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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

           -----------------------------------------------------------

                                   FORM 10-QSB

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006


                        COMMISSION FILE NUMBER 333-113726


                               RADIAL ENERGY INC.
                               ------------------
        (Exact name of small business issuer as specified in its charter)


                NEVADA                                  72-1580091
                ------                                  ----------
    (State or other jurisdiction of                  (I.R.S. Employer
    incorporation or organization)                  Identification No.)


          1313 EAST MAPLE ST., SUITE 223, BELLINGHAM, WASHINGTON 98225
          ------------------------------------------------------------
                    (Address of principal executive offices)

                    Issuer's telephone number: (360) 685-4240
                                               --------------

          Check whether the issuer (1) has 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 filing requirements for the past 90 days.
                                                               Yes  |X|  No  |_|

          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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: As of August 10, 2006,
44,565,824 shares of common stock were issued and outstanding.




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<PAGE>
<TABLE>
<CAPTION>



                               RADIAL ENERGY INC.
                                TABLE OF CONTENTS

<S>                                                                                                             <C>
 PART I.   FINANCIAL INFORMATION


            Item 1.   Financial Statements

                      Balance Sheets as of June 30, 2006, and December 31, 2005 (Unaudited)........              1

                      Interim Statement of Operations for the three months and six months ended June 30,
                   2006 and 2005 and for the period from June 30, 2000 (date of incorporation) to June
                   30, 2006 (Unaudited)...................................................................       2

                      Interim Statement of Cash Flows for the six months ended
                   June 30, 2006 and 2005 and for the period from June 30, 2000
                   (date of incorporation) to June 30, 2006 (Unaudited)...................................       3

                      Interim Statement of Stockholders' Equity (Deficiency) for the period June 30, 2000
                   (Date of Inception) to June 30, 2006 (Stated in US Dollars) (Unaudited..............          4

                      Notes to Financial Statements (Unaudited)...........................................       6


            Item 2.   Management's Plan of Operation......................................................      12

            Item 3.   Controls and Procedures.............................................................      22


 PART II.   OTHER INFORMATION

            Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.........................      23

            Item 5.   Other Information...................................................................      23

            Item 6.   Exhibits............................................................................      26


 SIGNATURES...............................................................................................      28

 EXHIBIT INDEX ...........................................................................................      29

</TABLE>


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<PAGE>


                         PART I.--FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                               RADIAL ENERGY INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                       JUNE 30, 2006 AND DECEMBER 31, 2005
                                   (UNAUDITED)

                                                     ASSETS                             June 30         December 31
                                                     ------                               2006              2005
                                                                                          ----              ----

<S>                                                                                 <C>               <C>
Current
   Cash                                                                             $        55,259   $         1,211
   Prepaid expenses                                                                          39,535                 -
   Current assets of discontinued operations - Note 11                                            -             1,000
                                                                                    ---------------   ---------------

                                                                                             94,794             2,211
Equipment - Note 4                                                                            1,015                 -
Oil and gas properties - Note 5                                                           2,144,814                 -
                                                                                    ---------------   ---------------

                                                                                    $     2,240,623   $         2,211
                                                                                    ===============   ===============

LIABILITIES

Current
   Accounts payable and accrued liabilities - Note 5                                $       773,778   $         8,435
   Due to related parties - Notes 7 and 8                                                 1,219,600                 -
   Current liabilities of discontinued operations - Note 11                                       -             7,500
                                                                                    ---------------   ---------------

                                                                                          1,993,378            15,935
                                                                                    ---------------   ---------------

                        STOCKHOLDERS' EQUITY (DEFICIENCY)

Capital stock - Note 6
   Authorized:
           75,000,000  common stock, $0.001 par value
   Issued:
           35,065,824  common stock (December 31, 2005: 151,065,824)                         35,066           151,066
Additional paid-in capital                                                                   93,180             6,180
Share subscribed - Note 6                                                                 1,710,000                 -
Deficit accumulated during the development stage                                         (1,591,001)         (170,970)
                                                                                    ---------------   ---------------

                                                                                            247,245           (13,724)
                                                                                    ---------------   ---------------

                                                                                    $     2,240,623   $         2,211
                                                                                    ===============   ===============

</TABLE>


                             SEE ACCOMPANYING NOTES
                                                                               1
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<PAGE>

<TABLE>
<CAPTION>

                               RADIAL ENERGY INC.
                          (A DEVELOPMENT STAGE COMPANY)
                         INTERIM STATEMENT OF OPERATIONS
                         FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2006
                  AND 2005 AND FOR THE PERIOD FROM JUNE 30, 2000 (DATE OF
                  INCORPORATION) TO JUNE 30, 2006
                                   (UNAUDITED)

                                                                                                                     June 30, 2000
                                                                                                                        (Date of
                                                           Three months ended                Six months ended        Inception) to
                                                                 June 30                          June 30               June 30,
                                                          2006             2005            2006            2005           2006
                                                          ----             ----            ----            ----           ----

<S>                                                  <C>              <C>             <C>             <C>             <C>
Administrative expenses
    Administration fees                              $       8,500    $           -   $        8,500  $           -   $       8,500
    Advertising and promotion                                    -                -                -              -           1,001
    Consulting fees - Note 7                                15,564                -           29,518              -          78,015
    Executive compensation and benefits - Note 7         1,259,800                -        1,259,800              -       1,259,800
    Filing fees                                              1,990            1,566            3,971          6,613          16,426
    Interest and bank charges                                  914            1,276            1,388          2,564           9,001
    Investor relations                                      31,657                -           41,657              -          51,653
    Marketing management services                           29,150                -           29,150              -          29,150
    Office and miscellaneous                                 1,969            1,146            4,219          3,425          17,555
    Professional fees                                       18,544            2,388           25,412          7,610          66,050
    Rent                                                     3,321                -            3,321              -           3,826
    Transfer agent fees                                      2,595              481            3,057          1,581           2,595
    Travel and related costs                                10,431                -           15,852              -          15,851
    Website maintenance                                     12,094              273           12,094            273          14,223
                                                     -------------    -------------   --------------  -------------  --------------

Loss before other items                                 (1,396,529)          (7,130)      (1,437,938)       (22,066)     (1,573,646)

Other items:
    Other income                                                 -                -                -              -              58
    Gain on note payable forgiven - Note 6                       -                -            9,407              -           9,407
                                                     -------------    -------------   --------------  -------------  --------------

Net loss from continuing operations                     (1,396,529)          (7,130)      (1,428,531)       (22,066)     (1,564,181)

Income (loss) from discontinued operations
 - Note 11                                                       -                -            8,500            480         (26,820)
                                                     -------------    -------------   --------------  -------------  --------------

Net loss for the period                              $  (1,396,529)   $      (7,130)  $   (1,420,031) $     (21,586) $   (1,591,001)
                                                     =============    =============   ==============  =============  ==============

Basic loss per share from continuing operations      $        (0.04)  $       (0.00)  $        (0.02) $       (0.00)
                                                     ==============   =============   ==============  =============

Basic income per share from discontinued
 operations                                          $           -    $           -   $        0.00   $        0.00
                                                     =============    =============   =============   =============

Weighted average number of shares outstanding
 - Note 6                                               35,065,824      149,920,400       60,701,183    149,920,400
                                                     =============    =============   ==============  =============
</TABLE>

                             SEE ACCOMPANYING NOTES
                                                                               2
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<PAGE>

<TABLE>
<CAPTION>

                               RADIAL ENERGY INC.
                          (A DEVELOPMENT STAGE COMPANY)
                         INTERIM STATEMENT OF CASH FLOWS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND
               2005 AND FOR THE PERIOD FROM JUNE 30, 2000 (DATE OF
                         INCORPORATION) TO JUNE 30, 2006
                                   (UNAUDITED)

                                                                                                         June 30, 2000
                                                                                                           (Date of
                                                                             Six months ended            Inception) to
                                                                                 June 30,                   June 30,
                                                                           2006             2005              2006
                                                                           ----             ----              ----

<S>                                                                 <C>               <C>              <C>
Cash Flows used in Operating Activities
   Net loss from continuing operations                              $   (1,428,531)   $      (22,066)  $   (1,564,181)
   Deduct item not affecting cash:
      Gain on note payable forgiven                                         (9,407)                -           (9,407)
   Changes in non-cash working capital balances
    related to operations:
      Prepaid expenses                                                     (39,535)                -          (39,535)
      Accounts payable and accrued liabilities                             765,750            (3,262)         774,185
                                                                    --------------    --------------    -------------

                                                                          (711,723)          (25,328)        (838,938)
                                                                    --------------    --------------    -------------

Cash Flows used in Investing Activities
   Acquisition of equipment                                                 (1,015)                -           (1,015)
   Oil and gas properties                                               (2,144,814)                -       (2,144,814)
                                                                    --------------    --------------   --------------

                                                                        (2,145,829)                -       (2,145,829)
                                                                    --------------    --------------   --------------

Cash Flows from Financing Activities
   Increase in due to related parties                                    1,219,600                 -        1,219,600
   Capital stock issued                                                          -                 -           99,975
   Share subscribed                                                      1,710,000                 -        1,710,000
   Decrease in note payable                                                (20,000)                -          (20,000)
   Convertible debentures                                                        -             2,479           57,271
                                                                    --------------    --------------   --------------

                                                                         2,909,600             2,479        3,066,846
                                                                    --------------    --------------   --------------

Increase (decrease) in cash from continuing operations                      52,048           (22,849)          82,079

Increase (decrease) in cash from discontinued operations
 - Note 11                                                                   2,000             7,980          (26,820)
                                                                     -------------    --------------    -------------

Increase (decrease) in cash during the period                               54,048           (14,869)          55,259

Cash, beginning of the period                                                1,211            24,964                -
                                                                    --------------    --------------   --------------

Cash, end of the period                                             $       55,259    $       10,095   $       55,259
                                                                    ==============    ==============   ==============
</TABLE>

                             SEE ACCOMPANYING NOTES
                                                                               3
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<PAGE>

<TABLE>
<CAPTION>

                               RADIAL ENERGY INC.
                       (FORMERLY BV PHARMACEUTICAL, INC.)
                          (A DEVELOPMENT STAGE COMPANY)
             INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
        FOR THE PERIOD JUNE 30, 2000 (DATE OF INCEPTION) TO JUNE 30, 2006
                             (STATED IN US DOLLARS)
                                   (UNAUDITED)

                                                                                                             DEFICIT
                                                                                                           ACCUMULATED
                                                                                  ADDITIONAL                DURING THE
                                                            COMMON STOCK            PAID-IN       SHARE    DEVELOPMENT
                                                      *SHARES      **PARVALUE       CAPITAL    SUBSCRIBED     STAGE       TOTAL
                                                       ------        --------       -------    ----------     -----       -----

<S>                                                   <C>          <C>          <C>             <C>       <C>           <C>
Capital stock subscribed pursuant to an
 offering memorandum for cash
                              - at $0.0000002         122,172,000  $  122,172   $    (121,968)  $     -   $        -    $     204
                                                      -----------  ----------   -------------   -------   ----------    ---------

Balance, December 31, 2000                            122,172,000     122,172        (121,968)        -            -          204
Capital stock issued pursuant to a private placement
- at $0.0025                                           27,108,400      27,108          40,663         -            -       67,771
                              - at $0.05                  160,000         160           7,840         -            -        8,000
Net loss for the year                                           -           -               -         -      (69,885)     (69,885)
                                                      -----------  ----------   -------------   -------   ----------    ---------

Balance, December 31, 2001                            149,440,400     149,440         (73,465)        -      (69,885)       6,090
Capital stock issued pursuant to a private placement
- at $0.05                                                480,000         480          23,520         -            -       24,000
Net loss for the year                                           -           -               -         -      (30,090)     (30,090)
                                                      -----------  ----------   -------------   -------   ----------    ---------

Balance, December 31, 2002                            149,920,400     149,920         (49,945)        -      (99,975)           -
Net income for the year                                         -           -               -         -          108          108
                                                      -----------  ----------   -------------   -------   ----------    ---------

Balance, December 31, 2003                            149,920,400     149,920         (49,945)        -      (99,867)         108
Net loss for the year                                           -           -               -         -      (36,453)     (36,453)
                                                      -----------  ----------   -------------   -------   ----------    ---------

Balance, December 31, 2004                            149,920,400     149,920         (49,945)        -     (136,320)     (36,345)


                                                                                                                         .../cont'd
</TABLE>
                             SEE ACCOMPANYING NOTES
                                                                               4
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<PAGE>

<TABLE>
<CAPTION>
                                                                                                             DEFICIT
                                                                                                           ACCUMULATED
                                                                                  ADDITIONAL                DURING THE
                                                            COMMON STOCK            PAID-IN       SHARE    DEVELOPMENT
                                                      *SHARES      **PARVALUE       CAPITAL    SUBSCRIBED     STAGE        TOTAL
                                                       ------        --------       -------    ----------     -----        -----

<S>                                                  <C>           <C>          <C>            <C>         <C>          <C>

Capital stock issued pursuant to conversion of
convertible debentures        - at $0.05                1,145,424       1,146          56,125           -            -      57,271
Net loss for the year                                           -           -               -           -      (34,650)    (34,650)
                                                      ------------  ----------  -------------  ----------- ------------  ----------

Balance, December 31, 2005                            151,065,824     151,066           6,180           -     (170,970)    (13,724)
Capital stock retired to the treasury                (116,000,000)   (116,000          87,000                        -     (29,000)
Share subscribed                                                -           -               -   1,850,000            -   1,850,000
Finders' fees on private placement                              -           -               -    (140,000)           -    (140,000)
Net loss for the period                                         -           -               -           -   (1,420,031) (1,420,031)
                                                      ------------  ----------  -------------  ----------- ------------ -----------

Balance, June 30, 2006                                 35,065,824  $   35,066$  $      93,180  $1,710,000  $(1,591,001) $  247,245
                                                      ============  ==========  =============  =========== ============ ===========

</TABLE>


*    The common stock issued has been retroactively restated to reflect a
     forward stock split of 1,500 new shares for one old share, effective
     January 5, 2001 and a forward split of four new shares for one old share,
     effective February 20, 2006 (Note 6).
**   The par value of common stock has been retroactively restated to reflect a
     change from no par value to a par value of $0.001 per share.

                             SEE ACCOMPANYING NOTES

                                                                               5
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<PAGE>

                               RADIAL ENERGY INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND
               2005 AND FOR THE PERIOD FROM JUNE 30, 2000 (DATE OF
                         INCORPORATION) TO JUNE 30, 2006
                                   (UNAUDITED)


Note 1        INTERIM REPORTING

              The accompanying unaudited interim financial statements have been
              prepared by Radial Energy Inc. (the "Company") pursuant to the
              rules and regulations of the United States Securities and Exchange
              Commission. Certain information and disclosures normally included
              in annual financial statements prepared in accordance with
              accounting principles generally accepted in the United States of
              America have been condensed or omitted pursuant to such rules and
              regulations. In the opinion of management, all adjustments and
              disclosures necessary for a fair presentation of these financial
              statements have been included. Such adjustments consist of normal
              recurring adjustments. These interim financial statements should
              be read in conjunction with the audited financial statements of
              the Company for the fiscal year ended December 31, 2005.

              The results of operations for the six months ended June 30, 2006
              are not indicative of the results that may be expected for the
              full year.

Note 2        CONTINUANCE OF OPERATIONS

              These interim financial statements have been prepared in
              accordance with generally accepted accounting principles
              applicable to a going concern, which assumes that the Company will
              be able to meet its obligations and continue its operations for
              its next twelve months. Realization values may be substantially
              different from carrying values as shown and these financial
              statements do not give effect to adjustments that would be
              necessary to the carrying values and classification of assets and
              liabilities should the Company be unable to continue as a going
              concern. At June 30, 2006, the Company had not yet achieved
              profitable operations, has accumulated losses of $1,591,001 since
              its inception, has a working capital deficiency of $1,898,584 and
              expects to incur further losses in the development of its
              business, all of which casts substantial doubt about the Company's
              ability to continue as a going concern. The Company's ability to
              continue as a going concern is dependent upon its ability to
              generate future profitable operations and/or to obtain the
              necessary financing to meet its obligations and repay its
              liabilities arising from normal business operations when they come
              due. The Company anticipates that additional funding will be in
              the form of equity financing from the sale of common shares. The
              Company may also seek to obtain short-term loans from the
              directors of the company. The Company has obtained a financing of
              $250,000 pursuant to a promissory note (Note 9).

Note 3        ADDITIONAL ACCOUNTING POLICIES

              OIL AND GAS PROPERTIES

              The Company follows the full cost method of accounting for oil and
              gas operations whereby all costs of exploring for and developing
              oil and gas reserves are initially capitalized on a
              country-by-country (cost centre) basis. Such costs include land
              acquisition costs, geological and geophysical expenses, carrying
              charges on non-producing properties, costs of drilling and
              overhead charges directly related to acquisition and exploration
              activities.

              Costs capitalized, together with the costs of production
              equipment, are depleted and amortized on the unit-of-production
              method based on the estimated gross proved reserves. Petroleum
              products and reserves are converted to a common unit of measure,
              using 6 MCF of natural gas to one barrel of oil.

              Costs of acquiring and evaluating unproved properties are
              initially excluded from depletion calculations. These unevaluated
              properties are assessed periodically to ascertain whether
              impairment has occurred. When proved reserves are assigned or the


                                                                               6
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<PAGE>

              property is considered to be impaired, the cost of the property or
              the amount of the impairment is added to costs subject to
              depletion calculations.

              Future net cash flows from proved reserves using period-end,
              non-escalated prices and costs, are discounted to present value
              and compared to the carrying value of oil and gas properties.

              Proceeds from a sale of petroleum and natural gas properties are
              applied against capitalized costs, with no gain or loss
              recognized, unless such a sale would alter the rate of depletion
              by more than 20%. Royalties paid net of any tax credits received
              are netted with oil and gas sales.

              EQUIPMENT AND DEPRECIATION

              Equipment is recorded at cost and depreciated over their estimated
              useful lives using the declining balance method. Additions are
              depreciated at half the annual rate in the year of acquisition.

Note 4        EQUIPMENT

<TABLE>
<CAPTION>

                                                                                                December 31, 2005
                                                           June 30, 2006
                                         ---------------------------------------------------    ------------------
                                                             Accumulated
                                              COST          DEPRECIATION          NET                  NET

<S>                                      <C>              <C>               <C>                 <C>
             Computer equipment          $       1,015    $           -     $       1,015       $           -
                                         =============    =============     =============       =============

</TABLE>

Note 5       OIL AND GAS PROPERTIES


                                                  June 30,        December 31,
                                                    2006              2005
                                                    ----              ----

             Anticline Project
                Advance                       $     1,400,000   $             -
                Geological consulting                  44,814                 -
                                              ---------------   ---------------

                                                    1,444,814                 -

             Cherokee County Project
                Advance                               700,000                 -
                                              ---------------   ---------------

                                              $     2,144,814   $             -
                                              ===============   ===============

              i)  Anticline Project

                  On May 11, 2006, the Company entered into a Joint Operating
                  Agreement ("JOA") with Peruvian and American companies whereby
                  the Company acquired a 20% working interest and 18% revenue
                  interest in an oil project located in Peru by funding the
                  acquisition of certain equipment, for the shipment of this
                  equipment to the project site in Peru and for the drilling,
                  testing and evaluation of the first exploratory well on the
                  property in the total amount of $1,650,000.

                  After the drilling of the first well is complete, the Company
                  will have the option whether to proceed with the project by
                  funding the drilling, testing and evaluation of another two
                  wells on the property for an additional $1,650,000. This
                  additional investment will also cover the costs to install
                  production facilities, including pipeline and loading dock,
                  tank batteries and pumping units as required to deliver the
                  produced oil to market. Thereafter, the Company will have the
                  option to pay for its 20% working interest share of the
                  development and operation of the project.

                                                                               7
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<PAGE>

                  In the event the Company and the transacting parties decide
                  that the project is not feasible, the equipment acquired will
                  be sold and the Company will be entitled to 67% of the
                  proceeds.

                  At June 30, 2006, the Company had advanced $1,400,000 towards
                  the acquisition of the equipment and the remaining $250,000
                  was advanced subsequent to June 30, 2006.

              ii) Cherokee County Project

                  By an assignment agreement dated June 27, 2006, the Company
                  has agreed to acquire a working interest from a Canadian
                  company in three separate exploratory oil and gas prospects
                  located in Cherokee County, Texas, under three leasehold
                  assignment agreements with a company in Texas. In
                  consideration for the assignment, the Company has agreed to
                  pay $700,000 within 90 days of the assignment agreement with
                  the vendor retaining a 4% overriding royalty. The payment
                  covers the Company's share of the estimated capital
                  expenditures to drill and complete the first test wells on
                  each of the three prospects. The leasehold agreement for all
                  three prospects includes a 30% working interest before payout
                  of initial investment of the Canadian company and a 22.5%
                  working interest after payout, with payout determined on a per
                  project basis.

                  In the event that the Company fails to make the payment, the
                  Canadian company has the option to have the rights of the
                  agreement revert back or to receive from the Company a penalty
                  payment in the amount of 120% of the $700,000 consideration
                  and at its option, the amount shall be convertible into the
                  securities of the Company at a price equal to the lowest
                  offering price of the Company's securities to the general
                  public during the current fiscal year.

Note 6        CAPITAL STOCK - Note 8

              Effective on January 5, 2001, the Company forward split its issued
              common stock on the basis of 1,500 new for one old.

              On May 25, 2004, the Company amended its authorized capital stock
              to 75,000,000 common shares with a par value of $0.001 per share.
              The number of authorized shares and the par value per share as
              referred to in these financial statements has been restated
              wherever applicable to give retroactive effect to this amendment.

              On February 10, 2006, the Company repurchased a total of
              29,000,000 pre-forward split (116,000,000 post-forward split)
              common shares at $0.001 per share from the previous President of
              the Company by the issuance of a promissory note for $29,000
              bearing interest at 8% per annum and due August 10, 2006. The
              Company repaid $20,000 of the promissory note on March 27, 2006,
              which was accepted as payment in full. Consequently the balance of
              the note and related interest was written off during the three
              months ended March 31, 2006.

              On February 10, 2006, the Company approved a private placement
              offering of 8,000,000 units at $0.25 per unit for proceeds of
              $2,000,000. The company will pay finders' fees totaling $150,000
              for this plant. Each unit consists of one common share and one
              stock purchase warrant exercisable for two years into one common
              share at $0.30 per share. At June 30, 2006, the Company had
              received shares subscriptions for cash totaling $1,850,000 and
              accrued finders' fees totaling $140,000 ($87,500 paid at June 30,
              2006). Subsequent to June 30, 2006, the Company completed the
              private placement offering and received the remaining $150,000 in
              share subscriptions (less the finders' fees of $7,500) and issued
              the shares.

              Effective on February 20, 2006, the Company forward split its
              issued common stock on the basis of four new for one old. The
              number of shares referred to in these financial statements has
              been restated wherever applicable to give retroactive effect on
              the forward stock splits. There was no effect on the Company's
              authorized share capital.

              The retroactive restatement of the issued common shares is
              required by the Securities and Exchange Commission's Staff
              Accounting Bulletin, Topic 4c. In actuality, the forward stock
              split, of four for one is effective after the Company's repurchase
              of 29,000,000 pre-forward split (116,000,000 post-forward split
              common shares). Consequently, the number of shares actually issued
              immediately prior to the split was 8,766,456 pre-forward split

                                                                               8
================================================================================

<PAGE>

              common shares (35,065,824 post-forward split common shares). The
              actual number of common shares, both pre-forward split and
              post-forward split, are less than the number of common shares
              authorized of 75,000,000.

              On March 29, 2006, the officers of the Company approved a plan of
              merger between the Company and Radial Energy Inc. a wholly-owned
              inactive subsidiary of the Company incorporated in the State of
              Colorado on April 10, 2006 by the Company. Under the plan of
              merger, the shares of Radial Energy Inc. were cancelled and the
              shareholders of the Company received one share of the newly-merged
              company for every share of BV Pharmaceutical, Inc. held. The
              purpose of the merger was to facilitate a name change to Radial
              Energy Inc.

Note 7        RELATED PARTY TRANSACTIONS - Note 8

              The Company incurred the following amounts charged by a former
              director of the Company and directors and officers of the Company
              pursuant to employment agreements (Note 8):

<TABLE>
<CAPTION>
                                                                                                            June 30,
                                                                                                              2000
                                                                                                            (Date of
                                                    Three months ended           Six months ended        Inception) to
                                                         June 30,                    June 30,               June 30,
                                                    2006          2005          2006          2005            2006
                                                    ----          ----          ----          ----            ----

<S>                                             <C>            <C>          <C>            <C>          <C>
             Consulting fees                    $         -    $        -   $      9,000   $         -  $        9,000
             Executive compensation and
              benefits                              1,259,800           -      1,259,800             -       1,259,800
                                                -------------  ----------   ------------   -----------  --------------

                                                $ 1,259,800    $        -   $  1,268,800   $         -  $    1,268,800
                                                ===========    ==========   ============   ===========  ==============
</TABLE>

              As at June 30, 2006, due to related parties consists of executive
              compensation and benefits owing to directors and officers of the
              Company. These amounts are unsecured, non-interest bearing and
              have no specific terms of repayment.

Note 8        COMMITMENTS - Note 9

              i)  By an employment agreement dated March 10, 2006 with the
                  President of the Company, and effective April 1, 2006, the
                  Company will pay $180,000 per year plus annual bonuses as
                  determined by the Board of Directors of the Company. In
                  addition, the President will receive a $400 per month auto
                  allowance, $800 per month insurance reimbursement and a
                  minimum $1,000 per month for rental and administrative
                  expenses to maintain an office. The Company may also issue
                  stock options to the President as deemed appropriate by the
                  Board of Directors. The term of the agreement is 3 years.

              ii) By an employment agreement dated June 1, 2006, with the Chief
                  Operating Officer of the Company, and effective June 1, 2006,
                  the Company will pay $132,000 per year plus annual bonuses as
                  determined by the Board of Directors of the Company. In
                  addition, the Chief Operating Officer will receive a $400 per
                  month auto allowance, $800 per month reimbursement of the
                  costs of the medical insurance coverage and a minimum $1,000
                  per month for rental and administrative expenses to maintain
                  an office. The Company may also issue stock options to the
                  Chief Operating Officer as deemed appropriate by the Board of
                  Directors. The term of the agreement is 3 years. In addition
                  the Company agreed to issue 1,500,000 common shares for
                  additional services to be provided to the Company valued at
                  $1,200,000. As at June 30, 2006, this amount has been included
                  in due to related parties. These shares were issued subsequent
                  to June 30, 2006.

              iii)By a business consulting agreement dated April 1, 2006, the
                  Company will pay $10,000 per month for investor relations
                  services for a term of two years.

                                                                               9
================================================================================


<PAGE>


Note 9        SUBSEQUENT EVENTS - Notes 6 and 8

              Subsequent to June 30, 2006, the Company received $250,000
              pursuant to a promissory note. The note is unsecured, bears
              interest at 12% per annum and will mature on July 12, 2007.

Note 10       NON-CASH TRANSACTION

              Investing and financing activities that do not have a direct
              impact on current cash flows are excluded from the statements of
              cash flows. During the period ended June 30, 2006, the Company
              repurchased 116,000,000 common shares by the issuance of a
              promissory note for $29,000. This transaction was excluded from
              the statements of cash flows.

Note 11       DISCONTINUED OPERATIONS

              During the six months ended June 30, 2006, concurrent with the
              name change of the Company (Note 6), the Company announced its
              intention to shift its direction of business towards the
              acquisition, exploration and development of oil and gas projects.
              Previously, the Company's business was the collection, analysis
              and banking of personal DNA data. Assets, liabilities and results
              of operations from the Company's previous business have been
              disclosed as discontinued operations for the six months ended June
              30, 2006 and prior periods have been restated to conform with the
              current presentation.

              The balance sheets include the following amounts related to
discontinued operations:

<TABLE>
<CAPTION>
                                                                                    June 30,        December 31,
                                                                                      2006              2005
                                                                                      ----              ----
<S>                                                                             <C>               <C>
            Current assets of discontinued operations:
              Accounts receivable                                               $             -   $         1,000
                                                                                ===============   ===============

            Current liabilities of discontinued operations:
              Unearned revenue                                                  $             -   $         7,500
                                                                                ===============   ===============

</TABLE>

              Net income (loss) from discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                                                                        June 30, 2000
                                                                                                           (Date of
                                                Three months ended             Six months ended         Inception) to
                                                     June 30,                      June 30,                June 30,
                                                2006           2005           2006          2005             2006
                                                ----           ----           ----          ----             ----

<S>                                        <C>             <C>            <C>           <C>            <C>
            Revenues
              License fees                 $          -    $          -   $         -   $          -   $       24,000
              Other income                            -               -         8,500            480           10,180
                                           ------------    ------------   -----------   ------------   --------------

                                                      -               -         8,500            480           34,180
                                           ------------    ------------   -----------   ------------   --------------

            Administrative expenses
              Bad debt                                -               -             -              -            1,000
              Intellectual property
               acquisition costs                      -               -             -              -           50,000
              Marketing research
               And development                        -               -             -              -           10,000
                                           ------------    ------------   -----------   ------------   --------------

                                                      -               -             -              -           61,000
                                           ------------    ------------   -----------   ------------   --------------

            Income (loss) from
             discontinued operations       $          -    $          -   $     8,500   $        480   $      (26,820)
                                           ============    ============   ===========   ============   ==============
</TABLE>

                                                                              10
================================================================================

<PAGE>

              Cash flows from discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                                                                       June 30, 2000
                                                                                                         (Date of
                                                                                                       Inception) to
                                                                       Six months ended June 30,         June 30,
                                                                           2006           2005             2006
                                                                           ----           ----             ----

<S>                                                                   <C>             <C>           <C>
            Net income (loss) from discontinued operations            $       8,500   $        480  $         (26,820)
            Changes in non-cash working capital balances
             related to operations
               Accounts receivable                                            1,000              -                -
               Unearned revenue                                              (7,500)         7,500                -
                                                                      -------------   ------------  ---------------

            Increase (decrease) in cash from discontinued
             operations                                               $       2,000   $      7,980  $         (26,820)
                                                                      =============   ============  =================

</TABLE>


                                                                              11
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<PAGE>

ITEM 2.  MANAGEMENT'S PLAN OF OPERATION

CAUTIONARY STATEMENT

         You should read the following discussion and analysis in conjunction
with the financial statements and related notes thereto contained in Part I,
Item 1 of this report. The information contained in this Quarterly Report on
Form 10-QSB is not a complete description of our business or the risks
associated with an investment in our common stock. We urge you to carefully
review and consider the various disclosures made by us in this report and in our
other reports filed with the Securities and Exchange Commission, or SEC, that
discuss our business in greater detail.

         This report contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Reference is made in particular to the description of our plans and
objectives for future operations, assumptions underlying such plans and
objectives, and other forward-looking statements included in this report. Such
statements may be identified by the use of forward-looking terminology such as
"may," "will," "expect," "believe," "estimate," "anticipate," "intend,"
"continue," or similar terms, variations of such terms or the negative of such
terms. Such statements are based on management's current expectations and are
subject to a number of factors and uncertainties, which could cause actual
results to differ materially from those described in the forward-looking
statements. Such statements address future events and conditions concerning,
among others, capital expenditures, earnings, litigation, regulatory matters,
liquidity and capital resources and accounting matters. Actual results in each
case could differ materially from those anticipated in such statements by reason
of factors such as future economic conditions, changes in consumer demand,
legislative, regulatory and competitive developments in markets in which we
operate, results of litigation and other circumstances affecting anticipated
revenues and costs. We expressly disclaim any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement
is based.

         As used in this Form 10-QSB, "we," "us" and "our" refer to Radial
Energy Inc., which is also sometimes referred to as the "Company."

CORPORATE HISTORY

         Our company was incorporated in the State of Nevada on June 30, 2000,
under the name of "All Printer Supplies.com." On April 17, 2003, we changed our
name to "BV Pharmaceuticals, Inc." and became a provider of information and
services in the areas of personal DNA collection, analysis, profiling, banking
and DNA profile database maintenance. Effective as of April 3, 2006, through a
statutory merger with our wholly owned subsidiary in which we were the surviving
corporation, we changed our name to "Radial Energy Inc."

GENERAL

         We are a development stage company that has not generated revenues from
our current operations in the oil and gas industry. There is no historical
financial information about Radial Energy upon which to base an evaluation of
our performance. We cannot guarantee we will be successful in our new core
business or in any business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited
capital resources and in the exploration of oil and gas reserves.

         We have no assurance that future financing will be available on
acceptable terms. If financing is not available on satisfactory terms, we may be
unable to continue with our current business plan. If equity financing is

                                                                              12
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<PAGE>

available to us on acceptable terms, it could result in additional dilution to
our existing stockholders.

BUSINESS

         In March 2006, we began a new business plan concentrating on the
acquisition, exploration, development, and production of domestic and
international oil and gas projects. Radial Energy's primary focus is on
identifying previously drilled but subsequently abandoned wells that encountered
and/or tested live oil or natural gas indicating the presence of marketable
hydrocarbons, reservoir, and trap. As of the date of filing of this report, we
have acquired working interests in projects in South America and in Texas and
are continuing to explore other opportunities in North and Latin America.

         BLOCK 100, HUAYA ANTICLINE, PERU

         Pursuant to a Letter of Intent dated April 19, 2006, and a related
Joint Operating Agreement effective as of May 11, 2006, we have acquired rights
to a 20% working interest and 18% revenue interest in the Huaya Anticline
Project, Block 100 oil prospect located in the Ucayali Basin, Peru. The project
encompasses a structural closure of approximately 500 acres, with the potential
for up to 41 well locations. We acquired the interest in the Block 100 project
from Ziegler-Peru, Inc., an American company based in Texas, which sold the
interest to us and will retain a 10 percent interest. The majority interest is
owned by the concession-holder, Compania Consultora de Petroleo, S.A., a
well-known consulting company based in Lima, Peru. While Compania Consultora is
the operator of record for the concession, Ziegler-Peru will act as contract
driller and operator for the block.

         As consideration for this interest, which is only for one well, we
agreed to pay a total of $1,650,000, which funds also cover the acquisition of
certain equipment to be used for drilling, testing, and evaluation of the first
well. As of the date of the filing of this report, we have paid in full our
total financial obligation for the first well.

         After drilling of the first well is complete, we will have the option
to proceed with the project by funding the drilling, testing and evaluation of
another two wells on the property for an additional $1,650,000, which funds are
expected to cover the acquisition and installation of all production facilities
required to bring the hydrocarbons produced to market. Thereafter, we will have
the option to pay for our 20% working interest share of the development and
operation of the project. In the event Radial Energy and the other participating
parties decide that the project is not feasible, the equipment acquired will be
sold and we will be entitled to 67% of the proceeds.

         A third-party geological assessment conducted by Gustavson Associates
of Boulder, Colorado, a consultant contracted by Radial Energy, estimates that
the Block 100 project, if successful, may have recoverable in place reserves
between 15 and 29.5 million barrels of oil (MMBO). While management believes the
prospect is a low-risk opportunity to discover and develop a field with
production potential, there can be no assurance the prospect will achieve such
potential. The first well is expected to be drilled by the end of the third
quarter of 2006, with production anticipated by year end.

         CHEROKEE COUNTY, TEXAS

         Pursuant to an Assignment Agreement dated June 27, 2006, we acquired
all of the rights and obligations of Pin Petroleum Partners Ltd., a Canadian
company, under three leasehold assignment agreements to properties located in
Cherokee County, Texas (collectively, the "Cherokee Agreements") with Skyline
Energy LLC, a company based in Texas. The prospects involve three separate
exploratory oil and gas prospects, known as the Junction Prospect, the Northwest
Jacksonville Prospect, and the Highway 79 Prospect. As consideration for the
assignment, we agreed to pay Pin Petroleum Partners a total of $700,000 within

                                                                              13
================================================================================

<PAGE>

90 days of the assignment along with a four percent overriding royalty interest
from our share of net revenue interest. Prior to the assignment, Pin Petroleum
Partners had provided to the operator of the prospects, MLC Operating, LP,
$443,790 to cover the original estimates for the drilling and completion costs
for the initial well on each of the three prospects. This pre-payment by Pin
Petroleum Partners has been assigned to Radial Energy. The funds will cover our
share of the estimated capital expenditures to drill the first test wells on
each of the three prospects. If one or more of these initial wells results in a
successful discovery, the operator may request additional funds to cover
completion costs if the original funds do not cover the current costs of
completion. For each of the three prospects, we hold a 30% working interest
before payout of initial investment, and a 22.5% working interest after payout,
with payout determined on a project basis.

         The Junction Prospect is located in northwestern Cherokee County,
approximately five miles southwest of Jacksonville, Texas. This oil and natural
gas prospect's leasehold covers approximately 500 acres. The Northwest
Jacksonville Prospect leasehold covers approximately 350 acres located in
northern Cherokee County. The Highway 79 Prospect is located in northwestern
Cherokee County, one mile west of Jacksonville, Texas, and the prospect leases
cover approximately 340 net acres. While calculations based on preliminary
geological analysis, reservoir studies and interpretation estimate that the
prospects have oil and natural gas production potential, there is no assurance
that any such potential will be achieved. We anticipate that drilling and
testing in the prospects will begin during the third quarter of 2006.

         ONGOING ACTIVITIES

         Management is currently investigating and in some cases is negotiations
with various parties in both the U.S. and Colombia to acquire both producing and
prospective assets, but as of the date of this report had not reached formal
agreement on any of these opportunities.

DESCRIPTION OF PROPERTY

         The agreements relating to the Block 100 prospect entitle us to a 20%
working interest in oil and gas leases covering approximately 500 acres in the
Huaya Anticline Project, Block 100 oil prospect located in the Ucayali Basin,
Peru. The leases have a primary term of 30 years from and after March 2004.

         Pursuant to the Assignment Agreement and our resulting rights under
the Cherokee Agreements, for each of the Junction Prospect, the Northwest
Jacksonville Prospect, and the Highway 79 Prospect, we hold a 30% working
interest before payout of initial investment, and a 22.5% working interest after
payout. The leases have primary terms of three years and are renewable so long
as drilling operations occur during the primary terms.

         Our principal office is located at 1313 East Maple Street, Suite 223,
Bellingham, Washington 98225. The office is part of a new office complex that
offers a full range of office services. We rent a single office on a
month-to-month lease at a rate of approximately $800 per month in rent and
incidentals.

PLAN OF OPERATION

         Our business plan is to identify, acquire, and develop low-risk oil
and gas exploration and development opportunities throughout North and South
America, with a primary focus on identifying previously drilled but subsequently
abandoned exploratory wells that encountered and/or tested live oil or natural
gas. We are flexible in our approach and will pursue opportunities as they arise
both in North America and in countries throughout Latin America that are
friendly to foreign investments, where factors such as lower production taxes
and positive government incentives provide for significant opportunities with

                                                                              14
================================================================================

<PAGE>

low risk. We plan to become the operator of record in the majority of our future
projects. To date, execution of our business plan has largely focused on
acquiring prospective rights to oil and gas leases and properties. We intend to
establish a going forward exploration and development plan.

         Since inception, we have funded our operations primarily from the
private placement of common stock and warrants. Although we expect that, during
the next 12 months, our operating capital needs will be met from our current
economic resources and by additional private capital stock transactions, there
can be no assurance that funds required will be available on terms acceptable to
us or at all. Without additional financing, we expect that our current working
capital will be able to fund our operations through September 2006. If we are
unable to raise sufficient funds on terms acceptable to us, we may be unable to
complete our business plan. If equity financing is available to us on acceptable
terms, it could result in additional dilution to our stockholders.

         As of the date of the filing of this report, we have two full-time
employees, our Chief Executive Officer and our Chief Operating Officer. We do
not expect any material changes in the number of employees over the next 12
months. However, if we are successful in our initial and any subsequent drilling
programs, we may retain additional employees. We have relied on, and will
continue to rely on, outside consultants for services.

         COMPETITORS

         The oil and gas industry is intensely competitive. We compete with
numerous individuals and companies, including many major oil and gas companies,
which have substantially greater technical, financial, and operational resources
and staffs. Accordingly, there is a high degree of competition for desirable oil
and gas leases, suitable properties for drilling operations, and necessary
drilling equipment, as well as for access to funds. There are other competitors
that have operations in South America and the Texas area and the presence of
these competitors could adversely affect our ability to acquire additional
leases and rights to properties.

         GOVERNMENT REGULATIONS

         Our oil and gas operations are subject to various United States
federal, state, and local governmental regulations. Matters subject to
regulation include discharge permits for drilling operations, drilling and
abandonment bonds, reports concerning operations, the spacing of wells, and
pooling of properties and taxation. From time to time, regulatory agencies have
imposed price controls and limitations on production by restricting the rate of
flow of oil and gas wells below actual production capacity in order to conserve
supplies of oil and gas. The production, handling, storage, transportation and
disposal of oil and gas, by-products thereof, and other substances and materials
produced or used in connection with oil and gas operations are also subject to
regulation under federal, state, provincial and local laws and regulations
relating primarily to the protection of human health and the environment. To
date, expenditures related to complying with these laws, and for remediation of
existing environmental contamination, have not been significant in relation to
the results of operations of our company. The requirements imposed by such laws
and regulations are frequently changed and subject to interpretation, and we are
unable to predict the ultimate cost of compliance with these requirements or
their effect on our operations.

RISK FACTORS

         Ownership of our common stock involves a high degree of risk. You
should consider carefully the factors set forth below, as well as other
information contained in this quarterly report.

THERE IS NO ASSURANCE THAT WE WILL OPERATE PROFITABLY OR WILL GENERATE POSITIVE
CASH FLOW IN THE FUTURE.

                                                                              15
================================================================================

<PAGE>


         If we cannot generate positive cash flows in the future, or raise
sufficient financing to continue our normal operations, then we may be forced to
scale down or even close our operations. In particular, additional capital may
be required in the event that:

         o drilling and completion costs for further wells increase beyond our
expectations; or

         o we encounter greater costs associated with general and
administrative expenses or offering costs.


         The occurrence of any of the aforementioned events could adversely
affect our ability to meet our business plans.

         We will depend almost exclusively on outside capital to pay for the
continued exploration and development of our properties. Such outside capital
may include the sale of additional stock and/or commercial borrowing. Capital
may not continue to be available if necessary to meet these continuing
exploration and development costs or, if the capital is available, that it will
be on terms acceptable to us. The issuance of additional equity securities by us
would result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

         If we are unable to obtain financing in the amounts and on terms
deemed acceptable to us, we may be unable to continue our business and as a
result may be required to scale back or cease operations for our business, the
result of which would be that our stockholders would lose some or all of their
investment.

A DECLINE IN THE PRICE OF OUR COMMON STOCK COULD AFFECT OUR ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR OPERATIONS.

         A prolonged decline in the price of our common stock could result in a
reduction in the liquidity of our common stock and a reduction in our ability to
raise capital. Because our operations have been primarily financed through the
sale of equity securities, a decline in the price of our common stock could be
especially detrimental to our liquidity and our continued operations. Any
reduction in our ability to raise equity capital in the future would force us to
reallocate funds from other planned uses and would have a significant negative
effect on our business plans and operations, including our ability to develop
new projects and continue our current operations. If our stock price declines,
we may not be able to raise additional capital or generate funds from operations
sufficient to meet our obligations.

WE HAVE A LIMITED OPERATING HISTORY, AND IF WE ARE NOT SUCCESSFUL IN CONTINUING
TO GROW OUR BUSINESS, THEN WE MAY HAVE TO SCALE BACK OR EVEN CEASE OUR ONGOING
BUSINESS OPERATIONS.

         Our company has a limited operating history and must be considered in
the development stage. The success of the company is significantly dependent on
a successful acquisition, drilling, completion and production program. Our
company's operations will be subject to all the risks inherent in the
establishment of a developing enterprise and the uncertainties arising from the
absence of a significant operating history. We may be unable to locate
recoverable reserves or operate on a profitable basis. We are in the development
stage and potential investors should be aware of the difficulties normally
encountered by enterprises in the development stage. If our business plan is not
successful, and we are not able to operate profitably, investors may lose some
or all of their investment in our company.

                                                                              16
================================================================================

<PAGE>

OUR COMPANY'S INDEPENDENT AUDITORS HAVE EXPRESSED A RESERVATION THAT OUR COMPANY
CAN CONTINUE AS A GOING CONCERN.

         Our company's operations have been limited to general administrative
operations and a limited amount of exploration. Our company's ability to
continue as a going concern is dependent on our ability to raise additional
capital to fund future operations and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
company's ability to continue as a going concern.

TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S "PENNY STOCK" REGULATIONS
WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.

          The U.S. Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors." The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of, our common stock.

NASD SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO BUY
AND SELL OUR STOCK.

         In addition to the "penny stock" rules described above, the NASD has
adopted rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the NASD believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock and have an adverse effect on the market for
our shares.

TRADING IN OUR COMMON SHARES ON THE OTC BULLETIN BOARD IS LIMITED AND SPORADIC
MAKING IT DIFFICULT FOR OUR SHAREHOLDERS TO SELL THEIR SHARES OR LIQUIDATE THEIR
INVESTMENTS.

                                                                              17
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<PAGE>

         Our common shares are currently quoted on the OTC Bulletin Board. The
trading price of our common shares has been subject to wide fluctuations.
Trading prices of our common shares may fluctuate in response to a number of
factors, many of which will be beyond our control. The stock market has
generally experienced extreme price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of companies with no
current business operation. There can be no assurance that trading prices and
price earnings ratios previously experienced by our common shares will be
matched or maintained. These broad market and industry factors may adversely
affect the market price of our common shares, regardless of our operating
performance.

         In the past, following periods of volatility in the market price of a
company's securities, securities class-action litigation has often been
instituted. Such litigation, if instituted, could result in substantial costs
for us and a diversion of management's attention and resources.

BECAUSE OF THE EARLY STAGE OF DEVELOPMENT AND THE NATURE OF OUR BUSINESS, OUR
SECURITIES ARE CONSIDERED HIGHLY SPECULATIVE.

         Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of its development. We
are engaged in the business of exploring and, if warranted, developing
commercial reserves of oil and gas. Our properties are in the exploration stage
only and are without known reserves of oil and gas. Accordingly, we have not
generated any revenues nor have we realized a profit from our operations to date
and there is little likelihood that we will generate any revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon locating and developing economic reserves of oil and gas,
which itself is subject to numerous risk factors as set forth herein. Since we
have not generated any revenues, we will have to raise additional monies through
the sale of our equity securities or debt in order to continue our business
operations.

AS OUR PROPERTIES ARE IN THE EXPLORATION AND DEVELOPMENT STAGE THERE CAN BE NO
ASSURANCE THAT WE WILL ESTABLISH COMMERCIAL DISCOVERIES ON OUR PROPERTIES.

         Exploration for economic reserves of oil and gas is subject to a
number of risk factors. Few properties that are explored are ultimately
developed into producing oil and/or gas wells. Our properties are in the
exploration stage only and are without proven reserves of oil and gas. We may
not establish commercial discoveries on any of our properties.

THE POTENTIAL PROFITABILITY OF OIL AND GAS VENTURES DEPENDS UPON FACTORS BEYOND
THE CONTROL OF OUR COMPANY.

         The potential profitability of oil and gas properties is dependent
upon many factors beyond our control. For instance, world prices and markets for
oil and gas are unpredictable, highly volatile, potentially subject to
governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to worldwide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
will likely materially affect our financial performance.

         Adverse weather conditions can also hinder drilling operations. A
productive well may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances. The marketability
of oil and gas which may be acquired or discovered will be affected by numerous
factors beyond our control. These factors include the proximity and capacity of
oil and gas pipelines and processing equipment, market fluctuations of prices,

                                                                              18
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<PAGE>

taxes, royalties, land tenure, allowable production and environmental
protection. These factors cannot be accurately predicted and the combination of
these factors may result in our company not receiving an adequate return on
invested capital.

COMPETITION IN THE OIL AND GAS INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO
ASSURANCE THAT WE WILL BE SUCCESSFUL IN ACQUIRING THE LEASES.

         The oil and gas industry is intensely competitive. We compete with
numerous individuals and companies, including many major oil and gas companies,
which have substantially greater technical, financial and operational resources
and staffs. Accordingly, there is a high degree of competition for desirable oil
and gas leases, suitable properties for drilling operations and necessary
drilling equipment, as well as for access to funds. We cannot predict if the
necessary funds can be raised or that any projected work will be completed. Our
budget anticipates our acquisition of additional acreage in Nevada. This acreage
may not become available or if it is available for leasing, that we may not be
successful in acquiring the leases. There are other competitors that have
operations in the Nevada area and the presence of these competitors could
adversely affect our ability to acquire additional leases.

THE MARKETABILITY OF NATURAL RESOURCES WILL BE AFFECTED BY NUMEROUS FACTORS
BEYOND OUR CONTROL WHICH MAY RESULT IN US NOT RECEIVING AN ADEQUATE RETURN ON
INVESTED CAPITAL TO BE PROFITABLE OR VIABLE.

         The marketability of natural resources which may be acquired or
discovered by us will be affected by numerous factors beyond our control. These
factors include market fluctuations in oil and gas pricing and demand, the
proximity and capacity of natural resource markets and processing equipment,
governmental regulations, land tenure, land use, regulation concerning the
importing and exporting of oil and gas and environmental protection regulations.
The exact effect of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital to be profitable or viable.

OIL AND GAS OPERATIONS ARE SUBJECT TO COMPREHENSIVE REGULATION WHICH MAY CAUSE
SUBSTANTIAL DELAYS OR REQUIRE CAPITAL OUTLAYS IN EXCESS OF THOSE ANTICIPATED
CAUSING AN ADVERSE EFFECT ON OUR COMPANY.

         Oil and gas operations are subject to federal, state, and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and gas operations are also subject to federal, state, and
local laws and regulations which seek to maintain health and safety standards by
regulating the design and use of drilling methods and equipment. Various permits
from government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. Environmental
standards imposed by federal, provincial, or local authorities may be changed
and any such changes may have material adverse effects on our activities.
Moreover, compliance with such laws may cause substantial delays or require
capital outlays in excess of those anticipated, thus causing an adverse effect
on us. Additionally, we may be subject to liability for pollution or other
environmental damages which it may elect not to insure against due to
prohibitive premium costs and other reasons. To date we have not been required
to spend any material amount on compliance with environmental regulations.
However, we may be required to do so in future and this may affect our ability
to expand or maintain our operations.

EXPLORATION AND PRODUCTION ACTIVITIES ARE SUBJECT TO CERTAIN ENVIRONMENTAL
REGULATIONS WHICH MAY PREVENT OR DELAY THE COMMENCEMENT OR CONTINUANCE OF OUR
OPERATIONS.

         In general, our exploration and production activities are subject to
certain federal, state and local laws and regulations relating to environmental
quality and pollution control. Such laws and regulations increase the costs of
these activities and may prevent or delay the commencement or continuance of a
given operation. Compliance with these laws and regulations has not had a
material effect on our operations or financial condition to date. Specifically,

                                                                              19
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<PAGE>

we are subject to legislation regarding emissions into the environment, water
discharges and storage and disposition of hazardous wastes. In addition,
legislation has been enacted which requires well and facility sites to be
abandoned and reclaimed to the satisfaction of state authorities. However, such
laws and regulations are frequently changed and we are unable to predict the
ultimate cost of compliance. Generally, environmental requirements do not appear
to affect us any differently or to any greater or lesser extent than other
companies in the industry.

         We believe that our operations comply, in all material respects, with
all applicable environmental regulations.

         We are not fully insured against all possible environmental risks.

EXPLORATORY DRILLING INVOLVES MANY RISKS AND WE MAY BECOME LIABLE FOR POLLUTION
OR OTHER LIABILITIES, WHICH MAY HAVE AN ADVERSE EFFECT ON OUR FINANCIAL
POSITION.

         Drilling operations generally involve a high degree of risk. Hazards
such as unusual or unexpected geological formations, power outages, labor
disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or
adequate machinery, equipment or labor, and other risks are involved. We may
become subject to liability for pollution or hazards against which it cannot
adequately insure or which it may elect not to insure. Incurring any such
liability may have a material adverse effect on our financial position and
operations.

ANY CHANGE TO GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE
IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY.

         The laws, regulations, policies or current administrative practices of
any government body, organization or regulatory agency in the United States or
any other jurisdiction, may be changed, applied or interpreted in a manner which
will fundamentally alter the ability of our company to carry on our business.
The actions, policies or regulations, or changes thereto, of any government body
or regulatory agency, or other special interest groups, may have a detrimental
effect on us. Any or all of these situations may have a negative impact on our
ability to operate and/or our profitably.

OUR BYLAWS CONTAIN PROVISIONS INDEMNIFYING OUR OFFICERS AND DIRECTORS AGAINST
ALL COSTS, CHARGES AND EXPENSES INCURRED BY THEM.

         Our Bylaws contain provisions with respect to the indemnification of
our officers and directors against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, actually and reasonably
incurred by him, including an amount paid to settle an action or satisfy a
judgment in a civil, criminal or administrative action or proceeding to which he
is made a party by reason of his being or having been one of our directors or
officers.

INVESTORS' INTERESTS IN OUR COMPANY WILL BE DILUTED AND INVESTORS MAY SUFFER
DILUTION IN THEIR NET BOOK VALUE PER SHARE IF WE ISSUE ADDITIONAL SHARES OR
RAISE FUNDS THROUGH THE SALE OF EQUITY SECURITIES.

         In the event that we are required to issue any additional shares or
enter into private placements to raise financing through the sale of equity
securities, investors' interests in our company will be diluted and investors
may suffer dilution in their net book value per share depending on the price at
which such securities are sold. If we issue any such additional shares, such
issuances also will cause a reduction in the proportionate ownership and voting
power of all other shareholders. Further, any such issuance may result in a
change in our control.

                                                                              20
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<PAGE>

OUR BYLAWS DO NOT CONTAIN ANTI-TAKEOVER PROVISIONS, WHICH COULD RESULT IN A
CHANGE OF OUR MANAGEMENT AND DIRECTORS IF THERE IS A TAKE-OVER OF OUR COMPANY.

         We do not currently have a shareholder rights plan or any
anti-takeover provisions in our Bylaws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a
change in our management and directors.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005

         From inception to June 30, 2006, we had a loss of $1,591,001. Of this
amount, $1,396,529 was generated in the three-month period ended June 30, 2006
and $1,420,031 was generated in the six-month period ended June 30, 2006, as
compared to $7,130 and $21,586, respectively, for the comparable periods in
2005.

         Administrative expenses increased from $7,130 for the three-month
period ended June 30, 2005 to $1,396,529 for the comparable period in 2006 and
increased from $22,066 for the six-month period ended June 30, 2005 to
$1,437,938 for the same period in 2006. The costs expended for the three and six
months ended in 2006 include $15,564 and $29,518, respectively, for consulting
fees; $31,657 and $41,657, respectively, for investor relations services; and
$10,431 and $15,852, respectively, for travel and related costs. In addition,
for the six months ended June 30, 2006, we expended $8,500 in administrative
fees, $1,259,800 in executive compensation and benefits, $29,150 in marketing
management services, and $3,321 in rent for office space. None of the
aforementioned expenses were expended during the comparable periods in 2005.

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 2006, our total assets were $2,240,623, which included
cash balance of $55,259 and prepaid expenses of $39,535. In addition, it
included $2,144,814 we invested in the Block 100 project and the Cherokee County
project. Our total liabilities were $1,993,378, all of which were current,
resulting in a deficiency in working capital of $1,898,584. As of December 31,
2005, our total assets were $2,211, all of which were current, and our total
liabilities were $15,935. The increase in total assets is a result of an
increase in cash from the sale of our equity units as part of a private
placement which commenced in February 2006. During the six-month period ended
June 30, 2006, we have received subscriptions for a total of 7,400,000 units
from which we received total cash proceeds of $1,850,000. Each unit consisted of
one share of our common stock and one stock purchase warrant exercisable for two
years into one share of common stock at $0.30 per share. For a discussion on our
investments to date with respect to our current exploratory projects, see also
the discussion in the Business section above.

         Despite our negative cash flow from operating activities of $711,723
for the six-month period ended June 30, 2006 and our investment and costs
associated with our oil and gas exploration participations of $2,145,829, we
have been able to obtain additional operating capital through private equity
funding sources. Management's plan includes the continued development and
eventual implementation of our business plan as discussed in the Plan of
Operation section above. We have relied upon equity funding since inception.

         As of the date of this report, we have yet to generate any revenues
from operations of our new core business. From inception to June 30, 2006, we
have accumulated losses of $1,591,001 and expect to incur further losses in the
development of our business, all of which casts doubt about Radial Energy's
ability to continue as a going concern. Our ability to continue as a going
concern is dependent upon our ability to generate future profitable operations
and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they become due.

                                                                              21
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<PAGE>


OFF-BALANCE SHEET ARRANGEMENTS

         We have no off-balance sheet arrangements at June 30, 2006.


ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term
is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934, as amended. Based on this evaluation, our principal executive officer and
our principal financial officer concluded that, as of the end of the period
covered by this quarterly report, our disclosure controls and procedures were
effective to ensure that the information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act of 1934 is
accumulated and communicated to management, including our chief executive
officer and chief financial officer, to allow timely decisions regarding
required disclosure, and that such information is recorded, processed,
summarized and reported within the time periods prescribed by the SEC.

CHANGES IN INTERNAL CONTROLS

         There were no significant changes in our internal controls or in other
factors that could materially affect these controls subsequent to the evaluation
date. We have not identified any significant deficiencies or material weaknesses
in our internal controls, and therefore there were no corrective actions taken.



                                                                              22
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<PAGE>



                           PART II--OTHER INFORMATION


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         From March 14, 2006 through June 2006, we sold to investors pursuant to
subscription agreements an aggregate of 7,400,000 units (each, a "Unit," and
collectively, the "Units"), consisting of shares of our common stock and
warrants to purchase our common stock in a private placement offering (the
"Private Placement"). Each Unit consisted of one share of common stock and a
warrant to purchase one share of common stock. The purchase price was $0.25 per
Unit. The warrants have an exercise period of two years and an exercise price of
$0.30 per share. As of June 30, 2006, we have received subscriptions for
7,400,000 Units and total cash proceeds of $1,850,000. The Private Placement has
a minimum offering amount of $100,000 and a maximum offering amount of
$2,000,000, which terms were previously approved by the Company's board of
directors in February 2006, as previously disclosed in the Company's Form 8-K
filed on February 17, 2006 and which is incorporated herein by reference. Since
June 30, 2006, the Company sold an additional 600,000 Units for a total of
$150,000 and concluded the Private Placement.

         In connection with the Private Placement, we paid an aggregate of
$147,500 as finders' fee.

         The securities sold by Radial Energy in the Private Placement were
exempt from registration under the Securities Act of 1933, as amended, pursuant
to Regulation S promulgated thereunder and pursuant to the exemption from
provided by Section 4(2) of the Securities Act for issuances not involving a
public offering.

ITEM 5.  OTHER INFORMATION

         As previously reported in our Form 8-K filed on April 21, 2006, which
disclosure is incorporated herein by reference, on April 19, 2006, Radial Energy
entered into a Letter of Intent with Zeigler-Peru, Inc. in connection with the
Huaya Anticline Project, Block 100 oil prospect located in the Ucayali Basin,
Peru. Pursuant to the Letter of Intent and a related Joint Operating Agreement
effective as of May 11, 2006, we have acquired rights to a 20% working interest
and 18% revenue interest in the Block 100 project. This acquisition constitutes
an acquisition of a significant amount of assets for Radial Energy. Item 2 of
this quarterly report describes in more detail the Block 100 project and the
terms of the acquisition. In addition, Item 2 of this quarterly report also
describes our subsequent acquisition of the Cherokee County projects and the
terms of the acquisition.

         In our Form 8-K filed on April 21, 2006, we also reported the
repurchase by Radial Energy on February 10, 2006 of 29,000,000 shares, on a
pre-split basis, of our common stock held by Art Bandenieks, a former director,
and our former President and Secretary. The shares repurchased were cancelled
and no longer outstanding. Prior to the repurchase, Mr. Bandenieks was the
holder of record of 30,543,000 shares, on a pre-split basis, of our common
stock, representing 80.9% of Radial Energy's then outstanding capital stock. As
of immediately after the repurchase, Mr. Bandenieks's ownership of the company's
common stock was reduced to 1,543,000 shares, on a pre-split basis, which
represented 4.1% of our then outstanding capital stock. The repurchase resulted
in a change in control of Radial Energy, as Mr. Bandenieks's ownership of the
company's then outstanding capital stock was reduced from a majority position of
80.9% to 4.1 percent.

         As previously reported on our Form 8-K filed on April 21, 2006, Mr.
Bandenieks resigned as a director, and as our President and Secretary, on
February 10, 2006. G. Leigh Lyons was appointed as director, and as our
President and Secretary, to replace the vacancies created by Mr. Bandenieks's

                                                                              23
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<PAGE>

resignation. At that time, our Board of Directors was then comprised of Mr.
Lyons, then 47 years old, and Lee Southern. We previously provided a description
of Mr. Lyons's business experience and other relevant information related to his
appointment in the Form 8-K filed on April 21, 2006, which is incorporated
herein by reference.

         Subsequently, on April 17, 2006, Lee Southern resigned as a director,
and as our Treasurer and Chief Financial Officer. Mr. Lyons was then appointed
as Treasurer and Chief Financial Officer of the company, and the vacancy on the
Board of Directors created by Mr. Southern's resignation remained open until a
suitable replacement was found.

         Subsequently, on June 1, 2006, Omar Michael Hayes was appointed to
serve as our Chief Operating Officer. At the same time, Mr. Hayes, then 41 years
old, was also appointed as a director, filling the vacancy created by Mr.
Southern's resignation. We previously provided a description of Mr. Hayes's
business experience and other relevant information related to his appointment in
the Form 8-K filed on June 7, 2006, which is incorporated herein by reference.

ADDITIONAL INFORMATION PURSUANT TO ITEM 2.01(F) OF FORM 8-K AND ITEM 5.01(A)(8)
IS PROVIDED BELOW:

         For a detailed description of Radial Energy's business and property
reflecting the consummation of the acquisition of the assets described above and
as of after the change in control, please see the discussion under the Business
section in Item 2 of this quarterly report. Similarly, our Plan of Operation and
Risk Factors are also discussed in Item 2 of this quarterly report.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

         We do not currently compensate our directors in cash for their service
as members of our board of directors. We do reimburse our directors for
reasonable expenses in connection with attendance at board meetings.

         At the end of our last completed fiscal year, our Chief Executive
Officer was Art Bandenieks, who was also our then President, Secretary, and a
director, and our Chief Financial Officer was Lee Southern, who was also our
then Treasurer and a director. As previously reported in our Form 10-KSB for
fiscal 2005, which is incorporated herein by reference with respect to the
compensation of directors and executive officers with respect to Mr. Bandenieks
and Mr. Southern, we did not pay any executive compensation since our inception
for their services.

         As discussed above, on February 10, 2006, G. Leigh Lyons was
appointed as director, and as our President and Secretary, and on April 17,
2006, Mr. Lyons became our Treasurer and Chief Financial Officer. In connection
with Mr. Lyons's appointment, he entered into an employment agreement with
Radial Energy, the term of which began on April 1, 2006. A description of the
material the terms of the employment agreement were previously reported in our
Form 8-K filed on April 21, 2006 and is incorporated herein by reference. In
connection with his appointment, Mr. Lyons acquired 2,672,000 shares of our
common stock from Art Bandenieks for which he paid $65.

         As discussed above, on June 1, 2006, Omar Michael Hayes was appointed
to serve as our Chief Operating Officer and also as a director. In connection
with his appointment, Mr. Hayes entered into an employment agreement with Radial
Energy on June 1, 2006, the terms of which were previously reported in our Form
8-K filed on June 7, 2006 and which is incorporated herein by reference.

COMMITTEES OF THE BOARD OF DIRECTORS


                                                                              26
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<PAGE>

         We do not have standing audit, nominating or compensation committees
of the Board of Directors, or committees performing similar functions, and
therefore our entire Board of Directors performs such functions. We are not
currently listed on any national exchange and are not required to maintain such
committees by any self-regulatory agency. We do not believe it is necessary for
our Board of Directors to appoint such committees because the volume of matters
that come before our Board of Directors for consideration permits each director
to give sufficient time and attention to such matters to be involved in all
decision making. All directors participate in the consideration of director
nominees. We do not have a policy with regard to attendance at board meetings.

         We do not have a policy with regard to consideration of nominations of
directors. We accept nominations for directors from our security holders. There
is no minimum qualification for a nominee to be considered by our directors. All
of our directors will consider any nomination and will consider such nomination
in accordance with his or her fiduciary responsibility to the company and its
shareholders.

         Security holders may send communications to our Board of Directors by
writing to Radial Energy Inc., 1313 East Maple St., Suite 223, Bellingham,
Washington 98225, attention Board of Directors or any specified director. Any
correspondence received at the foregoing address to the attention of one or more
directors is promptly forwarded to such director or directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
shares of common stock beneficially owned or deemed to be beneficially owned as
of August 10, 2006 by: (i) each person known to us to be the beneficial owner of
more than 5% of our common stock , (ii) each of our directors, (iii) each
executive officer named in the Compensation of Directors and Executive Officers
section above, and (iv) all directors and officers as a group:

<TABLE>
<CAPTION>

                                                            Common Stock              Percent
       Name(1)                                              Beneficially Owned(2)     of Class(3)
       ---------------------------------------------------- ------------------------- ------------------------------
<S>                                                                       <C>                                 <C>
       G. Leigh Lyons...................................    ...............2,672,000  .........................6.0%
       Omar Michael Hayes...............................    ...............1,500,000  .........................3.4%
       Art Bandenieks(4) ...............................    .......................0  ............................*
       Lee Southern(4)..................................    .......................0  ............................*
       All directors and executive
          officers as a group (2 persons)(4)............    ...............4,172,000  .........................9.4%
       ---------------------------------------------------- ------------------------- ------------------------------
</TABLE>
                                 *Less than 1%

NOTES TO BENEFICIAL OWNERSHIP TABLE:

(1)      Except as otherwise noted in these notes, the mailing address of the
         individuals listed is c/o Radial Energy Inc., 1313 East Maple St.,
         Suite 223, Bellingham, Washington 98225.

(2)      The number of shares beneficially owned includes shares of common stock
         in which a person has sole or shared voting power and/or sole or shared
         investment power. Each person named reportedly has sole voting and
         investment powers with respect to the common stock beneficially owned
         by that person, subject to applicable community property and similar
         laws. On August 10, 2006, there were 44,565,824 shares of common stock,
         $.001 par value, outstanding.

(3)      Common stock not outstanding but which underlies options and rights
         (including warrants) vested as of, or vesting within, 60 days after
         August 10, 2006, is deemed to be outstanding for the purpose of
         computing the percentage of the common stock beneficially owned by each
         named person (and the directors and executive officers as a group), but
         is not deemed to be outstanding for any other purpose.

                                                                              25
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<PAGE>


(4)      As discussed above, Mr. Bandenieks resigned as director and from his
         executive office positions effective on February 10, 2006, and Mr.
         Southern resigned as a director and from his executive office positions
         effective on April 17, 2006. Since they are not executive officers and
         directors of Radial Energy as of August 10, 2006, for purposes of the
         beneficial ownership table above, they are not included in all
         directors and executive officers as a group but are listed to show
         their ownership of the company individually. Mr. Bandenieks's mailing
         address is 2876 - 252 Street, Aldergrove, British Columbia, Canada, V4W
         2R2.

VOTING SECURITIES

         Our authorized capital stock consists of 75,000,000 shares of common
stock, $0.001 par value. Our common stock is the only class of voting securities
issued and outstanding. Each share of common stock is entitled to one vote. As
of August 10, 2006 (after adjustment for the 4-for-1 forward stock split and the
return to our treasury for cancellation of 29,000,000 shares of our common
stock), there were 44,565,824 shares of our common stock issued and outstanding.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

         Our common stock, par value $.001, is currently quoted on the OTC
Bulletin Board under the symbol "RENG.OB"; however, active trading market in our
common stock did not commence until February 2006. We completed a 4-for-1
forward stock split of our issued and outstanding shares of common stock on
February 20, 2006.

         The following table sets forth the high and low bid prices for our
common stock for the periods indicated. Such quotations are taken from
information provided by Exshare and reflect inter dealer prices, without retail
mark-up, mark-down or commissions, and may not necessarily represent actual
transactions.

         ----------------------------------------------------------------------
               QUARTER ENDED         HIGH                 LOW
         ----------------------------------------------------------------------
               June 30, 2006         $1.02               $0.61
         ----------------------------------------------------------------------
               March 31, 2006        $1.25               $0.25
         ----------------------------------------------------------------------

         On August 10, 2006, the last closing price for a share of our common
stock was $1.00, as reported by the OTC Bulletin Board. As of August 10, 2006,
there were approximately 49 holders of record of our common stock.

         We have never declared or paid any cash dividends on our common stock.
For the foreseeable future, we expect to retain any earnings to finance the
operation and expansion of our business.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Our Bylaws provide indemnification by the company of any individual
made a party to proceeding because he is or was an officer, director, employee
or agent of the company against liability incurred in the proceeding, to the
fullest extent permissible under the laws of Nevada. The Bylaws provide that the
company advance the expenses of officers and directors incurred in defending any
such proceeding, provided that the company received an undertaking from such
person to repay the expenses advanced if it is ultimately determined that he is
not entitled to be indemnified.

ITEM 6.  EXHIBITS

3(i)        Articles of Merger filed with the Nevada Secretary of State
            effective as of April 3, 2006. (Incorporated by reference to Exhibit
            2 of Radial Energy Inc.'s Current Report on Form 8-K filed on April
            21, 2006.)

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<PAGE>

10.1*       Form of Subscription Agreement.
10.2*       Form of Common Stock Purchase Warrant.
10.3*       Letter of Intent by and between Radial Energy Inc. and Ziegler-Peru
            Inc. dated April 19, 2006.
10.4*       Joint Operating Agreement by and between Radial Energy Inc.,Ziegler-
            Peru Inc., and Compania Consultora de Petroleo, S.A. effective as of
            May 11, 2006.
10.5*       Employment Agreement by and between Radial Energy Inc. and G. Leigh
            Lyons dated March 10, 2006.
10.6*       Employment Agreement by and between Radial Energy Inc. and Omar
            Michel Hayes dated June 1, 2006.
10.7*       Assignment Agreement by and between Radial Energy Inc. and Pin
            Petroleum Partners Ltd. dated June 27, 2006.
31.1*       Certifications of the Chief Executive Officer provided pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*       Certifications of the Chief Financial Officer provided pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*       Certifications of the Chief Executive Officer and Chief Financial
            Officer provided pursuant to 18 U.S.C. Section 1350 as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*Filed herewith.


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<PAGE>



                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                           RADIAL ENERGY INC.


                           By:           /S/  G. LEIGH LYONS
                                ------------------------------------------------
                                G. Leigh Lyons
                                President, Chief Executive Officer, and Chief
                                Financial Officer
                                (Principal Executive and Financial Officer)



Date:   August 17, 2006


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<PAGE>




                                  EXHIBIT INDEX


EXHIBIT
NUMBER          DESCRIPTION OF EXHIBIT


3(i)        Articles of Merger filed with the Nevada Secretary of State
            effective as of April 3, 2006. (Incorporated by reference to Exhibit
            2 of Radial Energy Inc.'s Current Report on Form 8-K filed on April
            21, 2006.)
10.1*       Form of Subscription Agreement.
10.2*       Form of Common Stock Purchase Warrant.
10.3*       Letter of Intent by and between Radial Energy Inc. and Ziegler-Peru
            Inc. dated April 19, 2006.
10.4*       Joint Operating Agreement by and between Radial Energy Inc.,Ziegler-
            Peru Inc., and Compania Consultora de Petroleo, S.A. effective as of
            May 11, 2006.
10.5*       Employment Agreement by and between Radial Energy Inc. and G. Leigh
            Lyons dated March 10, 2006.
10.6*       Employment Agreement by and between Radial Energy Inc. and Omar
            Michel Hayes dated June 1, 2006.
10.7*       Assignment Agreement by and between Radial Energy Inc. and Pin
            Petroleum Partners Ltd. dated June 27, 2006.
31.1*       Certifications of the Chief Executive Officer provided pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*       Certifications of the Chief Financial Officer provided pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*       Certifications of the Chief Executive Officer and Chief Financial
            Officer provided pursuant to 18 U.S.C. Section 1350 as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*Filed herewith.


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