UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-KSB

(Mark
One)

[
X ]

ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2005 OR



[
   ]

TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM _____ TO ______



Commission file number:_000-25529



REDCELL POWER CORPORATION

___________________________________________________________________________________

(Exact name of small business issuer in
its charter)

|                                                                     |  |                                     
|-------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                             |  | 13-4044390                          
|(State or other jurisdiction of incorporation or
      organization) |  | (I.R.S. Employer Identification No.)
|                                                                     |  |                                     
|598-999 Canada Place
      Vancouver, British Columbia               |  | V6C 3E1                             
|(Address of principal executive offices)                             |  | (Zip Code)                          



Issuer's telephone number:  (604) 629-2461



Securities Registered Under Section 12(b) of the Exchange Act:

None



Securities Registered Under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

(Title of class)



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 is not contained in this form, and no disclosure
will be contained, to the best of the 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.  [
   ]



State
issuer's revenues for most recent fiscal year:  $Nil



State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:  8,345,502
issued and outstanding as at July 18, 2006.

Documents
Incorporated by Reference:  None.



Transitional Small Business Format.   Yes [  ]
  No [X]

---



PART I





ITEM
1.

DESCRIPTION
OF BUSINESS



The Company was incorporated in the State of Delaware in February
1998.  On May 23, 2002 the Company changed its name to RedCell Power
Corporation.



On May 23, 2002 the Company, acquired 100,000 common shares, $1.00
par value, of RedCell Batteries Inc., ("RBI") a company incorporated under the
laws of the Province of Alberta.



The acquisition was consummated by the execution of an Acquisition
Agreement dated May 23, 2002.  The shares acquired by the Company
represented one hundred percent (100%) of all of RBI's then currently issued and
outstanding common stock in a tax free stock-for-stock acquisition.  The
aggregate purchase price paid by the Company for the RBI common shares was
8,000,000 newly issued shares of post-reverse split shares of voting common
shares of the Company, $0.001 par value.  These shares were issued to the
sellers of the RBI shares subsequent to a 1 for 10 reverse split by the Company
of its voting common stock. Additionally, pursuant to the terms of the
Acquisition Agreement, the sum of 257,501 common shares of the Company, held by
the previous majority shareholders of the Company, were cancelled.



As a result of the foregoing transaction, there was a change in
control of the Company to the shareholders of RBI.  The shareholders of RBI
now hold approximately 99% of the outstanding common shares of the Company.
 As a result of this acquisition and change of control, the Company changed
its name to "RedCell Power Corporation".



Subsequent to the acquisition, the Company determined that the
operations of RBI were not viable and accordingly adopted a formal plan of
disposal.  On December 30, 2003 the Company sold the beneficial right to,
title, and interest of its shares in RBI for US$1.00.  This sale resulted
in a gain on sale of subsidiary of $3,868,925, as the difference between the
assets held for sale and liabilities held for sale.







ITEM 2.

DESCRIPTION OF PROPERTY



The Company is currently looking to locate and consummate a merger
or acquisition with an operating entity.  The Company is considered to be
in the development stage.







ITEM 3.

LEGAL PROCEEDINGS



None.





ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



There were no matters submitted to a shareholder vote during the
fiscal year ended December 31, 2005.







---



PART II





ITEM 5.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS



The Company's common stock is currently not traded nor quoted in
any market place, nor is the Company aware of any established public trading
market for RedCell's common stock.





ITEM
6.

MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



Overview



We are a development stage company.



The Company currently maintains an office in Canada at 598-999
Canada Place, Vancouver, British Columbia V6C 3E1.





RESULTS
OF OPERATIONS



Restructuring



Since the sale of the beneficial right, title, and interest of
shares in RedCell Batteries Inc. completed in December 2003, we have been
looking to locate and consummate a merger or acquisition with an operating
entity.  The Company is considered to be in the development stage.



Liquidity
and Capital Resources



To date we have incurred significant net losses.  The net
loss for the year ended December 31, 2005 is $141,130, and the accumulated
deficit as at December 31, 2005 is $1,090,550.  The Company has no current
operations and is currently looking to locate and consummate a merger or
acquisition with an operating entity. These factors raise substantial doubt
about our ability to continue as a going concern.  We anticipate that we
may continue to incur significant operating losses for the foreseeable future.
 There can be no assurance as to whether or when we will generate material
revenues or achieve profitable operations.





RISK FACTORS



There are inherent risk factors associated with an investment in
RedCell and management wishes to alert investors to these risks.



Limited Operating History



RedCell has a limited operating history upon which an evaluation
of its business and prospects can be based.  There can be no assurance that
an investment in our Company shall be profitable or that we will realize revenue
growth or be profitable on a quarterly or annual basis.  In addition, any
plans to increase our operating expenses to further develop our operations and
increase our administration resources will require capital.  A relatively
high percentage of our expenses will be typically fixed in the short term as



our expense levels are based, in part, on its expectations of
future revenue.  To the extent that such expenses precede or are not
subsequently followed by increased revenue, our business, financial condition,
operating results, and cash flows would be materially adversely affected.
 Management believes that period-to-period comparisons of financial results
are not necessarily meaningful at this stage and should not be relied upon as an
indication of future performance.



Inflation



As we are a development stage company, inflation has not had a
material affect on our operations.  In the event we are no longer
considered a development stage entity, inflation may affect our ability to
generate profits as increased costs may be associated with development and
marketing of our products.  In the opinion of management, inflation at this
time has not and will not have a material affect on our operations. Management
will evaluate the possible affects of inflation on RedCell as it relates to our
business and operations and will proceed accordingly.



Ability
to Raise Capital



Our ability to further develop our business and operations is
dependent on our ability to raise capital.  RedCell will seek to raise
capital through equity funding and private placement of securities as well as
securing lines of credit with credit institutions.  There is no guarantee
that we will be able to raise capital to further develop our business and
operations.  Additionally, we may encounter significant costs or
unfavourable terms in our efforts to raise capital.  Investors are further
alerted that any efforts to raise capital through a private placement of equity
securities will result in dilution to shareholders of the Company.





ITEM 7.

FINANCIAL STATEMENTS



The Annual Financial Statements for the year ended December 31,
2005 will follow the text of this Form 10-KSB.





ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE



None.





ITEM 8A.

CONTROLS AND PROCEDURES



As of the end of the period covered by this report, the Company
evaluated the effectiveness of the design and operation of its disclosure
controls and procedures and its internal controls and procedures for financial
reporting.  This evaluation was done under the supervision and with the
participation of management, including the President and Chief Financial
Officer.  In accordance with SEC requirements, the President and Chief
Financial Officer note that, since the date of the evaluation to the date of
this Annual Report, there have been no significant changes in internal controls
or in other factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and material
weaknesses.  Based upon the Company's evaluation, the President and Chief
Financial Officer have concluded that the Company's disclosure controls are
effective to ensure that material information relating to the Company is made
known to management, including the President and Chief Financial Officer,
particularly during the period when the Company's periodic reports are being
prepared,and that the Company's internal controls are effective to provide
reasonable assurance that the Company's financial statements are fairly
presented in conformity with generally accepted accounting principles.



ITEM 8.B.

OTHER INFORMATION



None.

PART III



ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT



Identification of Directors



The list presented below sets forth the names and ages of all
directors of the Company indicating all positions and offices with the Company
held by each such person and his term of office as director and the period
during which he has served as such:



|             |     |           |               
|------------ | --- | --------- | --------------
|Name         | Age | Positions | Director Since
|             |     |           |               
|Cameron King | 43  | Director  | March 2003    





Identification of Executive Officers



The list presented below sets forth the names and ages of all
executive officers of the Company indicating all positions and offices held by
such person and the period during which he has served as such:



|             |     |                                       |               
|------------ | --- | ------------------------------------- | --------------
|Name         | Age | Positions                             | Director Since
|             |     |                                       |               
|Cameron King | 43  | President and Chief Executive Officer | March 2003    



(1)

All officers serve at the discretion of the Board of Directors



Business Experience



Mr. King, holds an MBA from Michigan State University and is a
finance graduate of McMaster University, with over 20 years of senior management
experience developing expertise in capital markets, sales, marketing and public
relations. Mr. King was a key member of the corporate banking team with the Bank
of Nova Scotia in Toronto, Canada, specializing in merger and acquisition due
diligence.



Since 1995, Cameron has operated a successful venture capital
company by incubating, structuring, and publicly listing several companies
ranging from internet based technology, mining, oil and gas exploration, and
telecommunications.



Involvement in Certain Legal Proceedings



None.







Promoters and Control Persons



Not applicable.



Section
16(a) Beneficial Ownership Reporting Compliance



The Company believes that its officers, directors, and 10%
beneficial owners have filed on a timely basis all required Forms 3, 4, and 5
under Section 16(a) of the Exchange Act due in or in respect of the 2005 fiscal
year.







ITEM 10.

EXECUTIVE COMPENSATION



(a)  Summary Compensation Table



The following table reflects cash and non-cash compensation paid
or accrued by the Company during the fiscal years ended December 31, 2005,2004,
2003, and 2002 to or for the account of the chief executive officer and each
executive officer whose cash compensation exceeded $100,000, and all executives
of the Company as a group:



|                                  |                          |                        |       |                                 |                              |                                                |              |                             
|--------------------------------- | ------------------------ | ---------------------- | ----- | ------------------------------- | ---------------------------- | ---------------------------------------------- | ------------ | ----------------------------
|                                  | Annual Compensation      | Long-term Compensation
|Name and
      Principal Position | Year Ended
      Dec, 31 | Salary                 | Bonus | Other Annual
      Compensation | Restricted
      Stock Award | Securities
      Underlying
      Options/SARs | LTIP Payouts | All Other
      Compensation
|                                  |                          |                        |       |                                 |                              |                                                |              |                             
|Cameron King,                     | 2005                     | $120,000               | N/A   | N/A                             | N/A                          | N/A                                            | N/A          | N/A                         
|President                         | 2004                     | $120,000               | N/A   | N/A                             | N/A                          | N/A                                            | N/A          | N/A                         
|                                  | 2003                     | $120,000               | N/A   | N/A                             | N/A                          | N/A                                            | N/A          | N/A                         
|                                  | 2002                     | $120,000               | N/A   | N/A                             | N/A                          | N/A                                            | N/A          | N/A                         
|                                  |                          |                        |       |                                 |                              |                                                |              |                             





(b)

Option/SAR Grants in Last Fiscal Year

% of Total

Options/SARs

Granted to

|                                             |                           |                         |                      |            |                   
|-------------------------------------------- | ------------------------- | ----------------------- | -------------------- | ---------- | ------------------
|Number of Securities Underlying Options/SARs | Employees in
      Fiscal | Exercise or Base Price/ | Market Price on Date | Expiration | Grant Date Present





| |  |  |  |  | 
| |  |  |  |  | 



NONE



(c)

Aggregated Option/SAR Exercises and Last Fiscal Year and
Year-End Option/SAR Values







|     |                             |                |                                                                                            |                                                                                 
|---- | --------------------------- | -------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------
|Name | Shares Acquired on Exercise | Value Realized | Number of Securities Underlying Unexercised Options/SARs at
      FY-end (all exercisable) | Value of Unexercised In-The-Money Options/SARs at FY-end (all
      exercisable)



NONE









ITEM
11.

SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



(a)

Security Ownership of Certain Beneficial Owners



The Company is not aware of any of any persons who own
beneficially more than 5 percent of the outstanding shares of its Common Stock.
 The Company has no other class of voting securities.





(b)

Security Ownership of Management



Not Applicable



(c) Changes in Control



None.





ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



(a)

Transactions With Management and Others



None.



(b)

Certain Business Relationships



None.



(c)

Indebtedness of Management



None.



(d)

Transactions with Promoters



---



Not applicable.





ITEM 13.

EXHIBITS



31

Certifications
by the Chief Executive Officer and the Chief Financial Officer of the Company
pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.



32

Certificate
of Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.







ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES



(a)  Fees paid to MacKay, LLP



For the fiscal years ended December 31, 2005 and December 31,
2004, MacKay LLP provided services in the following categories and amounts:



|                   |                         |                        
|------------------ | ----------------------- | -----------------------
|                   | Fiscal Year Ended      
|                   | December 31,
      2005 | December 31,
      2004
|                   |                         |                        
|Audit Fees         | $    6,500              | $
               7,500 
|Audit-Related Fees | 1,000                   | 1,000                  
|Tax Fees           | -                       | -                      
|All Other Fees     | -                       | -                      





(b)  Policies and Procedures for Approval of Audit and
Non-Audit Services:



The
Company has approved an audit committee, through which all audit and non-audit
services are approved.











SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.



REDCELL POWER CORPORATION



July 24, 2006



By: "Cameron King"_______

Cameron King, President,

and Chief Executive Officer











---







RedCell Power Corporation

(a Development Stage Company)



Financial Statements





Year ended December 31, 2005



(Stated in US Dollars)











RedCell
Power Corporation

(a
Development Stage Company)

Financial
Statements

(Stated
in US Dollars)



December
31, 2005

Page







|                                                              |     
|------------------------------------------------------------- | ----
|Report
      of Independent Registered Public Accounting Firm | 3   
|Statements
      of Operations and Deficit                    | 4   
|Statements
      of Stockholders' Equity (Deficit)            | 5   
|Balance
      Sheets                                          | 6   
|Statements
      of Cash Flows                                | 7   
|Notes
      to the Financial Statements                       | 8-12















---





















Report
of Independent Registered Public Accounting Firm



To
the Shareholders of

RedCell
Power Corporation

(a
Development Stage Company)

City
of Vancouver British Columbia, Canada





We have audited the balance sheets of RedCell Power Corporation (a
Development Stage Company)as at December 31, 2005 and 2004 and the
related statements of operations and deficit, stockholders' equity (deficit),
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our 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.



In our opinion, these financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2005
and 2004 and the results of its operations and its cash flows for the years then
ended in accordance with United States generally accepted accounting principles.



The accompanying financial statements referred to above have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company is in the
development stage, and has no permanently established source of revenue and is
dependent on its ability to raise capital from shareholders or other sources to
sustain operations.  These factors, along with other matters as set forth
in Note 1, raise substantial doubt that the Company will be able to continue as
a going concern.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.









Vancouver, Canada

MacKay LLP

April 21,2006

Chartered Accountants











---





RedCell
Power Corporation

(a
Development Stage Company)

Statements
of Operations and Deficit

(Stated
in US Dollars)





|                                          |                                 |                               
|----------------------------------------- | ------------------------------- | ------------------------------
|Year
      ended December 31,             | 2005                            | 2004                          
|                                         
|Administrative
      expenses             |                                 |                               
|Accounting
      and legal                | $                11,481         | $
                      19,310
|Consulting
      fees (note 3)            | 120,000                         | 120,000                       
|Filing
      fees                         | 8,522                           | 2,125                         
|Foreign
      exchange loss               | 689                             | -                             
|Office
      and miscellaneous            | 438                             | 96                            
|                                          |                                 |                               
|Loss
      for the year                   | (141,130)                       | (141,531)                     
|                                          |                                 |                               
|Deficit,
      beginning of year          | (949,420)                       | (807,889)                     
|                                          |                                 |                               
|Deficit,
      end of year                | $
              (1,090,550)     | $
                (949,420)   
|Basic
      and diluted loss per share    | $
                       (0.02) | $
                      (0.02)
|Weighted
      average shares outstanding | 8,345,502                       | 8,345,502                     

---





RedCell
Power Corporation

(a
Development Stage Company)

Statements
of Stockholders' Equity (Deficit)

(Stated
in US Dollars)

December
31, 2005

|                                                                       |                  |                      |                            |                                                  |                            
|---------------------------------------------------------------------- | ---------------- | -------------------- | -------------------------- | ------------------------------------------------ | ---------------------------
|                                                                       | Number of shares | Par value            | Additional Paid in Capital | Deficit accumulated during the development stage | Total                      
|For
      the period February 25, 1998 to January 31, 1999             | -                | $
                 - | $
                      -  | $
                       -                       | $
                        -
|Issued
      (note 4(a))                                               | 250,000          | 250                  | 9,750                      | -                                                | 10,000                     
|Capital
      contribution for the period                              | -                | -                    | 9,000                      | -                                                | 9,000                      
|Net
      loss for the period                                          | -                | -                    | -                          | (19,050)                                         | (19,050)                   
|                                                                       |                  |                      |                            |                                                  |                            
|Balance
      January 31, 1999                                         | 250,000          | 250                  | 18,750                     | (19,050)                                         | (50)                       
|                                                                       |                  |                      |                            |                                                  |                            
|Capital
      contribution for the year                                | -                | -                    | 31,050                     | -                                                | 31,050                     
|Net
      loss for the year                                            | -                | -                    | -                          | (34,550)                                         | (34,550)                   
|                                                                       |                  |                      |                            |                                                  |                            
|Balance
      January 31, 2000                                         | 250,000          | 250                  | 49,800                     | (53,600)                                         | (3,550)                    
|                                                                       |                  |                      |                            |                                                  |                            
|Issued
      (note 4(b))                                               | 16,250           | 16                   | 9,984                      | -                                                | 10,000                     
|Issued
      (note 4(c))                                               | 2,500            | 3                    | 297                        | -                                                | 300                        
|Issued
      (note 4(e))                                               | 10,000           | 10                   | 1,990                      | -                                                | 2,000                      
|Capital
      contribution for the year                                | -                | -                    | 35,425                     | -                                                | 35,425                     
|Net
      loss for the year                                            | -                | -                    | -                          | (45,475)                                         | (45,475)                   
|                                                                       |                  |                      |                            |                                                  |                            
|Balance
      January 31, 2001                                         | 278,750          | 279                  | 97,496                     | (99,075)                                         | (1,300)                    
|                                                                       |                  |                      |                            |                                                  |                            
|Issued
      (note 4(f))                                               | 5,000            | 5                    | 45                         | -                                                | 50                         
|Capital
      contribution for the year                                | -                | -                    | 32,300                     | -                                                | 32,300                     
|Net
      loss for the year                                            | -                | -                    | -                          | (33,107)                                         | (33,107)                   
|                                                                       |                  |                      |                            |                                                  |                            
|Balance
      January 31, 2002                                         | 283,750          | 284                  | 129,841                    | (132,182)                                        | (2,057)                    
|                                                                       |                  |                      |                            |                                                  |                            
|Stock
      dividend paid                                              | -                | -                    | (50)                       | -                                                | (50)                       
|Stock
      issued to effect the acquisition of subsidiary (note 4(h)) | 8,000,000        | 8,000                | -                          | -                                                | 8,000                      
|Stock
      cancelled by majority  shareholders May 2002 (note 4(i))   | (258,248)        | (257)                | 257                        | -                                                | -                          
|Issued
      (note 4(j))                                               | 320,000          | 320                  | -                          | -                                                | 320                        
|Net
      loss for the period                                          | -                | -                    | -                          | (4,367,835)                                      | (4,367,835)                
|                                                                       |                  |                      |                            |                                                  |                            
|Balance
      December 31, 2002                                        | 8,345,502        | 8,347                | 130,048                    | (4,500,017)                                      | (4,361,622)                
|                                                                       |                  |                      |                            |                                                  |                            
|Net
      income for the year                                          | -                | -                    | -                          | 3,692,128                                        | 3,692,128                  

|                                 |           |            |             |                |                
|-------------------------------- | --------- | ---------- | ----------- | -------------- | ---------------
|                                 |           |            |             |                |                
|Balance
      December 31, 2003  | 8,345,502 | 8,347      | 130,048     | (807,889)      | (669,494)      
|                                 |           |            |             |                |                
|Net
      loss for the year      | -         | -          | -           | (141,531)      | (141,531)      
|                                 |           |            |             |                |                
|Balance,
      December 31, 2004 | 8,345,502 | 8,347      | 130,048     | (949,420)      | (811,025)      
|                                 |           |            |             |                |                
|Net
      loss for the year      | -         | -          | -           | (141,130)      | (141,130)      
|                                 |           |            |             |                |                
|Balance,
      December 31, 2005 | 8,345,502 | $    8,347 | $   130,048 | $  (1,090,550) | $
    (952,155)



---





RedCell
Power Corporation

(a
Development Stage Company)

Balance
Sheets

(Stated
in US Dollars)



|                                                       |                          |                         
|------------------------------------------------------ | ------------------------ | ------------------------
|December
      31,                                     | 2005                     | 2004                    
|                                                       |                          |                         
|Assets                                                 |                          |                         
|                                                       |                          |                         
|Current                                                |                          |                         
|Cash                                                   | $
               18,615  | $
               10,212 
|                                                       |                          |                         
|                                                       |                          |                         
|Liabilities                                            |                          |                         
|                                                       |                          |                         
|Current                                                |                          |                         
|Accounts
      payable and accrued liabilities         | $
                23,046 | $
                25,405
|Due
      to related parties (note 3)                  | 947,724                  | 795,832                 
|                                                       |                          |                         
|                                                       | 970,770                  | 821,237                 
|                                                       |                          |                         
|Stockholders'
      Equity (Deficit)                   |                          |                         
|                                                       |                          |                         
|Common
      stock,$0.001 par value (note 4)           |                          |                         
|25,000,000
      common shares authorized              |                          |                         
|8,345,502
      shares outstanding                     | 8,347                    | 8,347                   
|                                                       |                          |                         
|Additional
      paid in capital                       | 130,048                  | 130,048                 
|                                                       |                          |                         
|Deficit
      Accumulated during the Development Stage | (1,090,550)              | (949,420)               
|                                                       |                          |                         
|                                                       | (952,155)                | (811,025)               
|                                                       |                          |                         
|                                                       | $
               18,615  | $
              10,212  





Nature
of Operations (note 1)



Approved by the Directors:



Michael Laidlaw

___________________________ Director





---





RedCell
Power Corporation

(a
Development Stage Company)

Statements
of Cash Flows

(Stated
in US Dollars)



|                                                |                                    |                                   
|----------------------------------------------- | ---------------------------------- | ----------------------------------
|Year
      ended December 31,                   | 2005                               | 2004                              
|                                                |                                    |                                   
|Cash
      provided by (used for)               |                                    |                                   
|                                                |                                    |                                   
|Operating
      activities                      |                                    |                                   
|Income
      (loss) for  the year               | $
                 (141,130)       | $
       (141,531)                
|Changes
      in non-cash working capital items |                                    |                                   
|Accounts
      payable and accrued liabilities  | (2,359)                            | 11,975                            
|Due
      to related party                      | 120,000                            | 120,000                           
|                                                |                                    |                                   
|                                                | (23,489)                           | (9,556)                           
|                                                |                                    |                                   
|Financing
      activity                        |                                    |                                   
|Due
      to related parties                    | 31,892                             | 19,768                            
|                                                |                                    |                                   
|Increase
      in cash during the year          | 8,403                              | 10,212                            
|Cash,
      beginning of year                   | 10,212                             | -                                 
|Cash,
      end of year                         | $
                      18,615     | $
                  10,212        
|                                                |                                    |                                   
|Supplemental
      cash flow intormation        |                                    |                                   
|Interest
      paid                             | $
                               - | $
                               -
|Income
      taxes paid                         | $
                               - | $
                               -



---



RedCell
Power Corporation

(a
Development Stage Company)

Notes
to the Financial Statements

(Stated
in US Dollars)



December
31, 2005



1.

Nature
of Operations



The Company was incorporated in the State of Delaware in February
1998.  On May 23, 2002 the Company changed its name to RedCell Power
Corporation.



The accompanying financial statements have been prepared on the
basis of accounting principles applicable to a going concern.  Accordingly,
they do not give effect to adjustment that would be necessary should the Company
be unable to continue as a going concern and therefore be required to realize
its assets and retire its liabilities in other than the normal course of
business and at amounts different from those in the accompanying financial
statements. The Company's ability to continue as a going concern is dependent
upon achieving profitable operations and/or upon obtaining additional financing.
The outcome of these matters can not be predicted at this time.





2.

Significant
Accounting Policies



(a)

Development
stage company



The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7.



(b)

Estimates



The
preparation of financial statements 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
reporting period.  Actual results could differ from those estimates.



(c)

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:



-  Monetary items at the rate prevailing at the balance sheet
date;

-  Non-monetary items at the historical exchange rate;

- Revenue and expenses at the average rate of exchange in effect
during the applicable accounting period.



---



RedCell
Power Corporation

(a
Development Stage Company)

Notes
to the Financial Statements

(Stated
in US Dollars)



December
31, 2005



2.

Significant Accounting Policies (continued)



(d)

Stock-based compensation



SFAS 123 "Accounting for stock based compensation", defines a fair
value based method of accounting for employee stock options.  Under this
fair value method, compensation cost is measured at the date of grant based on
the fair value of the award and is recognized over the vesting period.
 However SFAS 123 allows an entity to continue to measure compensation
costs related to stock option costs in accordance with Accounting Principle
Board Statement No. 25 (APB 25).  The Company has elected to measure
compensation related to stock options in accordance with APB 25.
 Accordingly, since the fair value of the shares was less than the price of
the stock options at the date of grant, there is no compensation to be
recognized under US GAAP.  There are no outstanding options or warrants as
at December 31, 2005 and 2004.



In December 2002, FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure".  SFAS 148 amends
SFAS No. 123, to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation.  In addition, SFAS 148 amends the disclosure requirements of
SFAS 123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation
and the effect of the method used on reported results.  SFAS 148 is
effective for fiscal years beginning after December 15, 2002.  The company
adopted SFAS No. 148, on January 1, 2003 with no material impact on its
financial statements.



(e)

Loss per share



Basic loss per share is calculated based on the weighted average
number of shares outstanding during the period, in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share".



(f)

Fair value of financial instruments



All significant financial assets, financial liabilities and equity
instruments of the Company are either recognized or disclosed in the financial
statements together with other information relevant for making a reasonable
assessment of future cash flows, interest rate risk and credit risk.  Where
practicable the fair values of financial assets and financial liabilities have
been determined and disclosed; otherwise only available information pertinent to
fair value has been disclosed.



(g)

Income taxes



Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes".  A deferred tax asset or liability is
recorded for all temporary differences between financialand tax reporting.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.

---

RedCell Power
Corporation

(a
Development Stage Company)

Notes
to the Financial Statements

(Stated
in US Dollars)



December
31, 2005

(h)

Comprehensive loss



In June 1997, the FASB issued SFAS No. 130 "Reporting
comprehensive income". SFAS 130 requires that total comprehensive income and
comprehensive income per share be disclosed with equal prominence as net income
and net income per share.  Comprehensive income is defined as changes in
shareholders' equity exclusive of transactions with owners such as capital
contributions and dividends.  There are no comprehensive income items for
the years reported.





3.

Related Party Transactions



Of the total due to related parties, $947,724 (2004 - $555,832) is
secured against the assets of the Company.  These advances do not bear
interest, and have no fixed terms, accordingly the fair value cannot be
practicably determined.



During the year the Company incurred consulting fees of $120,000
(2004 - $120,000) with respect to services rendered by a company in which a
director has an interest.  As at December 31, 2005 the total amount due to
the related company was $360,000 (2004 - $240,000).



These transactions were in the normal course of operations and
have been valued in these financial statements at the exchange amount which is
the amount of consideration established and agreed to by the related
parties.



4.

Common Stock



(a)

On May 18, 1998 the Company issued 1,000,000 common shares for
$10,000 cash.

(b)

On February 1, 2000 the Company issued 65,000 common shares for
$10,000 cash.

(c)

On August 1, 2000 the Company issued 10,000 common shares for $300
cash.

(d)

On August 1, 2000 the Company completed a 2.5 for 1 stock split.
 This has been reflected in the statement of stockholders' equity on a
retroactive basis.

(e)

On January 15, 2001 the Company issued 100,000 common shares for
$2,000 cash.

(f)

On August 10, 2001 the Company issued 50,000 common shares
for $50 cash.

(g)

On May 24, 2002 the company completed a reverse stock split 1 for
10.  This has been reflected in the statement of stockholders' equity on a
retroactive basis.

(h)

On May 24, 2002 the Company issued 8,000,000 common shares with a
par value of $8,000 in exchange for all of the issued and outstanding shares of
RedCell Batteries Inc., a former legal subsidiary which was disposed of in
fiscal 2003.

(i)

On May 29, 2002 majority shareholders cancelled 258,248 common
shares with a par value of $257.

(j)

On July 25, 2002 the Company issued 320,000 common shares for $320
cash.

---



RedCell
Power Corporation

(a
Development Stage Company)

Notes
to the Financial Statements

(Stated
in US Dollars)



December
31, 2005







5.

Subsequent Events



On June 2, 2006, the Company purchased a 50% interest in the
mineral claims held by Viking Power Corp., a private exploration stage company
incorporated in the State of Nevada.  The purchase price was $5,000
cash.



6.

New Accounting Pronouncements



SFAS No. 123 (revised 2004), Share-Based Payment.  For public
companies, the cost of employee services received in exchange for equity
instruments generally should be measured at fair value at the grant date.
 The cost of employee services received in exchange for an award of
liability instruments should be measured initially at fair value and re-measured
subsequently at each reporting date through the settlement date. Public entities
that file as small business issuers must comply as of the beginning of the first
interim or annual reporting period that begins after December 15, 2005.



SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity.  This Statement was
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise was effective at the beginning of the first interim period
beginning after June 15, 2003, except for:



Mandatorily redeemable noncontrolling interests that would not
have to be classified as liabilities by the subsidiary, under the "only upon
liquidation" exception in paragraph 9 of SFAS 150, but would be classified as
liabilities by the parent in consolidated financial statements, the
classification and measurement provisions (but not the disclosure provisions) of
SFAS 150 are deferred indefinitely pending further Board action.

Other mandatorily redeemable noncontrolling interests that were
issued before November 5, 2003, the measurement provisions of SFAS 150 are
deferred indefinitely, both for the parent in consolidated financial statements
and for the subsidiary that issued the instruments that result in the
mandatorily redeemable noncontrolling interest, pending further Board action.
 However, the classification and disclosure provisions are not
deferred.



SFAS No. 153, Exchanges of Nonmonetary Assets - an amendment of
APB Opinion No. 29.  This amendment to Opinion No. 29 eliminates the fair
value exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial substance.  The Statement is effective for nonmonetary
asset exchanges occurring in periods beginning after June 15, 2005.

In addition, the FASB and Emerging Issues Task Force ("EITF") have
issued a variety of interpretations including the following interpretations with
wide applicability.



---



RedCell
Power Corporation

(a
Development Stage Company)

Notes
to the Financial Statements

(Stated
in US Dollars)



December
31, 2005



6.

New Accounting Pronouncements (continued)



EITF Issue No. 03-1, The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments.  The effective date
for the measurement and recognition guidance contained in paragraphs 10 through
20 of Issue 03-1 is delayed.  The disclosure guidance in paragraphs 21 and
22 of Issue 03-1 remains effective.



EITF
Issue No. 03-13, Applying the Conditions in Paragraph 42 of FASB Statement No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets", in
Determining Whether to Report Discontinued Operations.  This Issue
describes an approach for evaluating whether criteria have been met for
classifying as discontinued operations the results of operations of a component
of an entity that either has been disposed of or is classified as held for sale
in fiscal periods beginning after December 15, 2004.



EITF Issue No. 04-1, Accounting for Preexisting Relationships
between the Parties to a Business Combination.  This Issue concludes that a
business combination between two parties having a preexisting relationship is a
multiple-element transaction with one element being the business combination and
the other element being the settlement of the preexisting relationship.
 The consensuses should be applied to business combinations consummated and
goodwill impairment tests performed in reporting periods beginning after October
13, 2004.



The adoption of these new pronouncements is not expected to have a
material effect on the Company's financial position or results of
operations.