued Handbook Section 3862, Financial Instruments –
Disclosures, (“Section 3862”) and Section 3863, Financial Instruments –
Presentation (“Section 3863”).  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.  Section 3262 and 3863 were adopted by the Company on January 1,
2008 the Company has included the disclosures recommended by these sections in
note 10 to these financial statements.





(ii)        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 was adopted by the Company on January 1,
2008.  The Company has included the disclosures recommended by Section
1535 in note 9 to these financial statements.





Future
Accounting Changes





International Financial
Reporting Standards (“IFRS”)





In
January 2006, the CICA’s Accounting Standards Board (“AcSB”) formally adopted
the strategy of replacing Canadian generally accepted accounting principles with
IFRS for Canadian enterprises with public accountability.  The current
conversion timetable calls for financial reporting under IFRS for accounting
periods commencing on or after January 1, 2011.  On February 13, 2008
the AcSB confirmed that the use of IFRS will be required in 2011 for publicly
accountable profit-oriented enterprises.  For these entities, IFRS
will be required for interim and annual financial statements relating to fiscal
years beginning on or after January 1, 2011.  The Company is currently
assessing the impact of IFRS on its financial statements.


Page
8





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)





3.        CONVERTIBLE DEBENTURE IN
COLOREP INC.





(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 Colorep, 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, California, 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 acquired Transprint
USA Inc. (“Transprint”), a privately held, employee-owned company, founded in
1978, with headquarters and manufacturing facilities in Harrisonburg, Virginia,
and design studios and showrooms in New York City and Charlotte, North
Carolina.  Transprint offers printing products and design services
worldwide for the apparel, commercial and residential furnishings
markets.




On May
23, 2008, the Company and Colorep signed an agreement and plan of merger
pursuant to which the existing Company's shareholders will hold 7.548% of the
post-RTO common stock of the surviving company.




On
October 27, 2008, the Company and Colorep amended the merger
agreement.  In exchange for the Company agreeing to extend the closing
deadline of the RTO to June 30, 2009, Colorep will increase the ownership
percentage of the post-RTO company held by the current Company shareholders such
that upon closing of the RTO transaction, the Company shareholders will hold
12.753% of the post-RTO common stock of the surviving company, based upon the
current issued and outstanding shares of Colorep.  In addition, in the
event that Colorep issues additional shares or securities convertible into
shares of Colorep prior to the RTO, the Company will be granted dilution
protection such that in no event shall the interest of the current Company
shareholders in the surviving company fall below 8% of the issued and
outstanding post-RTO common stock of the surviving company (based on the current
issued and outstanding shares of Colorep), or 5.3% of the post-RTO ownership of
the surviving company, as calculated on a fully diluted basis.




ii)
            Pursuant
      to the LOI, the Company has invested $2,436,000 (US$2,000,000) in two
      equal tranches into secured convertible debentures (the “Debentures”) of
      Colorep.  The Debentures are secured by all the assets of
      Colorep.  The Company advanced the first US$1,000,000 on
      February 1, 2008 upon execution of a binding share exchange
      agreement.  The second tranche of US$1,000,000 occurred on May 23,
      2008 upon the signing of the definitive share exchange agreement between
      the Company and Colorep.  The Debentures were due on April 30,
      2008, but extended to June 30, 2008 by agreement.  The amendment
      to the merger agreement dated October 27, 2008 extended the expiry of the
      Debentures to June 30, 2009 and subordinated the Debentures to Colorep's
      indebtedness with PNC Credit Corp. of US$4,165,850 relating to two term
      loans and up to US$5,500,000 on a revolving credit
      facility.  Interest is due at 1% per month commencing February
      1, 2008.  The amended merger agreement increased the interest
      rate to 1.5% per month.


Page
9





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)
 
  3.        CONVERTIBLE
DEBENTURE IN COLOREP INC.(continued)





If the
RTO closes, all principal and accrued interest due and owing will be
cancelled.





If the
RTO does not close on the maturity date (June 30, 2009 per the amended
agreement), and the Company is not in breach of the agreement, the Debentures
are convertible at the option of the Company into the number of Colorep shares
that is equal to the outstanding principal and unpaid interest divided by the
conversion price of US$0.80.   If the RTO does not close on the
maturity date and Colorep is in breach, the number of Colorep shares is equal to
US$3,000,000 divided by the conversion price.





During
the year ended December 31, 2008, the Company earned interest income of $237,600
(US$200,000) on the Debentures.





iii)
            Also
      under the terms of the merger agreement, beginning in August 2008, Colorep
      agreed to support the operations of the Company at a rate of $20,000 per
      month to October 2008.  This amount was increased to $30,000 per
      month thereafter.  During the year ended December 31, 2008, the
      Company charged Colorep support fees totalling $142,560 (US$120,000) as
      well as legal and accounting costs in the amount of
      $37,691.  The Company has recorded these reimbursements as
      reductions of general and administrative expense and professional fees,
      respectively.





At
December 31, 2008, interest and support fees in the amount of $54,477
(US$44,727) were included in sundry amounts receivable.





iv)
            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 an
      estimated $1,150,000.  The success fee will be 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 received by the shareholders of the Company as a consequence of
      the RTO.  The fee would be increased by $500,000, determined three
      months after closing of the RTO transaction and based upon the performance
      of the post-RTO shares.  In the event that the price of the post-RTO
      shares, is between $0.70 per share equivalent value and $1.00 per share,
      the additional $500,000 fee would be pro-rated.  This fee would
      be payable in treasury shares of the
Company.





During
      the year ended December 31, 2008 the Company issued 21,776,632 shares to
      the two officers in connection with the success fee.  These
      shares are being held in escrow and will be returned to treasury if the
      transaction is not completed.


Page
10





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)


4.
            INCOME
      TAXES





The
      Company has non-capital tax losses carried forward of approximately
      $7,533,000.  If unused, these tax losses will expire
      approximately as follows:





2014
                  
                  $
                  2,547,0002015
                  
                  
                  3,030,0002026
                  
                  
                  1,835,0002028
                  
                  
                  121,000$
                  7,533,000





The
      Company has unclaimed scientific research and experimental development
      (“SRED”) tax pools in Canada of $1,861,263, which are available to offset
      future taxable income.  These SRED amounts have an unlimited
      carry forward period.





The
      tax effect of significant temporary differences is as
    follows:





2008
                      
                      
                      2007
                      
                      
                      2006Net
      income (loss) before income taxes
                      
                      $
                      176,689
                      
                      
                      $
                      1,995,088
                      
                      
                      $
                      (2,120,422
                      )Statutory
      income tax rate
                      
                      
                      33.50
                      %
                      
                      
                      36.12
                      %
                      
                      
                      36.12
                      %Income
      tax provision (recovery) at statutory rate
                      
                      
                      59,191
                      
                      
                      
                      720,626
                      
                      
                      
                      (765,896
                      )Non-taxable
      gain
                      
                      
                      -
                      
                      
                      
                      (813,229
                      )
                      
                      
                      (393,543
                      )Non-deductible
      expenses
                      
                      
                      72,554
                      
                      
                      
                      566,160
                      
                      
                      
                      779,530Application
      of non-capital losses applied
                      
                      
                      -
                      
                      
                      
                      (473,533
                      )
                      
                      
                      -Change
      in tax rate
                      
                      
                      499,272
                      
                      
                      
                      -
                      
                      
                      
                      -Change
      in valuation allowance
                      
                      
                      (631,017
                      )
                      
                      
                      (24
                      )
                      
                      
                      379,909Income
      tax expense
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -





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





2008
                      
                      
                      2007
                      
                      
                      2006Statutory
      income tax rate
                      
                      
                      29.00
                      %
                      
                      
                      33.5
                      %
                      
                      
                      36.12
                      %Non-capital
      losses and unclaimed SRED
                      
                      $
                      3,050,090
                      
                      
                      $
                      3,716,800
                      
                      
                      $
                      4,067,835Valuation
      allowance
                      
                      
                      (3,050,090
                      )
                      
                      
                      (3,716,800
                      )
                      
                      
                      (4,067,835
                      )Net
      future income tax asset
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -




Page
11





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)
 
  5.       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, 2008, 54,628,016 common shares were issued and
outstanding.





The
weighted average number of common shares outstanding during 2008 was 52,796,804
(2007- 52,008,940; 2006 – 42,561,626).  The weighted average number of
fully diluted common shares outstanding during 2008 was 64,873,293 (2007 -
90,531,825).  The net income including the impact of the potential
dilution was $176,689 (2007 - $2,813,300).  No effect has been given
to the potential exercise of stock options and warrants in the calculation of
diluted net loss per share for the 2006 fiscal year 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
12





CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)
 
  5.        SHARE
CAPITAL AND CONTRIBUTED SURPLUS(continued)





a)      Share capital(continued)





Share and
stock option transactions during the years ended December 31, 2007 and 2008 were
as follows:





ShareNumber
      of
                                
                                
                                Capital
                                
                                
                                ContributedShares Issued
                                
                                
                                Amount
                                
                                
                                SurplusBalance,
      December 31, 2006
                                
                                
                                48,131,669
                                
                                
                                $
                                11,205,002
                                
                                
                                $
                                5,183,490Issued as payment for
      consulting fees to
      related parties
                                
                                
                                1,838,732
                                
                                
                                
                                151,415
                                
                                
                                
                                -Conversion
      of  $US convertible debentures
                                
                                
                                899,281
                                
                                
                                
                                29,568
                                
                                
                                
                                -Conversion
      of advance payable
                                
                                
                                4,248,750
                                
                                
                                
                                384,024
                                
                                
                                
                                -Redemption
      of shares owned by dissenting shareholders
                                
                                
                                (80,000
                                )
                                
                                
                                (17,083
                                )
                                
                                
                                12,283Redemption
      of shares owned by The ACME Global Inc.
                                
                                
                                (4,248,750
                                )
                                
                                
                                (907,278
                                )
                                
                                
                                813,804Valuation
      of settlement options
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                33,568Valuation
      of incentive options
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                99,418Valuation of finders’ fee
      options
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                10,225Balance,
      December 31, 2007
                                
                                
                                50,789,682
                                
                                
                                
                                10,845,648
                                
                                
                                
                                6,152,788Valuation
      of options issued in 2008 to settle debt obligations
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                17,500Issued as payment for
      consulting fees to
      related parties
                                
                                
                                3,000,000
                                
                                
                                
                                101,875
                                
                                
                                
                                -Stock-based
      compension expense relating to options granted in 2007
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                66,279Issued
      as payment for consulting fees and settle debts owing to non related
      parties
                                
                                
                                838,334
                                
                                
                                
                                30,925
                                
                                
                                
                                -Contingently returnable shares
      issued in advance
      for success fee on RTO and heldin escrow(note
      3(iv))
                                
                                
                                21,776,632
                                
                                
                                
                                -
                                
                                
                                
                                -Balance, December 31, 2008
                                
                                
                                76,404,648
                                
                                
                                $
                                10,978,448
                                
                                
                                $
                                6,236,567




Page
13


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)
 
  5.        SHARE
CAPITAL AND CONTRIBUTED SURPLUS (continued)





b)
      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.





(i)
Stock options granted





During
the year ended December 31, 2007, the Company granted stock options as
follows:





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
3.





The
Company issued 1,500,000 settlement optionsto 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 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 3.





During
the year ended December 31, 2008, the Company issued 500,000 options to a former
director to settle debt obligations under the following
terms:  Exercise price US $0.035; expiring June 23, 2013; vesting
immediately.


Page
14


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




5.        SHARE
CAPITAL AND CONTRIBUTED SURPLUS (continued)





b)
Stock option plan (continued)





(ii)
Stock options exercised





No stock
options were exercised during the 2008 or 2007 fiscal year.





(iii) Stock option
valuation





Stock
options issued in the year ended December 31, 2008 were valued at $17,500 (2007
- $242,630) using the Black-Scholes option pricing model with the following
assumptions: risk free interest rate of 3.40%; expected life of 5 years;
expected volatility of 157%; dividend yield of 0% (2007 – 4.3%; 5 years; 142%;
0%; respectively).





During
the year ended December 31, 2007, the Company expensed $33,568 in stock
compensation costs for the settlement options, $99,418 for the incentive options
and $10,225 for the finders’ fee options. During the year ended December 31,
2008, the Company expensed $17,500 in stock compensation costs for the options
granted in 2008 and $66,279 relating to options granted in 2007, leaving $33,140
to be expensed in the future.





Costs of
the incentive options totalled $198,837 of which $99,418 was expensed in 2007
and $66,279 in 2008, leaving $33,140 to be expensed in the future.





(iv)
Summary table





WeightedAverageOptions for
                  
                  
                  ExerciseCommon Shares
                  
                  
                  Price U.S.$Balance,
      December 31, 2006
                  
                  
                  3,818,840
                  
                  
                  
                  0.240Options
      granted
                  
                  
                  9,130,455
                  
                  
                  
                  0.026Options
      exercised
                  
                  
                  -
                  
                  
                  
                  -Options
      cancelled
                  
                  
                  (3,818,840
                  )
                  
                  
                  (0.240
                  )Balance,
      December 31, 2007
                  
                  
                  9,130,455
                  
                  
                  
                  0.026Options
      granted
                  
                  
                  500,000
                  
                  
                  
                  0.035Balance,
      December 31, 2008
                  
                  
                  9,630,455
                  
                  
                  
                  0.026


Page
15


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




5.        SHARE
CAPITAL AND CONTRIBUTED SURPLUS (continued)





b)
Stock option plan (continued)





(v)
Weighted average remaining contractual life





The
following table summarizes information about the Company’s stock options
outstanding as at December 31, 2008:





Number
                                  
                                  
                                  Weighted
                                  
                                  
                                  NumberExercise
                                  
                                  Outstanding at
                                  
                                  
                                  Average
                                  
                                  
                                  Exercisable atPrice
                                  
                                  December 31,
                                  
                                  
                                  Remaining
                                  
                                  
                                  December 31,US$
                                  
                                  2008
                                  
                                  
                                  Life in Years
                                  
                                  
                                  20080.021
      – 0.035
                                  
                                  
                                  9,630,455
                                  
                                  
                                  
                                  3.67
                                  
                                  
                                  
                                  2,000,000




c)
Common share purchase warrants





The
following table illustrates the continuities of the Company’s warrants during
the years ended December 31, 2007 and 2008:




Number
                          
                          
                          
                          
                          
                          Number
                          
                          
                          
                          
                          
                          NumberOutstanding
                          
                          
                          
                          
                          
                          Outstanding
                          
                          
                          
                          
                          
                          OutstandingPrice
                          
                          
                          at
      December
                          
                          
                          Expired
                          
                          
                          at
      December
                          
                          
                          Expired
                          
                          
                          at
      DecemberExpiry
                          
                          US$
                          
                          
                          
                          31, 2006
                          
                          
                          in 2007
                          
                          
                          
                          31, 2007
                          
                          
                          in 2008
                          
                          
                          
                          31, 2008July
      2007
                          
                          
                          0.50
                          
                          
                          
                          100,000
                          
                          
                          
                          100,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -August
      2007
                          
                          
                          0.25
                          
                          
                          
                          1,000,000
                          
                          
                          
                          1,000,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -August
      2007
                          
                          
                          0.36
                          
                          
                          
                          1,000,000
                          
                          
                          
                          1,000,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -September
      2007
                          
                          
                          0.90
                          
                          
                          
                          197,800
                          
                          
                          
                          197,800
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -November
      2007
                          
                          
                          0.50
                          
                          
                          
                          450,000
                          
                          
                          
                          450,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -December
      2007
                          
                          
                          0.60
                          
                          
                          
                          166,700
                          
                          
                          
                          166,700
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -December
      2007
                          
                          
                          0.37
                          
                          
                          
                          500,000
                          
                          
                          
                          500,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -January
      2008
                          
                          
                          0.75
                          
                          
                          
                          2,000,000
                          
                          
                          
                          -
                          
                          
                          
                          2,000,000
                          
                          
                          
                          2,000,000
                          
                          
                          
                          -January
      2008
                          
                          
                          0.92
                          
                          
                          
                          2,000,000
                          
                          
                          
                          -
                          
                          
                          
                          2,000,000
                          
                          
                          
                          2,000,000
                          
                          
                          
                          -January
      2008
                          
                          
                          1.08
                          
                          
                          
                          1,000,000
                          
                          
                          
                          -
                          
                          
                          
                          1,000,000
                          
                          
                          
                          1,000,000
                          
                          
                          
                          -March
      2009
                          
                          
                          0.19
                          
                          
                          
                          1,344,500
                          
                          
                          
                          -
                          
                          
                          
                          1,344,500
                          
                          
                          
                          -
                          
                          
                          
                          1,344,500April
      2009
                          
                          
                          0.27
                          
                          
                          
                          185,000
                          
                          
                          
                          -
                          
                          
                          
                          185,000
                          
                          
                          
                          -
                          
                          
                          
                          185,000April
      2009
                          
                          
                          0.19
                          
                          
                          
                          3,486,000
                          
                          
                          
                          -
                          
                          
                          
                          3,486,000
                          
                          
                          
                          -
                          
                          
                          
                          3,486,000April
      2009
                          
                          
                          0.20
                          
                          
                          
                          746,560
                          
                          
                          
                          -
                          
                          
                          
                          746,560
                          
                          
                          
                          -
                          
                          
                          
                          746,560April
      2009
                          
                          
                          0.30
                          
                          
                          
                          1,241,250
                          
                          
                          
                          -
                          
                          
                          
                          1,241,250
                          
                          
                          
                          
                          
                          
                          
                          1,241,25015,417,810
                          
                          
                          
                          3,414,500
                          
                          
                          
                          12,003,310
                          
                          
                          
                          5,000,000
                          
                          
                          
                          7,003,310




Page
16


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




6.        STATEMENTS OF CASH
FLOW





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





2008
                    
                    
                    2007
                    
                    
                    2006(Increase)
      decrease in sundry amounts receivable
                    
                    $
                    (58,378
                    )
                    
                    $
                    (36,706
                    )
                    
                    $
                    110,520Decrease
      (increase) in prepaid expenses
                    
                    
                    68,647
                    
                    
                    
                    (28,851
                    )
                    
                    
                    70,142Decrease
      (increase) in inventory
                    
                    
                    -
                    
                    
                    
                    15,026
                    
                    
                    
                    (18,470
                    )(Decrease)
      increase in accounts payable and accrued liabilities
                    
                    
                    (32,437
                    )
                    
                    
                    99,786
                    
                    
                    
                    (347,248
                    )Decrease
      in deferred revenue
                    
                    
                    -
                    
                    
                    
                    (10,628
                    )
                    
                    
                    (7,228
                    )$
                    (22,168
                    )
                    
                    $
                    38,627
                    
                    
                    $
                    (192,284
                    )





b)
Supplementary financial information:




2008
                  
                  
                  2007
                  
                  
                  2006Common shares and contributed
      surplus issued to
      pay down director liability
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  100,000Capital lease obligations entered
      into upon acquisition of property and
      equipment
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  47,111Transfer of capital lease
      obligations and corresponding property, plant and equipment
      upon sale(note
      1)
                  
                  $
                  -
                  
                  
                  $
                  32,273
                  
                  
                  $
                  -Conversion
      of convertible debentures (note
    5(b))
                  
                  $
                  -
                  
                  
                  $
                  29,568
                  
                  
                  $
                  723,980Conversion
      of advances payable (note
    5(b))
                  
                  $
                  -
                  
                  
                  $
                  384,024
                  
                  
                  $
                  -Increase
      in contributed surplus upon redemption of shares (note
    5(b))
                  
                  $
                  -
                  
                  
                  $
                  813,804
                  
                  
                  $
                  -




7.        SEGMENTED FINANCIAL
INFORMATION





Prior to
the sale of assets on August 1, 2007, 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 provided engineering and other
services.  Revenue was derived primarily from the sale of goods and
services to customers in the following locations and in the following
amounts:





2008
                  
                  
                  2007
                  
                  
                  2006Canada
                  
                  $
                  -
                  
                  
                  $
                  146
                  
                  
                  $
                  17,220Czech
      Republic
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  763Rest
      of the world
                  
                  
                  -
                  
                  
                  
                  31,144
                  
                  
                  
                  67,932$
                  -
                  
                  
                  $
                  31,290
                  
                  
                  $
                  85,915





At December 31, 2008 and 2007, 100% of
the Company’s assets were in Canada.


Page
17


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




8.        RELATED PARTY TRANSACTIONS
AND BALANCES





During
the year ended December 31, 2008, the Company incurred consulting expenses and
directors’ fees for the services of certain directors in the amount of $406,685
(2007 - $541,200; 2006 - $476,822).





At
December 31, 2008, accounts payable and accrued liabilities included fees
payable to directors in the amount of $30,450 (2007 - $50,000).





During
the year ended December 31, 2007, the Company issued 1,838,732 shares to
officers and directors and/or companies controlled by them, and granted
7,121,758 stock options to directors, 1,500,000 settlement options to former
directors and officers, and 508,679 finders’ fee options to a director (see note
5).





During the year ended December 31,
2008, the Company issued 3,000,000 shares and granted 500,000 stock options to a
company controlled by a former director (see note 5).  Also during the
year ended December 31, 2008, the Company issued 21,776,632 shares to two
directors in advance of the success fee which they will earn if the Colorep RTO
transaction closes (note 3).  These shares are held in escrow and will
be returned to treasury if the transaction is not completed.




9.        CAPITAL
MANAGEMENT





The
Company’s objective is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to allow the Company to complete
the RTO.  Management defines capital as the Company’s shareholders’
equity.





The
Company is not subject to any externally imposed capital
requirements.




10.      FINANCIAL
INSTRUMENTS





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





The
Company’s risk exposure and the impact on its financial instruments are
summarized below:





Credit
Risk





Credit
risk is the risk of loss associated with a counterparty’s inability to fulfil
its payment/contractual obligations.  The Company is exposed to credit
risk on its cash and sundry amounts receivable.  The Company has
deposited the cash with reputable Canadian financial institutions, from which
management believes the risk of loss is minimized.  Management
believes that credit risk concentration with respect to the financial
instruments included in sundry amounts receivable is remote.  As at
December 31, 2008, no sundry amounts receivable are considered past due or
impaired.




Page
18


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




10.      FINANCIAL
INSTRUMENTS(continued)





Liquidity Risk





The
Company’s approach to managing liquidity risks is to ensure that it will have
sufficient liquidity to meet liabilities when due.  As at December 31,
2008, the Company had a cash balance of $479,531 (2007 - $2,544,431) to settle
current liabilities of $50,450 (2007 - $82,887).





Market
risk





(a)
            Interest
      rate risk





The
Company has cash balances and a convertible debenture in Colorep Inc. bearing
interest at a fixed rate of 1.5% per month.  The Company’s current
policy is to invest excess cash in interest bearing bank accounts.





(b)
            Foreign
      currency risk





The
Company is exposed to foreign currency risk on fluctuations related to cash
balances, sundry amounts receivables the convertible debenture in Colorep Inc.,
and accounts payable and accrued liabilities which are denominated in US
dollars.





A 10%
change in the exchange rate of this currency, which management believes to be
reasonably possible within a 12 month period, would affect net loss by
approximately $300,000 with all other variables held constant.





(c)
            Price
      risk





The
Company is not exposed to price risk.




11.      COMPARATIVE
FIGURES





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




12.
            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
financial statements of the Company for the years ended December 31, 2008, 2007
and 2006 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.




Page
19


CARTHEW
BAY TECHNOLOGIES INC.


(Formerly
Astris Energi Inc.)


Notes
to the Financial Statements


December
31, 2008, 2007 and 2006
 (Canadian
Dollars)




12.
            DIFFERENCES BETWEEN
      CANADIAN AND UNITED STATES ACCOUNTING
  PRINCIPLES


(continued)





There
would be no adjustments needed to arrive at net income (loss) for the years
ended December 31, 2008, 2007 and 2006 if US GAAP were employed.
 Similarly, there would be no adjustments needed to arrive at shareholders’
equity as at December 31, 2008, 2007 and 2006 if US GAAP were employed.





New
US GAAP Accounting Pronouncements





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 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 financial
statements and separate from the parent’s equity.  The amount of net income
attributable to the noncontrolling interest will be included in 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
20