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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-49632

Solanex Management
Inc.(Name of small business issuer in its charter)

|Nevada                                                               | 98-0361151                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Suite 440                                                            | (604) 601-2107                      
|1555 E. Flamingo Road                                                | (Issuer's phone number)             
|Las Vegas, Nevada 89119                                              |                                     
|(Address of principal executive offices)                             |                                     

Securities registered under Section 12(b) of the Exchange
Act:None

Securities registered under Section 12(g) of the Exchange Act:
100,000,000 shares of common stock, par value $0.001 per share

Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act

Yes [ ] No [X ]

State issuers revenues for its most recent fiscal year:
$nil

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. $2,560,119

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 12,033,730
common shares as of February 15, 2008

Transitional Small Business Disclosure Format: Yes [ ] No [ X
]

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TABLE OF CONTENTS

|Part I     |                                                                                                                       | Page
|---------- | --------------------------------------------------------------------------------------------------------------------- | ----
|Item 1     | Description of Business                                                                                               | 3   
|Item 2     | Description of Property                                                                                               | 7   
|Item 3     | Legal Proceedings                                                                                                     | 8   
|Item 4     | Submission of Matters to a Vote of Security
      Holders                                                             | 8   
|           |                                                                                                                       |     
|Part II    |                                                                                                                       |     
|Item 5     | Market for Common Equity
      and Related Stockholder Matters                                                        | 8   
|Item 6     | Management's Discussion and Analysis or Plan
      of Operation                                                       | 9   
|Item 7     | Financial Statements                                                                                                  | 16  
|Item 8     | Changes In and Disagreements With Accountants
      on Accounting and Financial Disclosure                            | 30  
|Item 8A    | Controls and Procedures                                                                                               | 30  
|Item 8B    | Other Information                                                                                                     | 31  
|Part III   |                                                                                                                      
|Item 9     | Directors, Executive Officers, Promoters
      and Control Persons; Compliance With Section 16(a) of the Exchange Act | 31  
|Item 10    | Executive Compensation                                                                                                | 33  
|Item 11    | Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters                  | 34  
|Item 12    | Certain Relationships and Related Transactions                                                                        | 35  
|Item 13    | Exhibits                                                                                                              | 36  
|Item 14    | Principal Accountant Fees and Services                                                                                | 37  
|           |                                                                                                                       |     
|Signatures | 37                                                                                                                   

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

Corporate Background

Solanex Management Inc. was incorporated under the laws of the
State of Nevada on October 12, 2000 under the name Eco Soil Management Inc. We
changed our name to Solanex Management Inc. on December 6, 2001. To date, our
activities have been organizational in nature, directed at acquiring our
principal assets, raising capital, and implementing measures under our business
plan designed to position us to generate revenues.

Our business is divided into three areas: the development,
manufacture, and sale of Thermal Destructors; the development, manufacture, and
sale of portable Steam Injection System; and searching for and investing in
mineral resource properties.

Thermal Destructors

A Thermal Destructor is a self contained, mobile, soil residue
combustion system to be used for cleaning contaminated sites by sterilizing
soil. The Thermal Destructor consists of a high efficiency, waste or gas-fired
combustion chamber and a new generation, exhaust gas, low-pressure drop liquid
scrubber effective in trapping pollutants in air emissions. A common use of the
Thermal Destructor is what oilfield engineers refer to as post-op dirt
burning, the practice of cleaning up hydrocarbon spills at the end of the life
of a production well by passing the soil and substrate through a rotary kiln,
such as in our device, whereby the hydrocarbons are burned, delivering sterile
and cleaned soil and clay residues. We are able to offer customers services for
site clean up projects by contracting for such services with EcoTech Waste
Management Systems, Inc. (EcoTech), a company which will be discussed further
in this report.

On October 12, 2000, we acquired a license to certain
technology and intellectual property from a group of investors and the developer
of the technology, Colin V. Hall, our President and member of our board of
directors. The license granted a non-exclusive right to manufacture, market and
sell a thermal destructor for on-site soil remediation to industrial,
petrochemical and site remediation organizations. The intellectual property
acquired included all licensing, modification, marketing, distribution and sales
rights worldwide in perpetuity. Under the terms of the Agreement and License of
Intellectual Property Rights (the Destructor Agreement), Mr. Hall was
compensated two thousand ($2,000) dollars plus one million five hundred thousand
(1,500,000) shares of our common stock and the investors, a group of ten
individuals, were compensated an aggregate of two million (2,000,000) shares of
our common stock. The license granted a royalty payable to Mr. Hall in the
amount of seven (7%) percent of gross revenue derived from the sale or use of
the soil Thermal Destructor. We have not commenced commercial operations, have
generated no revenues, have no full-time employees, own no real estate and have
valued the intellectual property rights at $nil on our balance sheet for
accounting purposes.

Since our organization and initial acquisition, we have
struggled to raise money to develop our acquired technology and finance our
business plan. In adapting to a lack of financing, we have engaged in a number
of measures to stay in business. For example, we shifted focus from
manufacturing our thermal destructor at a cost of around $750,000 to less
expensive pursuits

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under our business plan including financing marketing efforts
in order to stimulate demand for our product. In an effort to reduce cash
expenditures, our management has served without compensation and we have
successfully negotiated stock payments in lieu of cash to repay several of our
trade creditors and loans provided by our shareholders. Although these efforts
have served to maintain our company as a going concern, we have not been able to
create enough investor interest in our original concept to sustain long-term
business operations.

The original Destructor Agreement provided that the license may
be revoked if we do not manufacture at least one Thermal Destructor within three
(3) years of the licensing date. We did not meet the manufacturing requirement;
however, the Destructor Agreement was subsequently renewed on a month to month
basis.

As a consequence of our inability to finance our business plan,
we have been looking for companies with better access to financing to partner
with and better expose our technology to its intended market. EcoTech has
assisted us in our quest to develop our technologies. We have also been
analyzing and searching for synergistic business opportunities that will allow
us to utilize our existing technology in other business applications. Our Steam
Injection technology, described below, is an example of these efforts. We have
also searched out other business opportunities as well and used our contacts
within the industry to diversify our business plan to attract financing.

Our Arrangement with ecoTech

ecoTECH Waste Management Systems (1991) Inc. (web URL
http://www.etwm.ca), is a Federal Canadian private company (presided over by Mr.
Hall), that has owned the Intellectual Property rights to the Thermal Destructor
since October 12, 2000.

On October 1, 2002 we entered into a joint venture agreement
with ecoTECH. Under that agreement, we agreed to shed certain business and
administrative responsibilities including product manufacturing, inventory
maintenance, and website development, thereby enabling our company to
concentrate more fully on marketing and sales efforts. Most integral under the
agreement, we contracted the responsibility of manufacturing the Thermal
Destructor to ecoTECH. In consideration for the services provided by ecoTECH, we
are required to pay $100,000 to ecoTECH h in cash or shares of stock over the
life of the agreement which is three (3) years. As of December 31, 2007 we have
paid $85,500 and accrued $14,500 in accounts payable towards fulfilling our
obligations under the agreement. We are still responsible for these remaining
amounts to ecoTECH, and hope to reconcile when we are financially capable of
doing so.

On May 23, 2006 we negotiated with ecoTECH and extended the
terms of our original joint venture agreement. Under the Strategic Alliance
Agreement, we defined the marketing responsibilities and, for an initial
customer, we agreed to pay $40,000 of the costs associated with these marketing
efforts and ecoTECH agreed to bear the balance of such costs. For each
subsequent customer, we agreed to bear $50,000 worth of costs or whatever
adjusted price is agreed upon between the parties on a later date. ecoTECH
remains responsible to build each Thermal Destructor unit for a cost not to
exceed $2,000,000 USD per unit. We agreed with ecoTECH to work together to
determine revenue sharing arrangements in connection with any sales.

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On September 29, 2006, aware that an ongoing relationship
between ourselves and ecoTECH was critical to achieving success, ecoTECH
assigned to us the full operating license rights to the Thermal Destructor and
an offshoot technology known as the Steam Injection System in exchange for
$2,000.

Steam Injection System

The Steam Injection System is a derivative technology from the
original high temperature Thermal Destructor combustion, being developed for use
by the oil sands and shale-heavy oil mining industry. It utilizes knowledge
gained from the development of the Thermal Destructor to create a quick
deployment, mobile high temperature, high pressure steam generation unit system
comprising of a train of vehicles.

The Steam Injection System is designed specifically for use in
oil fields where high-pressure steam can be injected into the oil formation to
soften the material in which the oil is trapped and to help dilute and separate
heavy oil from the earth. The injection of steam under high pressure also
creates channels and cracks through which the oil can flow to the well. This
latter example of application is a tertiary retrieval method, used to capture
oil from wells which have already been exhausted via primary and secondary means
of oil retrieval.

The most immediate market for a quick-deployment, mobile or
short term steam generation and delivery system such as our Steam Injection
System is to companies who are in the bitumen/heavy oil exploitation business.
Bitumen is a semisolid, degraded, tar-like form of oil that does not flow at
normal temperatures and pressures. Bitumen cannot be produced from a well unless
it is heated or diluted. Most of today's major commercial on-site projects use
steam to heat and dilute the bitumen.

There are two principal methods used under different reservoir
conditions. High-pressure steam is injected into the oil sands formation
(bitumen deposit) for several weeks. The heat softens the bitumen, while the
water vapor helps to dilute and separate the bitumen from the sand grains. The
pressure also creates channels and cracks through which the bitumen can flow to
the well. When a portion of the reservoir is thoroughly saturated, the steam is
turned off and the reservoir "soaks" for several weeks. This is followed by the
production phase, when the bitumen flows, or is pumped, up the same wells to the
surface. When production rates decline, another cycle of steam injection begins.
This process is sometimes called "huff and puff" recovery and only involves
vertical wells.

A variation of this method, developed by Shell Canada for the
Peace River oil sands, is known as the "soak radial" technique involving a
vertical well with four horizontal arms that extend spoke-like into the
reservoir. Steam is injected for two months, followed by six to eighteen months
of reverse action, during which oil is pumped to the surface through the same
horizontal arms. Pairs of parallel horizontal wells, one for steam injection and
one for production, make it possible to recover bitumen continuously from such
an oil formation.

Current steam generation systems are usually major structures
that produce large volumes of steam that is fed to a manifold from which steam
pipes lead to an array of wellheads. The steam is forced into the wells where it
heats up the porous strata containing the bitumen or heavy oil resource,
softening the oil (thermally reducing the viscosity), so it can be released to
flow like less dense crude oil. These systems have the limitations of being
stationary structures,

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necessarily over-sized and accordingly expensive. They have a
finite range, due to the limitations in pumping steam over long distances to
outlying wells, with the attendant dangers of large overland pressure pipes
subject to damage and potential rupture with the heavy machinery movements in
oil field operations. Also, distance results in an unwelcome steam temperature
drop in the cold ambient of a Northern Alberta winter.

Our Steam Injection System offers several advantages to the
current steam generation systems:

- Portability,
- Lower cost to manufacture,
- Efficiency of burner, and
- Flexibility of fuel required to create steam.

Because of these advantages, our Steam Injection System can
also be used to recover heavy oil from shale deposits. These deposits could not
previously be recovered profitably because of the expense of building large,
permanent steam generation units. This is yet another untapped market for our
Steam Injection System where we plan to focus our marketing efforts.

We estimate that it will require $3,500,000 to create a working
prototype Steam Injection System (SIS) to be sold, rented or leased to an oil
production company on a weekly, monthly or annual basis. We intend to obtain the
required financing for the manufacture of each system from the intended
customer. To date we have attracted no customers and have received no investor
interest in financing our business plan.

Our Arrangement with ecoTECH

Under the October 1, 2002 joint venture agreement, ecoTECH
agreed to search out and advise us on the development of technologies that may
complement our business plan with the Thermal Destructor. In fulfillment of that
contractual obligation, on October 12, 2006, ecoTECH signed an Addendum to the
May 23, 2006 Strategic Alliance Agreement. For consideration of $2,000 paid to
ecoTECH the parties agreed to expand our business relationship to include the
Steam Injection System, a portable high temperature steam generation technology,
and to jointly develop and market SISs for use across North America. Our
marketing costs and revenue sharing provisions under the Strategic Alliance
Agreement apply with equal force to both the Thermal Destructors and the Steam
Injection System technology.

Mineral Resource Properties

We have considered implementing steps which may include taking
our company into a new channel of business by way of actively seeking investment
opportunities in mineral resource properties. Such opportunities have previously
become available to us through our network of contacts in the mineral resources
sector. During 2006, we turned down an opportunity to acquire an option interest
in a sand and gravel deposit for payment of up to $75,000 over four years and
the issuance of up to 2,000,000 shares of common stock. Management believed that
acquiring the option at that stage was premature in our development and would
divert needed capital away from our core business pursuits. However, we intend
to continue our search in the resources sector and seize the right opportunity
when our capital position permits.

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Competition

Many of our potential competitors have longer operating
histories, larger customer or user bases, greater brand recognition and
significantly greater financial, marketing and other resources than we do as we
attempt to enter the marketplace. In addition, existing competitors may be
acquired by, receive investments from, or enter into other commercial
relationships with, larger well-established and well-financed companies.
Competitors have and may continue to adopt aggressive pricing or availability
policies and devote substantially more resources to technology and methodology
development than we do.

Intellectual Property

We recognize the need to file patents, trademarks and trade
names on the unique features of the technology we are developing. We currently
hold no such registrations of any intellectual property. We believe that we hold
significant patentable technology and intend to apply for intellectual property
protection through patents once our capital position permits such actions.

Government Regulation

There are no specific government regulations known to us, other
than standard business practice, law and conduct, which may affect us in
following our business plan. The use of our products may be subject to
regulation by one or more U.S. federal agencies, including the Federal Trade
Commission and the Environmental Protection Agency. These activities also may be
regulated by various agencies of the states, localities and foreign countries in
which potential applications of the technology are located.

Numerous U.S. federal and state government agencies have
demonstrated significant activity in promoting environmental protection and
enforcing other regulatory and disclosure statutes. Additionally, it is possible
that new laws and regulations may be enacted with respect to soil remediation.
The adoption of such laws or regulations and the applicability of existing laws
and regulations may impair our growth and result in a decline in our
prospects.

Employees

Currently, we have no employees and rely solely upon our
officers and directors to provide management and further our affairs. Management
devotes only a portion of their time to the affairs of our company. We contract
with individuals and companies to meet our needs for field operations,
promotional materials, administration and other products and services.

ITEM 2. DESCRIPTION OF PROPERTY

We currently maintain an office in two locations. The Companys
official address is 1555 East Flamingo Road, #440, in Las Vegas, Nevada. Mr.
Hall, our President, works out of his facilities located at 1786 Angus Campbell
Road, Abbotsford, British Columbia.

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ITEM 3. LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding. We are not
aware of any pending legal proceeding to which any of our officers, directors,
or any beneficial holders of 5% or more of our voting securities are adverse to
us or have a material interest adverse to us.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

No matters have been submitted to our security holders for a
vote, through the solicitation of proxies or otherwise, during the fourth
quarter of the fiscal year ended December 31, 2007.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Market Information

We are a reporting company with the United States Securities
and Exchange Commission: our shares of common stock are quoted on the OTCBB.

Holders of Our Common Stock

As of February 15, 2008 there were 12,033,730 shares of common
stock outstanding, held by 53 shareholders of record.

Dividend Policy

To date, we have not paid any dividends on our common stock and
do not expect to declare or pay any dividends on our common stock in the
foreseeable future. Payment of any dividends will be dependent upon future
earnings, if any, our financial condition, and other factors as deemed relevant
by our Board of Directors.

Recent Sales of Unregistered Securities

There were no issuances or sales of our securities with or
without registration during the last fiscal year. See Note 6 to our audited
financial statements for the fiscal year ended December 31, 2007 for more
information on previous sales of unregistered securities. No such sales involved
the use of an underwriter.

Equity Compensation Plans

On July 21, 2004 we registered our Performance Stock Plan (the
Plan) under the Securities Act of 1933 (the Act) for up to 1,000,000 stock
options which may be granted to employees, directors and consultants. We have
not granted any stock options since inception and there were no stock options
outstanding as of December 31, 2007.

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements, other than purely historical information,
including estimates, projections, statements relating to our business plans,
objectives, and expected operating results, and the assumptions upon which those
statements are based, are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words believes,
project, expects, anticipates, estimates, intends, strategy, plan,
may, will, would, will be, will continue, will likely result, and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.

Plan of Operation

Our plans for the next 12 months related to our Thermal
Destructor and our Steam Injection System are currently secondary to pursuing
financing.

Our Steam Injector System is designed to aid in heavy oil and
bitumen retrieval using technology derived from the Thermal Destructor. In order
to focus our resources in marketing the Steam Injection System for its intended
purpose and to cross-market our Thermal Destructor for potential clients in the
same industry (oil production) that are in need of soil contamination cleanup on
their old oil fields, we must obtain sufficient funding to cover our projected
working capital requirements. The Company continues to seek out other
opportunities in the resource sector which may become available to the Company
and which may be funded at levels of funding attainable by the Company.

Product Development

We intend to finalize the technical designs for our Steam
Injection System within the next twelve months, at which time we will begin the
sale and manufacture of Steam Injection Systems to oil companies who do or could
utilize steam injection as a method to recover oil held in Bitumen or

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oil sands. Our marketing program will begin in earnest prior to
the completion of the finalization of our technical designs.

During the coming year, we will also seek out other
applications for our technology, and may modify our product development plans
based on new applications and opportunities that arise.

We expect ecoTECH to:

- provide services that include analyses of operation of field units, in
  connection with our Thermal Destructor) operation; and
- be a liaison with site engineers for specifications of our Steam Injection
  System.
- design promotional materials and displays and assist management with the
  overall design of the Steam Injection System, its presentation and technology.
  We have a verbal arrangement to compensate our designer and expect to incur
  roughly $40,000 on our designer in the next twelve months. Colin Hall, the
  Companys president, will oversee the overall project, including design,
  marketing and finance.

Manufacturing

During the next year, we plan to contract with third parties to
manufacture and assemble our Steam Injection System according our technical
specifications. There are a number of manufacturing facilities capable of
producing technical products of this type and size. We have made initial
arrangements with TS2000-Star Vehicle Technologies Inc. (www.ts2000-star.com), a company that has production
facilities under construction in Malakwa, British Columbia in a joint venture
with Heromin, the North American arm of Yituo China Manufacturing Group (YTO).
YTO is a large company in China with approximately 52,000 employees (www.yto.com.cn). We are currently pursuing bids from
other manufacturing companies, and intend to sign a contract with at least one
company in the coming year.

The TS2000/Heromin Joint Venture has indicated that it may open
a U.S. facility in the Free Trade Zone at the Port of Bellingham, once the
Canadian operation is running smoothly in about 18 months. With assembly in
Bellingham of components manufactured in China (heavy steel components) and
others in the United States (controls, computer systems and electronics), an
alliance with this manufacturer should prove be very advantageous in our U.S.
operations and our Master USA license guarantees exclusivity to U.S. clients.

Because our Steam Injection System requires a significant
amount of capital to manufacture, we will not maintain a standing inventory of
products. As is customary with companies that develop and manufacture large
construction and/or mining equipment, each unit will be made to order,
manufactured to the customers specifications in order to meet their unique
needs. This not only provides the most appropriate product to our customer, but
allays our need to tie up large amounts of capital in inventory.

When a customer purchases one of our Steam Injection Systems,
we plan to send a field operations specialist to their operations site. Our
specialist will interview the customers engineers, survey the operations site,
and collect other relevant data. He will then provide our technicians and our
contract manufacturer with 3D terrain and site modeling and design
specifications based upon the customers needs. As our liaison with the
customers site engineers, he will provide information such as required delivery
temperatures and pressures, and

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pumping distances. He will also help determine the number of
systems we will need to supply to meet the customers needs for a particular
operations site.

Marketing

To date, interest in our technology has been generated through
the direct efforts of our executive officer, Mr. Hall, with engineers and
engineering firms servicing the oil production industry in North America.
Through this contact, Mr. Hall has been able to generate some positive interest
in our technology. Additionally, Mr. Hall is commencing a program to identify
marginal oil shale opportunities, from which oil could not previously be
profitably recovered because of the high fixed costs associate with building
large, permanent steam-generation units. By offering access to our technology,
which will make oil recovery from such properties a profitable operation, Mr.
Hall is seeking joint ventures with oil firms to bring those oil shale deposits
into production.

In the next twelve months, we intend to continue to use the
services of Mr. Hall to sell our technology, seeking joint ventures as well as
direct sales. If future sales justify the expense, however, we may employ sales
personnel to market our products to potential customers. These representatives
will be responsible for soliciting, selecting and securing opportunities within
a particular regional territory. We expect to pay such representatives on a
commission basis, with commissions depending on the size of the sale. We expect
to provide service and support to our representatives, including advertising,
technical data sheets, design services (usually bespoke and on a fee basis), and
sales materials. We do not intend to incur the costs of representation personnel
in the next twelve months unless our revenues are enough to absorb the cost of
these personnel, especially as it will be some months before we have field-ready
systems to offer.

Access International Matting (AIM) and Heromin Machinery
(Canada) will assist Mr. Hall in the development of an overall project marketing
plan and a project financial plan. The intention is to have the first customer
finance their initial plant, which it is anticipated will take nine months to
build. AIM has recently employed three people to develop the Heromin market and
we are to be represented by AIM on an ad-hoc, commission only basis, starting in
September 2008. A web site describing Solonex Management's services is under
construction and will be linked from the TS2000, ecoTECH, Heromin and AIM
sites.

We are also currently working with engineering firms that are
connected with steam stimulation or steam-assisted gravity drainage projects in
Alberta, Canada. We hope to secure an agreement in the next 12 months with one
or more of these firms on a project in Alberta. We anticipate that an
engineering firm will help us provide consulting on engineering and product
application needs, audit the finished systems performance, and with proven
performance, thereafter recommend the system to the firms clients, with an
option to invest in, or take over the program.

Financing Plans

The completion of our business plan for the next twelve months
is contingent upon us obtaining additional financing. As of December 31, 2007 we
had cash in the amount of $12,061. We have forecasted expenditures of $150,000
for the next twelve months. Therefore, we will require financing to pursue our
business plan for the next twelve months. We plan to offer equity securities in
an exempt offering as a means of meeting our financial requirements over the
next twelve months. Although neither Colin Hall, ecoTECH Waste Management
Systems (1991), Inc.

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nor any other shareholders or third parties have any legal
obligations to infuse additional capital, it is anticipated that each party will
continue to do so as reasonably necessary by providing short-term demand loans
carrying a market interest rate. If we are unable to obtain additional
financing, our business plan will be significantly delayed or will fail. Should
this failure to finance occur the Company would abandon its current business
plan.

We have not contacted any broker-dealers or other parties
regarding our financing plans but may do so in during 2008. We have not
identified any broker-dealers to assist in our financing efforts. Currently, we
believe we have the required funds to cover our expenses through the end of
April 2008. Our anticipated expenses for the following year are:

|Quarter 1  January/February/March 2008   
|------------------------------------------
|                                          
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|Quarter 2  April/May/June 2008           
|                                          
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|Quarter 3  July/August/September 2008    
|                                          
|                                          
|Quarter 4  October/November/December 2008
|                                          
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|                                          

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have been paid for and we hope the
initial sales and marketing program for our prototype will have been completed.

Results of Operations

For the 2007 fiscal year, we incurred a loss in the amount of
$141,668 compared to a loss of $229,755 in the previous year. Both years losses
are a result of organizational expenses and expenses associated with setting up
a company structure to begin implementing our business plan.

We are in the process of evaluating our technologys business
potential and incurred costs of $45,574 during the year ended December 31, 2007
to that end (compared to $113,606 during 2006). We anticipate that until these
procedures are completed, we will not generate revenues, and may continue to
operate at a loss thereafter, depending upon the performance of the
business.

At the fiscal year ended December 31, 2007 we had spent an
accumulated total of $100,000 towards the research and development of our
technology (no change from December 31, 2006). During the period from October
12, 2000 (date of incorporation) through December 31, 2007 we received no
revenues.

We have no commitments for capital expenditures. In the process
of carrying out our business plan, we may determine that we cannot raise
sufficient capital to support our business on acceptable terms, or at all.

Liquidity and Capital Resources

We remain in our developmental stage and, since inception, have
experienced no significant change in liquidity or capital resources. We expect
to carry out our plan of business as discussed above. The officers and directors
of our company will serve without compensation until we successfully achieve a
source of revenue.

The expenses of implementing our business plan will exceed our
current available funds. We will have to obtain additional funding through an
offering of our securities or through capital contributions from our
stockholders. From inception to date, we have settled $95,269 of accounts
payable by the issuance of 2,381,725 shares of our common stock. We settled
loans payable in the amount of $127,000 for the issuance of 1,044,300 shares and
issued 2,227,000 shares for $179,770 in cash.

During the year ended December 31, 2007 we raised $45,000 in
loans for total loans outstanding of $173,500 at December 31, 2007 (compared to
$128,500 at December 31, 2006) and issued nil shares of common stock (2006  we
issued 1,750,000 shares of common stock for proceeds to our company of
$175,000). Since we do not anticipate generating significant revenues over the
next year, we intend to depend upon equity financing through private placement
offerings of our common stock to fund the implementation of our business plan.
Over the longer term, two to five years, we expect to fund our operations
through a combination of revenues from the operation of our business and through
additional equity financing. To date, we have generated $nil revenue.

13

---

We will need additional capital to carry out our business
plans. No commitments to provide additional funds have been made by management
or other stockholders or investors. Accordingly, there can be no assurance that
any additional funds will be available on terms acceptable to us or at all.

Off Balance Sheet Arrangements

As of December 31, 2007 there were no off balance sheet
arrangements.

Going Concern

Since inception, we have suffered recurring losses and net cash
outflows from operations, and at December 31, 2007 have a working capital
deficiency of $318,206 (2006 - $176,313). We expect to continue to incur
substantial losses as we develop our business plan. Since inception, we have
funded operations through common stock issuances and accounts payable in order
to meet our strategic objectives. Management believes that sufficient funding
will be available to meet our business objectives including anticipated cash
needs for working capital and is currently evaluating several financing options.
However, there can be no assurance that we will be able to obtain sufficient
funds to continue the development of, and if successful, to commence the sale of
our products under development. As a result of the foregoing, there exists
substantial doubt about our ability to continue as a going concern. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list
their three to five most critical accounting polices in the Management
Discussion and Analysis. The SEC indicated that a critical accounting policy
is one which is both important to the portrayal of a companys financial
condition and results, and requires managements most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain. We believe that the following
accounting policies fit this definition.

a) Technology Development Costs

The costs to acquire and develop new technology and
enhancements to existing technology are expensed as incurred until such time as
technological feasibility is demonstrated.

b) Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
periods. Actual results could differ from these estimates.

c) Basic and Diluted Loss Per Share

The Company computes loss per share in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128  Earnings Per
Share (SFAS 128). Under the provisions of SFAS No. 128, basic loss per share
is computed using the weighted average number of common stock outstanding during
the period. Diluted loss per share is computed using the weighted average number
of common and potentially dilutive common stock outstanding during the

14

---

period. The basic and diluted loss per share are the same as
any exercise of options or warrants would be anti-dilutive.

d) Foreign Currency Translation

The Companys functional currency is the U.S. dollar. Transactions
  in foreign currency are translated into U.S. dollars as follows:
  i. monetary items at the rate prevailing at the balance sheet date;
  ii. non-monetary items at the historical exchange rate; 
  iii. revenue and expense items at the average rate in effect during the applicable
  accounting period.

e) Income Taxes

The Company has adopted SFAS No. 109  Accounting for Income
taxes (SFAS 109). This standard requires the use of an asset and liability
approach for financial accounting, and reporting on income taxes. If it is more
likely than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is recognized.

f) Financial Instruments

The Companys financial instruments consist of cash, accounts
payable and accrued liabilities, and loans payable.

Unless otherwise noted, it is managements opinion that the
Company is not exposed to significant interest or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.

The Company has adopted SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. SFAS No. 150 requires that an issuer classify a financial instrument
that is within its scope as a liability (or an asset in some circumstances). The
financial instruments affected includes certain obligations that can be settled
with shares of stock.

g) Stock Based Compensation

In December 2002, the Financial Accounting Standards Board
(FASB) issued SFAS No. 148, Accounting for Stock-Based Compensation 
Transition and Disclosure (SFAS No. 148), an amendment of SFAS No. 123
Accounting for Stock-Based Compensation (SFAS No. 123). The purpose of SFAS
No. 148 is to: (1) provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation, (2) amend the disclosure provisions to require prominent
disclosure about the effects on reported net income of an entitys accounting
policy decisions with respect to stock-based employee compensation, and (3)
require disclosure of those effects in interim financial information. The
disclosure provisions of SFAS No. 148 were effective for the Company from the
year ended December 31, 2004.

The Company has elected to account for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees,
(APB No. 25) and comply with the disclosure provisions of SFAS No. 123, as
amended by SFAS No. 148 as described above. In addition, in accordance with SFAS
No. 123, the Company applies the fair value method using the Black-Scholes
option-pricing model in accounting for options granted to consultants. Under APB
No. 25, compensation expense for employees is recognized based on the
difference, if any, on the date of

15

---

grant between the estimated fair value of the Companys stock
and the amount an employee must pay to acquire the stock. Compensation expense
is recognized immediately for past services and pro-rata for future services
over the option-vesting period. To December 31, 2006, the Company has not
granted any stock options.

ITEM 7. FINANCIAL STATEMENTS

SOLANEX MANAGEMENT INC.
  (A Development Stage Company) 
  FINANCIAL STATEMENTS
  (Stated in U.S. Dollars)

|Report of Independent Registered Public Accounting Firm                                          | 17
|------------------------------------------------------------------------------------------------ | --
|Balance Sheets as at December 31, 2007 and 2006                                                  | 19
|Statements of Operations for the years ended
      December 31, 2007 and 2006 and for the period |   
|from inception October 12, 2000 to December 31, 2007                                             | 20
|Statements of
      Cash Flows for the years ended December 31, 2007 and 2006 and for the period
|from inception October 12, 2000 to December 31, 2007                                             | 21
|Statement of Stockholder's Deficiency for
      the period from inception October 12, 2000 to    |   
|December 31, 2007                                                                                | 22
|Notes to Financial Statements                                                                    | 24

16

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors Solanex Management, Inc. Las
Vegas, Nevada

We have audited the accompanying balance sheet of Solanex Management,
  Inc. (A Development Stage Company) at December 31, 2007 and the related statements
  of operations, stockholders' equity (deficit) and cash flows for the year then
  ended and for the cumulative period from October 12, 2000 (date of inception)
  to December 31, 2007. 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. The financial statements of Solanex Management,
  Inc. as of December 31, 2006 and from October 12, 2000 (inception) to December
  31, 2006 were audited by other auditors whose report dated March 20, 2007, expressed
  an unqualified opinion on those statements.

We conducted our audit in accordance with the standards of the
  PCAOB (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 controls over financial
  reporting. Our audit included consideration of internal control over financial
  reporting as a basis for designing audit procedures that are appropriate in
  the circumstances, but not for the purpose of expressing an opinion on the effectiveness
  of the Company’s internal control over financial reporting. Accordingly,
  we express no such opinion. An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements. An audit
  also includes 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, the financial statements referred to above present
  fairly, in all material respects, the financial position of Solanex Management,
  Inc. at December 31, 2007 and the results of its operations and its cash flows
  for the year then ended and from October 12, 2000 (inception) through December
  31, 2007 in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has recorded significant losses from
operations, and is dependent on financing to continue operations, which together
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Chisholm, Bierwolf & Nilson, LLC Bountiful, Utah
March 25, 2008

17

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Stockholders and Directors of Solanex Management
Inc.(A Development Stage Company)

We have audited the accompanying balance sheet of Solanex Management
  Inc. (a development stage company) as of December 31, 2006 and the related statements
  of operations, cash flows, and stockholders’ deficiency for the year ended
  December 31, 2006 and for the cumulative period from October 12, 2000 (date
  of inception) to December 31, 2006. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Solanex Management
  Inc. as of December 31, 2006 and the results of its operations and its cash
  flows for the year ended December 31, 2006 and for the period from October 12,
  2000 (date of inception) to December 31, 2006, in conformity with accounting
  principles generally accepted in the United States of America.

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.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1(b)
to the financial statements, the Company has suffered recurring losses from
operations, has negative cash flows, has a stockholders deficiency and is
dependent upon obtaining adequate financing to fulfil its development
activities. These factors raise substantial doubt about its ability to continue
as a going concern. Managements plans in regard to these matters are also
discussed in Note 1(b). The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

|Vancouver, Canada | Morgan & Company   
|----------------- | ---------------------
|                  |                      
|March 20, 2007    | Chartered Accountants

18

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|BALANCE SHEETS               
|(Stated in U.S. Dollars)     

|                                                           |   | DECEMBER 31 |  
|---------------------------------------------------------- | - | ----------- | -
|                                                           |   | 2007        |  
|ASSETS                                                     |   |             |  
|Current                                                    |   |             |  
|Cash                                                       | $ | 12,061      |  
|Prepaid expense                                            |   | 1,147       |  
|Total current assets                                       |   | 13,208      |  
|Total assets                                               | $ | 13,208      |  
|LIABILITIES                                                |   |             |  
|Current                                                    |   |             |  
|Accounts payable
      and accrued liabilities             | $ | **139,124** |  
|Payable to related
      parties                           |   | **18,790**  |  
|Promissory notes payable (Note 5)                          |   | 173,500     |  
|Total current liabilities                                  |   | 331,414     |  
|Total liabilities                                          |   | 331,414     |  
|STOCKHOLDERS DEFICIENCY                                   |   |             |  
|Capital Stock(Note 6)                                      |   |             |  
|Authorized:                                                |   |             |  
|100,000,000 common shares, par value of $0.001 per share   |   |             |  
|20,000,000 preferred shares, par value of $0.001 per share |   |             |  
|Issued and outstanding:                                    |   |             |  
|Nil
      preferred shares                                 |   | -           |  
|12,033,730 common shares (2006  12,033,730)               |   | 12,034      |  
|Additional paid-in capital                                 |   | 395,005     |  
|Deficit accumulated during the development stage           |   | (725,245    | )
|Total stockholders
      deficiency                       |   | (318,206    | )
|**Total liabilities
      and stockholders’ deficiency**   | $ | 13,208      |  

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

19

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|STATEMENTS OF OPERATIONS     
|(Stated in U.S. Dollars)     

|                                              |   |             |   |   |             |   |   | CUMULATIVE  |  
|--------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                              |   |             |   |   |             |   |   | PERIOD FROM |  
|                                              |   |             |   |   |             |   |   | INCEPTION   |  
|                                              |   |             |   |   |             |   |   | OCTOBER 12  |  
|                                              |   | YEARS ENDED |   |   | 2000 TO     |  
|                                              |   | DECEMBER 31 |   |   | DECEMBER 31 |  
|                                              |   | 2007        |   |   | 2006        |   |   | 2007        |  
|                                              |   |             |   |   |             |   |   |             |  
|Revenue                                       | $ | -           |   | $ | -           |   | $ | -           |  
|                                              |   |             |   |   |             |   |   |             |  
|Expenses                                      |   |             |   |   |             |   |   |             |  
|Administration                                |   | 37,568      |   |   | 29,490      |   |   | 137,194     |  
|Consulting fees                               |   | 45,574      |   |   | 113,606     |   |   | 193,389     |  
|Feasibility
      study                       |   | -           |   |   | -           |   |   | 9,250       |  
|Foreign exchange
      loss                   |   | 1,075       |   |   | -           |   |   | 3,462       |  
|Office and rent                               |   | 19,045      |   |   | 47,039      |   |   | 149,988     |  
|Organization
      expenses                   |   | -           |   |   | -           |   |   | 6,228       |  
|Professional
      fees                       |   | 34,510      |   |   | 39,845      |   |   | 121,838     |  
|Technology cost                               |   | -           |   |   | -           |   |   | 100,000     |  
|                                              |   | 137,772     |   |   | 229,980     |   |   | 721,349     |  
|                                              |   |             |   |   |             |   |   |             |  
|Net loss from operations                      |   | (137,772    | ) |   | (229,980    | ) |   | (721,349    | )
|Other income (expense)                        |   |             |   |   |             |   |   |             |  
|Interest                                      |   | (3,896      | ) |   | -           |   |   | (3,896      | )
|Net loss before income taxes                  |   | (141,668    | ) |   | (229,980    | ) |   | (725,245    | )
|Income tax expense                            |   | -           |   |   | -           |   |   | -           |  
|                                              |   |             |   |   |             |   |   |             |  
|Net loss                                      | $ | (141,668    | ) | $ | (229,980    | ) | $ | (725,245    | )
|                                              |   |             |   |   |             |   |   |             |  
|                                              |   |             |   |   |             |   |   |             |  
|Basic And Diluted Loss Per Common
      Share |   |             |   |   |             |   |   |             |  
|                                              | $ | (0.01       | ) | $ | (0.02       | ) |   |             |  
|                                              |   |             |   |   |             |   |   |             |  
|                                              |   |             |   |   |             |   |   |             |  
|Weighted Average Number Of Common             |   |             |   |   |             |   |   |             |  
|**Shares
      Outstanding**                  |   | 12,033,730  |   |   | 11,200,511  |   |   |             |  

The accompanying notes are an integral part of the financial
statements

20

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|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|STATEMENTS OF CASH FLOWS     
|(Stated in U.S. Dollars)     

|                                                               |   |             |   |   |             |   |   | CUMULATIVE  |  
|-------------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                               |   |             |   |   |             |   |   | PERIOD FROM |  
|                                                               |   |             |   |   |             |   |   | INCEPTION   |  
|                                                               |   |             |   |   |             |   |   | OCTOBER 12  |  
|                                                               |   | YEARS ENDED |   |   | 2000 TO     |  
|                                                               |   | DECEMBER 31 |   |   | DECEMBER 31 |  
|                                                               |   | 2007        |   |   | 2006        |   |   | 2007        |  
|                                                               |   |             |   |   |             |   |   |             |  
|Cash Flows Used In Operating Activities                        |   |             |   |   |             |   |   |             |  
|Net loss for the
      period                                  | $ | (141,668    | ) | $ | (229,980    | ) | $ | (725,245    | )
|Adjustments to reconcile net
      income to net cash:         |   |             |   |   |             |   |   |             |  
|Expenses not paid with cash                                    |   | -           |   |   | -           |   |   | 7,387       |  
|Changes in assets and
      liabilities:                       |   |             |   |   |             |   |   |             |  
|Prepaid expense                                                |   | (1,147      | ) |   | -           |   |   | (1,147      | )
|Increase in accounts payable and accrued                       |   |             |   |   |             |   |   |             |  
|liabilities                                                    |   | 16,079      |   |   | 49,506      |   |   | 253,183     |  
|Net cash flow provided by operating activities                 |   | (126,736    | ) |   | (180,474    | ) |   | (465,822    | )
|                                                               |   |             |   |   |             |   |   |             |  
|Cash Flows Provided By Financing Activities                    |   |             |   |   |             |   |   |             |  
|Proceeds from
      issuance of common shares                  |   | -           |   |   | 175,000     |   |   | 264,998     |  
|Proceeds from loans payable                                    |   | 45,000      |   |   | 83,841      |   |   | 215,272     |  
|Net cash flow provided by financing activities                 |   | 45,000      |   |   | 258,841     |   |   | 480,270     |  
|                                                               |   |             |   |   |             |   |   |             |  
|Foreign Exchange Effect On Cash                                |   | -           |   |   | -           |   |   | (2,387      | )
|                                                               |   |             |   |   |             |   |   |             |  
|(Decrease) Increase In Cash                                    |   | (81,736     | ) |   | 78,367      |   |   | 12,061      |  
|                                                               |   |             |   |   |             |   |   |             |  
|Cash, Beginning Of Period                                      |   | 93,797      |   |   | 15,430      |   |   | -           |  
|                                                               |   |             |   |   |             |   |   |             |  
|Cash, End Of Period                                            | $ | 12,061      |   | $ | 93,797      |   | $ | 12,061      |  
|                                                               |   |             |   |   |             |   |   |             |  
|Supplemental Information of Cash-Flow
      Information        |   |             |   |   |             |   |   |             |  
|Cash paid for:                                                 |   |             |   |   |             |   |   |             |  
|Interest                                                       | $ | -           |   | $ | -           |   | $ | -           |  
|Income taxes                                                   |   | -           |   |   | -           |   |   | -           |  
|                                                               |   |             |   |   |             |   |   |             |  
|Supplemental Disclosure Of Non-Cash Financing
      Activities |   |             |   |   |             |   |  
|Common shares
      issued for the acquisition of              |   |             |   |   |             |   |   |             |  
|technology                                                     | $ | -           |   | $ | -           |   | $ | 3,500       |  
|Common shares on
      conversion of promissory notes          |   | -           |   |   | 10,000      |   |   | 26,772      |  
|Common shares issued for
      organization of the             |   |             |   |   |             |   |   |             |  
|Company                                                        |   | -           |   |   | -           |   |   | 1,500       |  
|Common shares issued to settle
      payables                  |   | -           |   |   | -           |   |   | 95,269      |  
|Common shares
      issued for share subscriptions             |   |             |   |   |             |   |   |             |  
|received                                                       |   | -           |   |   | 15,000      |   |   | 15,000      |  

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

21

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|SOLANEX MANAGEMENT INC.                                                    
|---------------------------------------------------------------------------
|(A Development Stage Company)                                              
|STATEMENT OF STOCKHOLDERS DEFICIENCY                                      
|PERIOD FROM OCTOBER 12, 2000 (DATE OF INCEPTION) TO
      DECEMBER 31, 2007

|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   | DEFICIT     |   |   |          |  
|--------------------------------- |  | ------------- | - | - | ------ | - | - | ----------- |  | - | ------------- |  | - | ----------- | - | - | -------- | -
|                                  |  | CAPITAL STOCK |   |   | SHARE  |   |   | ACCUMULATED |  |   |               | 
|                                  |  |               |   |   |        |   |   | ADDITIONAL  |  |   | SUBSCRIPTIONS |  |   | DURING THE  |   |   |          |  
|                                  |  | COMMON        |   |   |        |   |   | PAID-IN     |  |   | RECEIVED      |  |   | DEVELOPMENT |   |   |          |  
|                                  |  | SHARES        |   |   | AMOUNT |   |   | CAPITAL     |  |   | (RECEIVABLE)  |  |   | STAGE       |   |   | TOTAL    |  
|Balance, October 12, 2000         |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|(Date of inception)               |  | -             |   | $ | -      |   | $ | -           |  | $ | -             |  | $ | -           |   | $ | -        |  
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Stock issued for $1,500 of        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|organization expenses,            |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|October, 2000 at $0.001
      per |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|share                             |  | 1,500,000     |   |   | 1,500  |   |   | -           |  |   | -             |  |   | -           |   |   | 1,500    |  
|Stock issued for technology,      |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|October, 2000 at $0.001 per       |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|share                             |  | 3,500,000     |   |   | 3,500  |   |   | -           |  |   | -             |  |   | -           |   |   | 3,500    |  
|Net loss for the period           |  | -             |   |   | -      |   |   | -           |  |   | -             |  |   | (10,758     | ) |   | (10,758  | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Balance, December 31, 2000        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|                                  |  | 5,000,000     |   |   | 5,000  |   |   | -           |  |   | -             |  |   | (10,758     | ) |   | (5,758   | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Net loss for the year             |  | -             |   |   | -      |   |   | -           |  |   | -             |  |   | (470        | ) |   | (470     | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Balance, December 31, 2001        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|                                  |  | 5,000,000     |   |   | 5,000  |   |   | -           |  |   | -             |  |   | (11,228     | ) |   | (6,228   | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Net loss for the year             |  | -             |   |   | -      |   |   | -           |  |   | -             |  |   | (26,972     | ) |   | (26,972  | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Balance, December 31, 2002        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|                                  |  | 5,000,000     |   |   | 5,000  |   |   | -           |  |   | -             |  |   | (38,200     | ) |   | (33,200  | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Stock issued for cash in 2003 at  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|$0.01 per share                   |  | 310,000       |   |   | 310    |   |   | 2,790       |  |   | -             |  |   | -           |   |   | 3,100    |  
|Stock issued for accounts         |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|payable in 2003 at $0.04 per      |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|share                             |  | 2,548,725     |   |   | 2,549  |   |   | 94,390      |  |   | -             |  |   | -           |   |   | 96,939   |  
|Stock cancelled, December,        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|2003                              |  | (750,000      | ) |   | (750   | ) |   | 750         |  |   | -             |  |   | -           |   |   | -        |  
|Net loss for the year             |  | -             |   |   | -      |   |   | -           |  |   | -             |  |   | (120,637    | ) |   | (120,637 | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Balance, December 31, 2003        |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|                                  |  | 7,108,725     |   |   | 7,109  |   |   | 97,930      |  |   | -             |  |   | (158,837    | ) |   | (53,798  | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Stock issued on conversion of     |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|promissory notes, April           |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|2004 at $0.04 per share           |  | 419,300       |   |   | 419    |   |   | 16,353      |  |   | -             |  |   | -           |   |   | 16,772   |  
|Share subscriptions               |  | -             |   |   | -      |   |   | -           |  |   | 85,228        |  |   | -           |   |   | 85,228   |  
|Net loss for the year             |  | -             |   |   | -      |   |   | -           |  |   | -             |  |   | (116,609    | ) |   | (116,609 | )
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|                                  |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  
|Balance, December 31, 2004        |  | 7,528,025     |   | $ | 7,528  |   | $ | 114,283     |  | $ | 85,228        |  | $ | (275,446    | ) | $ | (68,407  | )
|(Stated in U.S. Dollars)          |  |               |   |   |        |   |   |             |  |   |               |  |   |             |   |   |          |  

22

---

|SOLANEX MANAGEMENT INC.                                                    
|---------------------------------------------------------------------------
|(A Development Stage Company)                                              
|STATEMENT OF STOCKHOLDERS DEFICIENCY (Continued)                          
|PERIOD FROM OCTOBER 12, 2000 (DATE OF INCEPTION) TO
      DECEMBER 31, 2007
|(Stated in U.S. Dollars)                                                   

|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   | DEFICIT     |   |   |          |  
|-------------------------------- |  | ------------- |  | - | ------ |  | - | ----------- |  | - | ------------- | - | - | ----------- | - | - | -------- | -
|                                 |  | CAPITAL STOCK |  |   | SHARE  |  |   | ACCUMULATED |  |   |               |  
|                                 |  |               |  |   |        |  |   | ADDITIONAL  |  |   | SUBSCRIPTIONS |   |   | DURING THE  |   |   |          |  
|                                 |  | COMMON        |  |   |        |  |   | PAID-IN     |  |   | RECEIVED      |   |   | DEVELOPMENT |   |   |          |  
|                                 |  | SHARES        |  |   | AMOUNT |  |   | CAPITAL     |  |   | (RECEIVABLE)  |   |   | STAGE       |   |   | TOTAL    |  
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Balance, December 31,            |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|2004                             |  | 7,528,025     |  | $ | 7,528  |  | $ | 114,283     |  | $ | 85,228        |   | $ | (275,446    | ) | $ | (68,407  | )
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Stock issued on conversion       |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|of share subscriptions,          |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|September, 2005 at
      $0.04   |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|per share                        |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|                                 |  | 2,130,705     |  |   | 2,131  |  |   | 83,097      |  |   | (85,228       | ) |   | -           |   |   | -        |  
|Share subscriptions              |  | -             |  |   | -      |  |   | -           |  |   | 15,000        |   |   | -           |   |   | 15,000   |  
|Net loss for the year            |  | -             |  |   | -      |  |   | -           |  |   | -             |   |   | (78,151     | ) |   | (78,151  | )
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Balance, December 31,            |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|2005                             |  | 9,658,730     |  |   | 9,659  |  |   | 197,380     |  |   | 15,000        |   |   | (353,597    | ) |   | (131,558 | )
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Stock issued for cash,           |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|February, 2006 at $0.10          |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|per share                        |  | 1,000,000     |  |   | 1,000  |  |   | 99,000      |  |   | (15,000       | ) |   | -           |   |   | 85,000   |  
|Stock issued for cash,           |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|February, 2006 at $0.04          |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|per share                        |  | 375,000       |  |   | 375    |  |   | 14,625      |  |   | -             |   |   | -           |   |   | 15,000   |  
|Stock issued for promissory      |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|notes, June, 2006 at
      $0.04 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|per share                        |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|                                 |  | 250,000       |  |   | 250    |  |   | 9,750       |  |   | -             |   |   | -           |   |   | 10,000   |  
|Stock issued for cash,           |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|September, 2006 at
      $0.10   |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|per share                        |  | 750,000       |  |   | 750    |  |   | 74,250      |  |   | -             |   |   | -           |   |   | 75,000   |  
|Net loss for the year            |  | -             |  |   | -      |  |   | -           |  |   | -             |   |   | (229,980    | ) |   | (229,980 | )
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Balance, December 31,            |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|2006                             |  | 12,033,730    |  | $ | 12,034 |  | $ | 395,005     |  | $ | -             |   | $ | (583,577    | ) | $ | (176,538 | )
|                                 |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|Net loss for the year            |  | -             |  |   | -      |  |   | -           |  |   | -             |   |   | (141,668    | ) |   | (141,668 | )
|Balance, December 31,            |  |               |  |   |        |  |   |             |  |   |               |   |   |             |   |   |          |  
|2007                             |  | 12,033,730    |  | $ | 12,034 |  | $ | 395,005     |  | $ | -             |   | $ | (725,245    | ) | $ | (318,206 | )

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

23

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|1. | NATURE OF OPERATIONS AND GOING CONCERN      
|-- | --------------------------------------------
|   |                                             
|   | a)                                          
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   | b)                                          
|   |                                             
|   |                                             
|   |                                             
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES
|   |                                             
|   | a)                                          
|   |                                             
|   |                                             
|   |                                             
|   | b)                                          
|   |                                             
|   |                                             
|   |                                             
|   | c)                                          
|   |                                             
|   |                                             

24

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | d) Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company computes loss per share in accordance with
      Statement of Financial Accounting Standards (SFAS) No. 128  Earnings
      Per Share (SFAS 128). Under the provisions of SFAS No. 128, basic loss
      per share is computed using the weighted average number of common stock
      outstanding during the period. Diluted loss per share is computed using
      the weighted average number of common and potentially dilutive common
      stock outstanding during the period. Basic and diluted loss per share are
      the same as any exercise of options or warrants would be anti-dilutive.
      The Company currently has no stock dilutives. Earnings per share have been
      calculated as follows:

2007
    2006Numerator:
    Net loss
    $141,668
    $229,980Denominator:
    Weighted average number of shares issued
    12,033,730
    11,200,511Earnings (loss) per share
    $(0.01)
    $(0.02)


| | e) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The Companys functional currency is the U.S. dollar.
      Transactions in foreign currency are translated into U.S. dollars as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | f) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The Companys financial instruments consist of cash,
      accounts payable and accrued liabilities, and loans payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Unless otherwise noted, it is managements opinion that
      the Company is not exposed to significant interest or credit risks arising
      from these financial instruments. The fair value of these financial
      instruments approximate their carrying values, unless otherwise
    noted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The Company has adopted SFAS No. 150, Accounting for
      Certain Financial Instruments with Characteristics of both Liabilities and
      Equity. This Statement establishes standards for how an issuer classifies
      and measures certain financial instruments with characteristics of both
      liabilities and equity. SFAS No. 150 requires that an issuer classify a
      financial instrument that is within its scope as a liability (or an asset
      in some circumstances). The financial instruments affected includes
      certain obligations that can be settled with shares of stock.                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | g) | Stock Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In December 2002, the Financial Accounting Standards
      Board (FASB) issued SFAS No. 148, Accounting for Stock-Based
      Compensation  Transition and Disclosure (SFAS No. 148), an amendment
      of SFAS No. 123 Accounting for Stock-Based Compensation (SFAS No.
      123). The purpose of SFAS No. 148 is to: (1) provide alternative methods
      of transition for an entity that voluntarily changes to the fair value
      based method of accounting for stock-based employee compensation, (2)
      amend the disclosure provisions to require prominent disclosure about the
      effects on reported net income of an entitys accounting policy decisions
      with respect to stock- based employee compensation, and (3) require
      disclosure of those effects in interim financial

25

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | RECENT ACOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In September 2006, the FASB issued SFAS No.
        158, Employers Accounting for Defined Benefit Pension and Other
        Postretirement Plans. We will be required to fully recognize the assets
        and obligations associated with any defined benefit plan which we may
        put in place. Effective for our fiscal year ending 2008, we will be required
        to measure a plans assets and liabilities as of the end of the fiscal
        year instead of our current measurement date of September 30. Currently
        there is no impact from this standard on our consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In February 2007, the Financial Accounting
        Standards Board (FASB) issued SFAS No. 159, The Fair Value
        Option for Financial Assets and Financial Liabilities, including an amendment
        of FASB Statement No. 115(SFAS 159), which allows an
        entity the irrevocable option to elect fair value for the initial and
        subsequent measurement for certain financial assets and liabilities under
        an instrument- by-instrument election. Subsequent measurements for the
        financial assets and liabilities an entity elects to fair value will be
        recognized in earnings. SFAS 159 also establishes additional disclosure
        requirements. SFAS 159 is effective for fiscal years beginning after November
        15, 2007, with early adoption permitted provided that the entity also
        adopts SFAS 157. We have not yet determined the impact this standard will
        have on our financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In December 2007, the FASB issued SFAS No.
        160, Non Controlling Interests in Consolidated Financial Statements
         an amendment of ARB no. 51. This statements objective is to
        improve the relevance, comparability, and transparency of the financial
        information that a reporting entity provides in its consolidated financial
        statements by establishing accounting and reporting standards that require
        ownership interests in the subsidiaries held by parties other than the
        parent be clearly identified. The adoption of SFAS 160 did not have an
        impact on the Companys financial statements.                                                                                                                                                                                                                                                                                                             

26

---

|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|3. | RECENT ACOUNTING PRONOUNCEMENTS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In December 2007, the FASB issued SFAS No. 141 (revised),
      Business Combinations. This revision statements objective is to
      improve the relevance, representational faithfulness, and comparability of
      the information that a reporting entity provides in its effects on
      recognizing identifiable assets and measuring goodwill. The adoption of
      SFAS 141 (revised) did not have an impact on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | LICENSE AND TECHNOLOGY RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On October 12, 2000 the Company acquired a license to
      certain technology and intellectual property from Colin V. Hall, the
      developer of the technology, and a group of investors. The license granted
      a non-exclusive right to manufacture, market and sell a thermal destructor
      (soil Remediator) for on site remediation to industrial, petrochemical
      and site remediation organizations. The technology and intellectual
      property acquired included all licensing, modification, marketing,
      distribution and sales rights worldwide in perpetuity. Under the terms of
      the Agreement and License, a cash payment of $2,000 was made on behalf of
      the Company and the Company issued 3,500,000 shares of common
  stock.                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On October 1, 2002, the Company entered into a joint
      venture agreement (the Agreement) with EcoTech Waste Management Systems
      (1991) Inc. (EcoTech) to design the systems for the soil Remediator and
      provide marketing and business concept expertise. Under the terms of the
      Agreement, EcoTech will evaluate, improve and complete the assets of the
      Company, and market and/or find customers for the assets of the Company.
      Furthermore, EcoTech will search for, recommend and advise the Company on
      the acquisition of further technology, complementary to the current
      business direction and assets of the Company. In consideration for the
      services provided by EcoTech, the Company is required to pay $100,000 to
      EcoTech over the life of the contract (3 years), in cash or common
      stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | As of December 31, 2006, the Company had paid $85,500 to
      EcoTech, and the remaining $14,500 is included in accounts payable and
      accrued liabilities. This agreement is being renegotiated by both
      parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On May 23, 2006, the Company entered into a joint venture
      with EcoTech (the Strategic Alliance Agreement) to develop a portable
      soil remediation system to clean soils contaminated by industrial use. The
      Company agreed to pay $40,000 in marketing costs for the initial customer
      (increasing to $50,000 for each subsequent customer).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Further, EcoTech agreed to build portable high
      temperature burner units for a cost not to exceed $2 million per unit. The
      Company would then be the exclusive distributor under revenue sharing
      arrangements to be negotiated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On October 12, 2006, the Company and EcoTech signed an
      addendum to the Strategic Alliance Agreement, whereby, in consideration
      for $2,000 to be paid to EcoTech, the parties agreed to expand their
      business relationship to include portable high temperature steam
      generation technology and to market portable high temperature burner
      gasifier systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Companys president, Colin Hall, is also a principal
      of EcoTech.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company has not recorded any capitalized costs for
      any licensed technology at December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

27

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|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|5. | PROMISSORY NOTES PAYABLE
|-- | ------------------------

The promissory notes may be converted in whole or in part into
  common shares of the Company at the option of the lender(s) at a mutually agreed
  price per share. The promissory notes are unsecured and bear no interest and
  are due on demand. Management has imputed interest at 8% and accrued the interest
  in the event of conversion.

| |                                                             |               |   | 2007    |  |   | 2006     | 
| | ----------------------------------------------------------- | ------------- | - | ------- |  | - | -------- | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 5,000   |  | $ | 5,000    | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 7,000   |  | $ | 7,000    | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 8,000   |  | $ | 8,000    | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 5,000   |  | $ | 5,000    | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 6,000   |  | $ | 6,000    | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 12,500  |  | $ | 12,500   | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 50,000  |  | $ | 50,000   | 
| | Promissory note  unsecured, bears interest
      at 2% and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 35,000  |  | $ | 35,000   | 
| | Promissory note  unsecured, non interest bearing
      and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 25,000  |  | $ | -        | 
| | Promissory note  unsecured, non interest bearing
      and |               |   |         |  |   |         
| |                                                             | due on demand | $ | 20,000  |  | $ | -        | 
| |                                                             |               |   |         |  |   |          | 
| |                                                             | Total         | $ | 173,500 |  | $ | $128,500 | 

|6. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | No preferred shares have been issued. The preferred
        shares have been authorized without terms. The terms of the preferred
        shares will be set by the Companys board of directors as , if and
        when the preferred shares are issued.                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On October 12, 2000, the Company issued 3,500,000 shares
        of common stock at $0.001 per share in compensation for the acquisition
        of a license agreement to certain technology and intellectual property,
        and issued 1,500,000 shares of common stock at $0.001 per share in compensation
        for organizational expenses.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In 2003, the Company issued 310,000 restricted shares
        of common stock at $0.01 per share pursuant to a private placement in
        the amount of $3,100, and issued 281,725 free trading and 2,267,000 restricted
        shares of common stock for settlement of a $96,939 payable.                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On December 1, 2003, the Company acquired and cancelled
        750,000 restricted shares of common stock for the consideration of $1.00.                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On April 12, 2004, the Company issued 419,300 shares
        of common stock at $0.04 per share in settlement of $16,772 in promissory
        notes payable.                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On September 30, 2005, the Company recorded the issuance
        of 2,130,705 common shares at $0.04 per share in settlement of share subscriptions
        received by the Company on October 1, 2004.                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On February 9, 2006, the Company issued 1,000,000 shares
        of common stock at $0.10 per share pursuant to a private placement in
        the amount of $100,000 and issued 375,000 shares for cash at $0.04 in
        the amount of $15,000.                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On June 9, 2006, the Company issued 250,000 shares of
        common stock at $0.04 per share in settlement of a $10,000 promissory
        note payable.                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On September 28, 2006, the Company issued 750,000 restricted
        shares of common stock at $0.10 per share pursuant to a private placement
        in the amount of $75,000.                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|7. | STOCK OPTIONS                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On July 21, 2004, the Company registered its Performance
        Stock Plan (the Plan), under the Securities Act of 1933 (the
        Act), for up to 1,000,000 stock options, which may be granted
        to employees, directors and consultants. The Company has not granted any
        stock options since inception and there were no stock options outstanding
        as of December 31, 2007.

28

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|SOLANEX MANAGEMENT INC.      
|-----------------------------
|(A Development Stage Company)
|NOTES TO FINANCIAL STATEMENTS
|DECEMBER 31, 2007            
|(Stated in U.S. Dollars)     

|8. | RELATED PARTY TRANSACTIONS AND AMOUNTS
  OWING                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                          
|   | During the year ended December 31, 2007 the Company
      carried out a number of transactions with related parties in the normal
      course of business. These transactions were recorded at their exchange
      amount, which is the amount of consideration established and agreed to by
      the related parties.
|   |                                                                                                                                                                                                                                                                                                                          
|   | Except as disclosed elsewhere in these notes, following
      are related party transactions and amounts owing:                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                          
|   | As of December 31, 2007, $14,500 (2006 - $14,500) was
      owing to EcoTech, of which the President of the Company is a principal,
      and $4,290 (2006 - $4,290) was owing to the President. These amounts are
      included in accounts payable and accrued liabilities.                                           
|   |                                                                                                                                                                                                                                                                                                                          
|   | The Company currently has no employees and relies upon
      its officers and directors to further its affairs. The officers and
      directors provide services to the Company without any
  compensation.                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                          
|9. | INCOME TAXES                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                          
|   | A reconciliation of statutory federal income tax rates to
      the Companys effective tax rate is as
follows:                                                                                                                                                                                                          

| |                                               |   | 2007    |   |   | 2006    |  
| | --------------------------------------------- | - | ------- | - | - | ------- | -
| |                                               |   |         |   |   |         |  
| | Expected tax recovery at 34%                  | $ | (46,400 | ) | $ | (79,560 | )
| | Change in valuation allowance                 |   | 46,400  |   |   | 79,560  |  
| | Income tax provision                          | $ | -       |   | $ | -       |  
| | The Company was not taxable in 2006 and 2005. |   |         |   |   |         |  

Deferred tax assets at December 31 were
as follows:

| |                                     |   | 2007     |   |   | 2006     |  
| | ----------------------------------- | - | -------- | - | - | -------- | -
| |                                     |   |          |   |   |          |  
| | Gross tax deferred asset            |   |          |   |   |          |  
| | Operating loss
      carry forwards | $ | 136,000  |   | $ | 230,000  |  
| | Valuation allowance                 |   | (136,000 | ) |   | (230,000 | )
| |                                     |   |          |   |   |          |  
| | Net deferred tax asset              | $ | -        |   | $ | -        |  

The Company has net operating losses
carried forward of approximately $720,000 (2006 - $584,000) and has provided a
full valuation allowance due to the uncertainty of the utilization of the
benefits of these losses which begin to expire in 2021.

|10. | CONTRACTUAL OBLIGATIONS AND COMMITMENTS                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                     
|    | The Company has no significant contractual obligations
        or commitments with any parties respecting executive compensation, consulting
        arrangements, rental premises or other matters, except as disclosed elsewhere
        in these notes. Management services provided and rental of premises are
        on a month to month basis

| |           |         |         | 
| | --------- | ------- | ------- | 
| |           | 2007    | 2006    | 
| | Rent paid | $16,700 | $26,400 | 



29

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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

There are no reportable disagreements on accounting or
financial disclosure issues. Effective December 31, 2007 Morgan and Company,
Chartered Accountants, resigned as the principal accountant engaged to audit the
financial statements of Solanex Management Inc. (the "Company"). Morgan and
Company performed the December 31, 2006 and 2005 audits of the Company's
financial statements. During this period and the subsequent interim period prior
to their resignation, there were no disagreements with Morgan and Company on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements if not resolved to Morgan and
Companys satisfaction would have caused Morgan and Company to make reference to
this subject matter of the disagreements in connection with Morgan and Companys
audit report, nor were there any "reportable events" as such term is defined in
Item 304(a)(1)(iv) of Regulation S-K, promulgated under the Securities Exchange
Act of 1934, as amended ("Regulation S-K").

In February 2008 the Company engaged Chisholm, Bierwolf &
Nilson, LLC to audit the Company's financial statements for the year ended
December 31, 2007. Prior to its engagement, the Company had not consulted with
Chisholm, Bierwolf & Nilson with respect to: (i) the application of
accounting principles to a specified transaction, either completed or proposed;
(ii) the type of audit opinion that might be rendered on the Company's financial
statements; or (iii) any matter that was either the subject or disagreement (as
defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as
described in Item 304(a)(1)(iv) of Regulation S-K). The Board of Directors of
the Company approved the change in accountants described herein and Chisholm,
Bierwolf & Nilson performed the audit of the Company's December 31, 2007
financial statements.

ITEM 8A. CONTROLS AND PROCEDURES

We carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2007. This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, Mr. Colin V. Hall. Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of December 31, 2007, our disclosure controls and procedures
are effective. There have been no significant changes in our internal controls
over financial reporting during the quarter ended December 31, 2007 that have
materially affected or are reasonably likely to materially affect such controls.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

30

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Limitations on the Effectiveness of Internal
Controls

Our management does not expect that our disclosure controls and
procedures or our internal control over financial reporting will necessarily
prevent all fraud and material error. Our disclosure controls and procedures are
designed to provide reasonable assurance of achieving our objectives and our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective at that reasonable assurance
level. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the internal control. The design of any system of controls also is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions. Over time, control may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate.

ITEM 8B. OTHER INFORMATION

**Management’s Report on Internal Control Over
  Financial Reporting.**

Internal control over financial reporting refers to the process
  designed by, or under the supervision of, our Chief Executive Officer and effected
  by our Board of Directors, management and other personnel, 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, and includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail accurately
      and fairly reflect the transactions and dispositions of our assets;
- Provide reasonable assurance that transactions are recorded as necessary
      to permit preparation of financial statements in accordance with generally
      accepted accounting principles, and that our receipts and expenditures are
      being made only in accordance with authorization of our management and directors;
      and
- Provide reasonable assurance regarding prevention or timely detection
      of unauthorized acquisitions, use or disposition of our assets that could
      have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute
  assurance of achieving financial reporting objectives because of its inherent
  limitations. It is a process that involves human diligence and compliance and
  is subject to lapses in judgment and breakdowns resulting from human failures.
  It also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material
  misstatements may not be prevented or detected on a timely basis by internal
  control over financial reporting. However, these inherent limitations are known
  features of the financial reporting process. Therefore, it is possible to design
  into the process certain safeguards to reduce, thought not eliminate, this risk.
  Management is responsible for establishing and maintaining adequate internal
  control over our financial reporting.

Based upon their assessment, management has concluded that
  our internal control over financial reporting was effective as of and for the
  year ended December 31, 2007.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS

This table sets forth the name, age and position of each
director and executive officer of the Company:

Name
    Age
    Position(s) and Office(s) HeldColin V. Hall
    62
    President and Director


Colin V. Hall  Director

Mr. Hall was born and educated in England, and has diplomas in
design, graphics, technology and management. He is an innovative designer of
chemical and pollution abatement processing systems and machinery, thermal
devices, power generation systems, heavy vehicles, transport and handling
equipment, machinery and processing systems for the past 25 years. Over the past
15 years his abilities have been directed towards the development of fully
integrated systems for waste management, reduction and processing. He is a
recognized expert in the design and development of environmental control and
processing systems. He led the development and promotion of the Western
Renewable Fuels project for four years in the 1990's. Mr. Hall has been
President of EcoTerra Remediation Systems Inc. for the last two years, and is
the CEO of EcoTech Waste Management Systems (1991) Inc., a company he founded in
1980. He designed

31

---

EcoTech's integrated system for waste management, reduction and
processing and has made many improvements on existing designs for components of
environmental remediation systems.

Significant Employees

Mr. Todd Ingram is the Secretary of our company and performs
administrative functions. He has a Bachelors of Business Administration and has
completed studies in advanced Business Management. He has a varied background
with public and private companies working in marketing, sales, and advanced
administration including setup and design of corporate structure. Mr. Ingram was
paid $nil in consulting fees during the year ended December 31, 2007 ($17,000
during 2006).

Family Relationships

There are no family relationships between or among the
directors, executive officers or persons nominated or chosen by us to become
directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past five years, none
of the following occurred with respect to a present or former director,
executive officer, or employee: (1) any bankruptcy petition filed by or against
any business of which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior to that time; (2)
any conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offences); (3) being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his or her involvement in
any type of business, securities or banking activities; and (4) being found by a
court of competent jurisdiction (in a civil action), the SEC or the Commodities
Futures Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.

Audit Committee

We do not have a separately-designated standing audit
committee. The entire board of directors performs the functions of an audit
committee, but no written charter governs the actions of the board of directors
when performing the functions that would generally be performed by an audit
committee. The board of directors approves the selection of our independent
accountants and meets and interacts with the independent accountants to discuss
issues related to financial reporting. In addition, the board of directors
reviews the scope and results of the audit with the independent accountants,
reviews with management and the independent accountants our annual operating
results, considers the adequacy of our internal accounting procedures and
considers other auditing and accounting matters including fees to be paid to the
independent auditor and the performance of the independent auditor.

We do not have an audit committee financial expert because of
the size of our company and our board of directors at this time. We believe that
we do not require an audit committee financial expert at this time because we
retain outside consultants who possess these attributes.

32

---

For the fiscal year ending December 31, 2007 the board of
directors:

Reviewed and discussed the audited financial statements with
management, and

Reviewed and discussed the written disclosures and the letter
from our independent auditors on the matters relating to the auditor's
independence.

Based upon the board of directors review and discussion of the
matters above, the board of directors authorized inclusion of the audited
financial statements for the year ended December 31, 2007 to be included in this
Annual Report on Form 10-KSB and filed with the Securities and Exchange
Commission.

Section 16(a) Beneficial Ownership Reporting
Compliance

Section 16(a) of the Exchange Act requires our directors and
executive officers and persons who beneficially own more than ten percent of a
registered class of the Companys equity securities to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Company. Officers, directors and greater than ten
percent beneficial shareholders are required by SEC regulations to furnish us
with copies of all Section 16(a) forms they file. To the best of our knowledge
based solely on a review of Forms 3, 4, and 5 (and any amendments thereof)
received by us during or with respect to the year ended December 31, 2007 the
following persons have failed to file, on a timely basis, the identified reports
required by Section 16(a) of the Exchange Act during fiscal year ended December
31, 2006:

Name and principal position
    Number of late reports
    Transactions not timely reported
    Known failures to file a required
      formColin V. Hall President and Director
    0
    0
    1EcoTech Waste Management Affiliate Shareholder
    0
    0
    1


Code of Ethics Disclosure

As of December 31, 2007 we have not adopted a Code of Ethics
for Financial Executives, which include our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, as required by sections 406 and 407 of the
Sarbanes-Oxley Act of 2002. Our management believes that the size of our company
and current operations at this time do not require a code of ethics to govern
the behaviour of our officers. We anticipate that we will adopt a code of ethics
once we are in a position to do so.

ITEM 10. EXECUTIVE COMPENSATION

The table below summarizes all compensation awarded to, earned
by, or paid to our former or current executive officers for the fiscal years
ended 2007, 2006 and 2005.

33

---

|SUMMARY COMPENSATION TABLE |      |        |       |        |       
|-------------------------- | ---- | ------ | ----- | ------ | ------
|Name                       |      |        |       |        |       
|and                        |      |        |       | Stock  | Option
|principal                  |      | Salary | Bonus | Awards | Awards
|position                   | Year | ($)    | ($)   | ($)    | ($)   
|Colin V.                   | 2007 | 0      | 0     | 0      | 0     
|Hall,                      | 2006 | 0      | 0     | 0      | 0     
|President                  | 2005 | 0      | 0     | 0      | 0     
|                           |      |        |       |        |       
|Todd                       | 2007 | 0      | 0     | 0      | 0     
|Ingram,                    | 2006 | 0      | 0     | 0      | 0     
|Secretary                  |      |        |       |        |       

Narrative Disclosure to the Summary Compensation
Table

During the year ended December 31, 2006 the Companys officers
received fees for services and described as all other compensation.

|OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END: None
|--------------------------------------------------------

OPTION AWARDS - Nil
    STOCK AWARDS - NilNumber of
      Securities Underlying Unexercised Options
      (#)Exercisable
    Number of
      Securities Underlying Unexercised Options (#)
      Unexercisable
    Equity Incentive
      Plan Awards: Number of Securities Underlying
      Unexercised Unearned Options (#)
    Option
      Exercise Price ($)
    Option
      Expiration Date
    Number of
      Shares or Units of Stock That Have Not Vested (#)
    Market Value of
      Shares or Units of Stock That Have Not Vested
      ($)
    Equity Incentive Plan
      Awards: Number of Unearned Shares, Units or Other
      Rights That Have Not Vested (#)
    Equity Incentive Plan Awards:
      Market or Payout Value of Unearned Shares, Units
      or Other Rights That Have Not Vested (#)Colin V. Hall
    0
    0
    0
    0
    0
    0
    0
    0
    0


DIRECTOR COMPENSATIONName
    Fees Earned or Paid in Cash
      ($)
    Stock Awards ($)
    Option Awards ($)
    Non-Equity Incentive Plan
      Compensation ($)
    Non-Qualified Deferred Compensation
      Earnings ($)
    All Other Compensation ($)
    Total ($)Colin V. Hall
    0
    0
    0
    0
    0
    0
    0


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of February 15, 2008, the
beneficial ownership of our common stock by each executive officer and director,
by each person known by us to beneficially own more than 5% of the our common
stock and by the executive officers and directors as a group.

34

---

Except as otherwise indicated, all shares are owned directly
and the percentage shown is based on 12,033,730 shares of common stock issued
and outstanding on February 15, 2008.

Title of class
    Name and address of beneficial owner(1)
    Amount of beneficial ownership
    Percent of classExecutive Officers & Directors:Common
    Colin V. Hall 4567 Prospect Road North
      Vancouver, B.C., V7N 3M1, CANADA
    1,500,000 shares
    12.5%Total of All Directors and Executive Officers:
    1,500,000 shares
    12.5%More Than 5% Beneficial Owners:Common
    EcoTech Waste Management 7588 Winston
      Street Burnaby, B.C., V5Z 4C2, CANADA
    2,000,000 shares
    16.6%


(1) As used in this table, "beneficial ownership" means the
sole or shared power to vote, or to direct the voting of, a security, or the
sole or shared investment power with respect to a security (i.e., the power to
dispose of, or to direct the disposition of, a security). In addition, for
purposes of this table, a person is deemed, as of any date, to have "beneficial
ownership" of any security that such person has the right to acquire within 60
days after such date.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Except as disclosed below, none of our directors or executive
officers, nor any proposed nominee for election as a director, nor any person
who beneficially owns, directly or indirectly, shares carrying more than 5% of
the voting rights attached to all of our outstanding shares, nor any members of
the immediate family (including spouse, parents, children, siblings, and
in-laws) of any of the foregoing persons has any material interest, direct or
indirect, in any transaction since the beginning of our last fiscal year on
January 1, 2006 or in any presently proposed transaction which, in either case,
has or will materially affect us.

On September 29, 2006, EcoTech Waste Management Systems, Inc.
(EcoTech)  a major shareholder of our company and owned by Mr. Colin V. Hall
 agreed to assign to us the full rights to the Thermal Destructor and an
offshoot technology known as the Steam Injection System in exchange for
$2,000.

On October 1, 2002, we entered into a joint venture agreement
with EcoTech. Under that agreement, we agreed to shed certain business and
administrative responsibilities including product manufacturing, inventory
maintenance, and website development, thereby enabling our company to
concentrate more fully on marketing and sales efforts. Most integral under the
agreement, we contracted the responsibility of manufacturing the Thermal
Destructor to EcoTech. In consideration for the services provided by EcoTech, we
are required to pay $100,000 to EcoTech in cash or shares of stock over the life
of the agreement which is three (3) years. As of December 31, 2007, we have paid
$85,500 and accrued $14,500 in accounts payable towards fulfilling our
obligations under the agreement. We are still responsible for these remaining
amounts to EcoTech, and hope to reconcile when we are financially capable of
doing so.

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On May 23, 2006 we negotiated with EcoTech and extended the
terms of our original joint venture agreement. Under the Strategic Alliance
Agreement, we defined the marketing responsibilities and agreed that the parties
will meet and explore a schedule for marketing to prospective customers. For the
initial customer, we agreed to pay $40,000 of the costs associated with these
marketing efforts and EcoTech agreed to bear the balance of such costs. For each
subsequent customer, we agreed to bear $50,000 worth of costs or whatever
adjusted price is agreed upon between the parties on a later date. EcoTech
remains responsible to build each Thermal Destructor unit for a cost not to
exceed $2,000,000 USD per unit. We agreed with EcoTech to work together to
determine revenue sharing arrangements in connection with any sales.

Under the October 1, 2002 joint venture agreement, EcoTech
agreed to search out and advise us on the development of technologies that may
compliment our business direction with the Thermal Destructor. In fulfillment of
that contractual obligation, on October 12, 2006, Eco Tech signed an Addendum to
the May 23, 2006 Strategic Alliance Agreement. In consideration for $2,000 to be
paid to EcoTech, the parties agreed to expand their business relationship to
include a portable high temperature steam generation technology (the Steam
Injection System) and jointly develop and market portable high temperature
burner gasifier systems for use across North America. Our marketing costs and
revenue sharing provisions under the Strategic Alliance Agreement apply with
equal force to the Steam Injection System technology.

PART IV

ITEM 13. EXHIBITS

INDEX TO EXHIBITS

Exhibit No.
      Description3.1*
      Amended and Restated Articles of Incorporation
        dated December 3, 20013.2*
      Amended and Restated Bylaws dated December 3, 20014.1*
      Specimen Common Stock Certificate10.1*
      Technology Assignment Agreement, dated September 29, 200610.2*
      Strategic Alliance Agreement, dated May 23, 200610.3*
      Addendum to Strategic Alliance Agreement, dated
        October 12, 200631.1
      Certifications of CEO
        pursuant to section 302 of the Sarbanes- Oxley Act of 200231.2
      Certifications of CFO
        pursuant to section 302 of the Sarbanes- Oxley Act of 200232.1
      Certifications pursuant
        to section 906 of the Sarbanes-Oxley Act of 2002 (CEO)32.2
      Certifications pursuant
        to section 906 of the Sarbanes-Oxley Act of 2002 (CFO)


* Previously filed with the SEC.

Reports on Form 8-K: None

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Table of Audit Fees (amounts in US$) billed by our auditors in
connection with the audit of the Companys annual financial statements included
in our annual report filed on form 10K-SB for the years ended:

Financial Statements for the Year Ended December 31
    Audit Services
    Audit Related Fees
    Tax Fees
    Other Fees2007
    $12,000
    0
    0
    02006
    $18,600
    0
    0
    02005
    $7,000
    0
    0
    02004
    $8,250
    0
    0
    02003
    $3,317
    0
    0
    02002
    $2,205
    0
    0
    0


SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                     | SOLANEX MANAGEMENT INC. 
|-------------------- | ------------------------
|                     |                         
|Date: March 28, 2008 | By: /s/ Colin V. Hall   
|                     | Colin V. Hall: President

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