U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

            (Mark one)

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

                    For the fiscal year ended March 31, 2006

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
       For the transition period from _______________ to ________________


                        Commission File Number: 000-29780


                              SOLPOWER CORPORATION
                 (Name of Small Business Issuer in its Charter)

        Nevada                                               87-0384678
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                            Identification No.)

                 307 East 22nd Street                          90731
                    San Pedro, CA                            (Zip Code)
       (Address of principal executive offices)

                                 (310) 940-6408
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act: None Securities
registered under Section 12(g) of the Exchange Act: Common Stock, $.01 par value
per share (Title of Class)

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

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

Registrant's revenues for the fiscal year ended March 31, 2006 were $569,008.

The aggregate market value of the common stock held by non-affiliates computed
based on the closing price of such stock on April 13, 2007, was approximately
$XXXXXXXXX .

The number of shares outstanding of the registrant's classes of common stock, as
of March 31, 2006 was 70,559,727 shares. No shares of the registrant's preferred
stock were outstanding.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format (check one):    Yes        No  X
                                                               ----         ---
<PAGE>
                           SOLPOWER CORPORATION
                         - - - - - - - - - - - - -


                     INDEX TO THE FORM 10-KSB FOR THE
                     FISCAL YEAR ENDED MARCH 31, 2006


ITEM 1.    DESCRIPTION OF BUSINESS............................................ 1
ITEM 2.    DESCRIPTION OF PROPERTY............................................ 8
ITEM 3.    LEGAL PROCEEDINGS.................................................. 8
ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................ 8
ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........... 9
ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.......... 9
ITEM 7.    FINANCIAL STATEMENTS...............................................13
ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE...............................................14
ITEM 8A.   CONTROLS AND PROCEDURES............................................14
ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
           COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT; AUDIT
           COMMITTEE FINANCIAL EXPERT; CODE OF ETHICS.........................15
ITEM 10.   EXECUTIVE COMPENSATION.............................................16
ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....18
ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................18
ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K...................................19
ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.............................19


<PAGE>
                                     PART I

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

Except for historical information contained herein, this Form 10-KSB contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). We intend that the
forward-looking statements be subject to the safe harbors created by these
statutory provisions.

Forward-looking statements involve risks and uncertainties and include, but are
not limited to, statements of future events, our plans and expectations,
financial projections and performance and acceptance of our product in the
marketplace. We may make additional written or oral forward-looking statements
from time to time in filings with the Securities and Exchange Commission
("SEC"), through press releases or otherwise. Wherever possible, we have
identified these forward-looking statements by words such as "believes,"
"anticipates," "contemplates," "expects," "intends," "projects," "plans,"
"forecasts," "estimates" and similar expressions. These statements reflect our
current views about future events and financial performance or operations and
are applicable only as of the date the statements are made. Our actual results
may differ materially from these statements. Factors that may cause or
contribute to differences include, but are not limited to, those discussed in
"DESCRIPTION OF BUSINESS - FACTORS AFFECTING FUTURE PERFORMANCE" and
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS," as well as those
factors discussed elsewhere in this Form 10-KSB and in any exhibits attached.

Although we believe that the assumptions underlying our forward-looking
statements in this Form 10-KSB are reasonable, any of the assumptions could
prove inaccurate. There can be no assurance that the results contemplated in
forward-looking statements will be realized. In addition, as disclosed under
"DESCRIPTION OF BUSINESS - FACTORS AFFECTING FUTURE PERFORMANCE," our business
and operations are subject to substantial risks which increase the uncertainties
inherent in the forward-looking statements included in this Form 10-KSB.

The inclusion of forward-looking information should not be regarded as a
representation that the future events, plans or expectations, financial
projections and performance or acceptance of our products and services in the
marketplace will be achieved. We disclaim any obligation to subsequently revise
forward-looking statements to reflect any change in our expectations or due to
the occurrence of unanticipated events.

ITEM 1.  DESCRIPTION OF BUSINESS

General Development of Business

We are in the business of producing, marketing and distributing Soltron(R), a
proprietary enzyme-based fuel enhancing product. Our business plan contemplates
distributing this product on a worldwide basis.

Solpower was originally incorporated in Utah in 1982 as Dynafuel Corporation and
our original business involved research and development of an experimental fuel
using alcohol and other chemicals in a proprietary combination to produce a
gasoline-like motor fuel. In July 1996, we merged into a newly-formed subsidiary
incorporated in Nevada to change our corporate domicile. In November 1996, we
entered into a licensing agreement with Dominion Capital Pty Ltd. ("Dominion
Capital") to acquire the exclusive manufacturing, distribution, marketing and
sales rights for Soltron(R) in the United States, Canada and Mexico. As a result
of entering into this licensing agreement, Dominion Capital and its affiliates
gained control of Solpower and a new Board of Directors and new management were
installed. A corporate philosophy of acquiring and commercializing
environmentally friendly products was initiated. In June 1998, we entered into a
second licensing agreement with Dominion Capital and acquired the exclusive
manufacturing, distribution, marketing and sales rights for the product
SP34E(TM) in the United States, Canada and Mexico. In December 2000, we acquired
the E*COR enzyme division of Perix Industries, Inc., including all the rights to
the KLEAN product line. KLEAN is a line of enzyme-based cleaners and
bio-remediation and petroleum deposit control agents. We discontinued the KLEAN
product line in the fiscal year ended March 31, 2003.

                                       1
<PAGE>
On January 31, 2003, we acquired the outstanding shares of Virtual Technologies
for 6,000,000 shares of our unregistered, restricted common stock. As a result
of this acquisition, we gained the exclusive, worldwide manufacturing,
distribution, marketing and sales rights to SP34E(TM) and the related
refrigerant gas products, SP22E-A, SP22E-B and SP22E-C.

On February 20, 2003, we acquired the exclusive worldwide manufacturing,
distribution, marketing and sales rights to Soltron(R) pursuant to an
Acquisition Agreement with Dominion Capital, under which we issued 9,000,000
shares of our restricted common stock. During the year ended March 31, 2004,
management determined that this asset was impaired for accounting purposes and
wrote-off the capitalized amounts related to these rights. We still control
these marketing rights and continue to market our Soltron(R) product.

On September 30, 2005, we sold all the outstanding shares of Virtual
Technologies to Les Woolridge or Assigns in exchange for a royalty equal to four
percent (4%) of gross sales of SP34E(TM) (excluding taxes and freight) for a
period of twenty years, payable quarterly.

Products

We market and distribute Soltron(R), a proprietary enzyme-based fuel enhancing.
We currently distribute this product primarily through sales channels in the
United States, Central America, American Samoa, Europe and Australia.

Soltron(R). Soltron(R) is an enzyme-based liquid fuel-enhancing product that was
developed over a period of 18 years by a group of scientists at the Japanese
Institute of Bio-Energy. Use data has shown that when added to liquid fossil
fuels Soltron(R) reduces particulate exhaust emissions and smoke, improves fuel
economy, controls fuel sludge and other impurities and ultimately lowers engine
maintenance costs. In addition, when mixed with liquid fuels, Soltron(R) changes
the fuel's molecular structure and improves its oxygen absorption and combustion
efficiency. Soltron(R)'s enzymes are naturally powerful surfactants and
dispersants. Damaging fuel contaminants such as sludge, fungi and mold are
broken down and lose their ability to stick to tank walls and lines. The
resulting microscopic particulate is combusted, while larger contaminants are
filtered out. The dispersion of microbial contamination reduces corrosive attack
on fuel tanks, pumps and injectors. Soltron(R) can be added to all liquid fossil
fuels including gasoline, diesel and light and heavy oils at the fuel pump or in
bulk fuel tanks and has gained acceptance in the marine industry where
biological fuel contamination is a persistent problem.

Soltron(R) is marketed as a natural enzyme product that will reduce emissions,
improve fuel economy and reduce engine maintenance. Soltron(R) has been sold
commercially in Japan since 1993 and in Australia since 1996 and was awarded the
1997 Best New Aftermarket Product Award (Chemical) by the Australian Automotive
Aftermarket Association.

Suppliers

Soltron(R). Soltron(R) consists of natural organic enzymes mixed with low odor
base solvent. The enzyme concentrate used in the manufacture of Soltron(R) is
produced exclusively by IBE Company Ltd., of Tokyo, Japan and supplied to us
through our licensing agreement with Dominion Capital. IBE Company Ltd., has
indicated that it will be able to supply the enzyme concentrate in sufficient
quantities to meet our anticipated needs. Low odor base solvent is readily
available through numerous local suppliers. We contract on a specific order
basis with third parties to blend and bottle this product. We do not have any
long-term contracts for our blending and bottling, but believe these services
are readily available. We have also developed our own proprietary bottle design
for retail packaging.

Marketing Strategies

We monitor acceptance of our existing product through direct contact and
feedback with the end users. We have established a corporate communications
system supported by an in-house desktop publishing department that enables us to
upgrade our corporate image with improved logos, Web site updates, product
brochures, product labeling and packaging and all related marketing materials.

Soltron(R). The fuel market may be divided into distinct groups such as
gasoline, diesel and bunker fuel users. These groups can be further subdivided
into distinct user segments, such as commercial transport fleets, government
fleets, marine transport fleets, retail and industrial distribution. We believe
that Soltron(R) is able to benefit fuel consumers in all of these markets.

                                       2
<PAGE>
The United States Environmental Protection Agency ("EPA") designated a number of
"non-attainment zones" in areas with severe emission problems, resulting in
certain fleet operators being forced to test or to start using alternative fuels
such as biodiesel, ethanol, propane or natural gas. New regulations continue to
be imposed to regulate fuel specifications and exhaust emissions. We believe
that this increased regulation will create opportunities for consumer acceptance
of Soltron(R). We are currently focusing on all North American markets, as well
as developing a global marketing plan to exploit opportunities in international
territories that use lower grade fuels that can better benefit from Soltron(R)
and where higher fuel prices better reflect the economies of Soltron(R)'s use.

We are currently utilizing distributors, oil marketers, independent sales
representatives and direct sales activities to provide a focused marketing
effort, which we believe will expose Soltron(R) directly to prospective
customers. We employ a national sales manager who develops and services
distributors and independent sales representatives throughout the United States,
Canada and Mexico. We also utilize other traditional distribution channels
including a Web site and resale distribution through retail chains such as NAPA.
In addition, through private labeling arrangements, we also sell Soltron(R)
through Ocean Bio-Chem, Inc. (dba Starbrite) under the brand name "Startron,"
and through Xtra Export Trade under the brand name "XBee," throughout all of the
European Union countries.

Product Rights Agreements

Soltron(R). In 1996, we acquired the exclusive rights to produce, market and
distribute Soltron(R) in North America through an agreement with Dominion
Capital in consideration for 5,000,000 shares of our common stock and the grant
of certain options and payment of cash consideration upon meeting certain sales
levels. The agreement was amended in 1997 and had a five-year term that was
renewable at our option for an additional five-year term. On February 20, 2003,
we acquired the exclusive worldwide manufacturing, distribution, marketing and
sales rights to Soltron(R) pursuant to an Acquisition Agreement with Dominion
Capital, under which we issued 9,000,000 shares of our restricted common stock.
Under that agreement, we obtained exclusive rights to Soltron(R) for a period of
twenty years, with an option to renew for an additional twenty years, subject to
termination for good cause.

SP34E(TM). In June 1998, we acquired the exclusive rights to produce, market and
distribute SP34E(TM) in North America through an agreement with Dominion Capital
in consideration for 6,000,000 shares of our common stock and the payment to
Dominion Capital of a royalty of $2.25 per kilogram (subsequently amended to
2.5% of gross sales) of SP34E(TM) that we sell. The term of the agreement
commenced on July 1, 2000, continues for five years and was renewable for an
additional five years at our option. On January 31, 2003, we acquired the
outstanding shares of Virtual Technologies for 6,000,000 shares of our
restricted common stock. As a result of this acquisition, we gained the
exclusive, worldwide manufacturing, distribution, marketing and sales rights to
SP34E(TM) and the related refrigerant gas products, SP22E-A, SP22E-B and
SP22E-C. This acquisition terminated the aforementioned royalty obligation of
2.5% of gross SP34E(TM) sales. Virtual Technologies has licensed SP34E(TM) and
granted exclusive manufacturing and distribution rights in Australia and New
Zealand to A-Gas. On September 30, 2005, we sold all the outstanding shares of
Virtual Technologies to Les Woolridge or Assigns in exchange for a royalty equal
to four percent (4%) of gross sales of SP34E(TM) (excluding taxes and freight)
for a period of twenty years payable quarterly.

Proprietary Rights

We rely on a combination of trade secret and copyright laws and confidentiality
and non-competition agreements to establish and protect our proprietary rights
in our product. However, there can be no assurance that any confidentiality or
non-competition agreement between us and our employees or consultants will
provide meaningful protection for our proprietary information in the event of
any unauthorized use or disclosure of such proprietary information.

We have registered the trademark "Soltron(R)" and the service mark "Solpower(R)"
with the United States Patent and Trademark Office ("USPTO"). We have also
registered Soltron(R) with the EPA for use as an aftermarket additive and for
bulk fuel treatment.

                                       3
<PAGE>
Competition

We compete with numerous well-established fuel additive and chemical products
companies that possess substantially greater experience and financial,
marketing, personnel and other resources than we do. Many of our competitors
have achieved significant national, retail and local brand name and product
recognition and engage in extensive advertising and promotional programs, both
generally and in response to efforts by additional competitors to enter new
markets and to introduce new products.

Some products already in the marketplace that may compete directly with
Soltron(R) include STP(R) Gas Treatment, STP(R) Diesel Treatment and STP(R)
Smoke Treatment (all produced by First Brands Corporation), Lucas Oil Fuel
Treatment (produced by Lucas Oil Products, Inc.), Slick 50(R) (produced by Slick
50 Products Corporation), Valvtect(R) Dieselguard (produced by Valvtect
Petroleum Products Corp.) and Fuelon(R) (produced by Fuelon International,
Inc.). These fuel additives make similar claims of performance benefits but are
based upon older conventional chemical technologies. We believe Soltron(R) is
the only enzyme-based fuel technology currently on the market, and we believe it
offers a greater range of benefits at a lower cost than our competitor's
conventional chemical additives. Based on Soltron(R)'s penetration in the West
Coast recreational marine industry, we believe we can differentiate Soltron(R)
from our competitors' products, successfully compete with them and penetrate
additional fuel additive markets. See "DESCRIPTION OF BUSINESS-Product" above.

Our ability to compete successfully will depend on our success at penetrating
each targeted market segment with our product, consumer acceptance of our
product and our ability to license and develop new and improved products. There
can be no assurance that we will be able to successfully compete, that our
product will meet with consumer approval, that competitors will not develop and
market products that are similar or superior to our product or that we will be
able to successfully enhance our product or develop new products meeting with
consumer approval.

Regulation

The use of certain chemicals and other substances is subject to extensive and
frequently changing federal, state, provincial and local laws and substantial
regulation under these laws by governmental agencies, including the EPA, the
Occupational Health and Safety Administration, various state agencies and county
and local authorities acting in conjunction with federal and state authorities.
Among other things, these regulatory bodies impose requirements to control air,
soil and water pollution, to protect against occupational exposure to chemicals,
including health and safety risks, and to require notification or reporting of
the storage, use and release of certain hazardous chemicals and substances. We
provide all required warning labels and instructions for the handling of these
substances.

Aftermarket fuel additives are required to be registered with the EPA Fuels and
Energy Division. We have registered Soltron(R) both as an additive and for the
bulk treatment of fuels.

Like all companies, we are also subject to regulation by the Federal Trade
Commission ("FTC") with respect to the marketing of our products. Although the
FTC has a long history of pursuing enforcement actions against fuel saving, fuel
additive and oil additive products, we believe we have sufficient research,
independent testing, use data and scientific evidence to substantiate our
advertising and promotional claims regarding Soltron(R).

We believe that we are in substantial compliance with all laws and regulations
governing our material business operations and we have obtained all required
licenses and permits for the operation of our business. There can be no
assurance, however, that we will be able to comply with, or continue to comply
with, current or future government regulations in every jurisdiction in which we
may conduct material business operations without substantial cost or
interruption of our operations, or that any present or future federal, state,
provincial or local environmental protection regulations or other laws may not
restrict our present and future activities. In the event that we are unable to
comply with such requirements, we could be subject to substantial sanctions,
including restrictions on our business operations, monetary liability and
criminal sanctions, any of which could have a material adverse effect upon our
business.

                                       4
<PAGE>
Employees

At March 31, 2006, we employed one full time sales person. Our employee is not
covered by any collective bargaining agreement and we consider our relationship
with our employee to be good.

RISK FACTORS

Risks Affecting Our Business

     Limited Operating History

 Our current operations have been implemented since November 1996, but our
business plan has not yet been fully implemented. Accordingly, we have only a
limited operating history with respect to the distribution and marketing of
Soltron(R) in the United States and elsewhere throughout the world.

     History of Losses

 We have consistently had negative cash flow, operating losses and insufficient
liquidity with respect to current operations, all of which we expect to continue
until our sales revenues increase substantially. There can be no assurance that
we will be able to achieve, or maintain, profitable operations or positive cash
flow at any time in the future.

     Additional Capital Requirements

 We will require significant additional capital to meet our growth objectives
and to fully implement our business plan and expand our operations. While we
have received capital infusions from Dominion Capital and other investors in the
past, there can be no assurance that these investments will continue. We may
also seek additional debt or equity financing through banks, other financial
institutions, companies or individuals, but no assurance can be given that we
will be able to obtain any such additional equity or debt financing on
satisfactory terms or at all. Further, even if financing is obtained, no
assurance can be given that such financing would be adequate to meet our needs
for the foreseeable future. If we are unsuccessful in obtaining sufficient
additional capital, our ability to continue as a viable business enterprise will
be substantially impaired.

     Need to Develop Sales and Product Awareness

Establishment of a distribution network sufficient to create and supply
customer demand for Soltron(R) will be critical to our future success. We
anticipate developing this network primarily through distributors with
established distribution channels in the fuel, oil chemical and automotive
aftermarket industries. Numerous factors, including lack of sufficient inventory
or capital, or failure of our product to generate sufficient demand and lack of
sufficient qualified, experienced personnel may contribute to the difficulties
we will face in establishing an efficient distribution network for our product.
While we intend to engage qualified personnel to assist in establishing our
distribution network, no assurance can be given that our product will be
accepted by industrial or retail consumers, that a satisfactory distribution
network can be established or that our operations will ever be profitable.

     Uncertainty of Market Acceptance of Our Product, Limited Marketing
     Experience

We are still in the early stages of marketing Soltron(R). As is typical with new
products, demand and market acceptance for our product is subject to a high
degree of uncertainty. Achieving widespread market acceptance for our product
will require substantial marketing efforts and the expenditure of sufficient
funds to create brand recognition and customer demand and to cause potential
customers to consider the potential benefits of our product. The prospects for
our product line will be largely dependent upon our ability to achieve market
penetration, which will require significant efforts on our part to create
awareness of and demand for our product. Our ability to build our customer base
will depend in large part on our ability to locate, hire and retain sufficient
qualified marketing personnel and to fund marketing efforts, including
advertising. There can be no assurance that our product will achieve widespread
market acceptance or that our marketing efforts will result in future profitable
operations.

     Variability of Operating Results and Volatility of Common Stock Prices

Our quarterly operating results have in the past been, and are anticipated in
the future to be, highly volatile. While we anticipate that increased sales of
our product will continue to generate revenue, the operating results of any
quarterly period as compared to the previous quarter or the same quarter for the
prior period will, in all likelihood, vary significantly. Significant variances
in operating results from period to period could result in high volatility of
the market price for our common stock.


                                       5
<PAGE>
     Limited Product Line

We currently hold the marketing and distribution rights to Soltron(R). Our
future success and profitability will, to a very high degree, depend upon the
market acceptance of this product and our ability to improve this product.

     Supply, Capacity and Distribution Constraints

To successfully market our product, we must be able to fill orders promptly for
our shipment. Our ability to meet our supply requirements promptly will depend
on numerous factors including our ability to establish successfully an effective
distribution network and to maintain adequate inventories. The ability of our
sole supplier of the Soltron(R) enzyme to adequately produce the enzymes needed
to produce Soltron(R) in volumes sufficient to meet demand will also affect our
ability to produce this product. Failure to adequately supply product to
distributors and retailers or of any of our suppliers to produce sufficient
materials to meet our demand would materially adversely impact our operations.

     Dependence Upon Raw Materials and Suppliers

We are dependent on a single supplier of the enzyme concentrate needed to make
Soltron(R) and on other suppliers of chemicals. Chemicals are subject to price
fluctuations based upon supply and demand. In addition, because the Soltron(R)
enzyme is produced in Japan, fluctuations in currency values could adversely
affect our cost of this product. Interruption of our product supply could result
from several factors, such as disruption of supply of raw product, work
stoppages, strikes or other labor difficulties, changes in governmental or
international regulations or natural or man caused disasters occurring with
respect to our suppliers. Any increase in the costs of our raw materials or
disruption of our suppliers could severely and adversely affect our business
operations.

     Reliance on Management; Limited Personnel

Attracting and retaining qualified personnel is critical to our business plan.
In particular, our success is highly dependent on the services of our current
Chief Executive Officer, James H. Hirst, who took office on May 1, 2006. Mr.
Hirst is an at-will employee and we do not maintain key man life insurance.
There can be no assurance that we will not lose the benefit of his services. The
loss of Mr. Hirst's services or our inability to attract or retain alternative
or additional qualified personnel would have a materially adverse affect on our
business. No assurances can be given that we would be able to retain or attract
such qualified personnel or agents, or to successfully implement our business
plan.

     Management of Growth

We anticipate growth in the future, which will require effective management of
all aspects of our business. If achieved, this growth may place significant
strains on our financial, managerial, personnel and other resources. Failure to
effectively manage our anticipated growth could have a materially adverse effect
on our business and profitability.

     Seasonal Fluctuations

Fluctuations in our quarterly operating results may impact the market for our
common stock and could cause high volatility in its trading price.

     Competition

The markets for fuel additives are highly competitive. We believe that our
product and our management's qualifications will enable us to compete
effectively in these markets, but we cannot give any assurance that we will be
successful. We will be competing with established manufacturers and distributors
that have already developed brand recognition and gained consumer acceptance.
Many of these competitors have significantly greater financial, marketing,
personnel, managerial and other resources than we do. New competitors may also
enter these markets. Even though we believe our product is superior to those of
our competitors, our lack of financial strength and brand recognition will be
significant disadvantages to our ability to penetrate and compete in our target
markets.

                                       6
<PAGE>
     Lmited Patent and Proprietary Information Protection

We do not believe that our product or our proprietary production processes
infringe on proprietary rights of others, but we cannot give any assurance that
infringement claims will not be made against us. If it is determined that our
product or processes do infringe someone else's proprietary rights, we could be
required to modify our product or processes or obtain a license to continue our
use of them. There can be no assurance that we would be able to do this in a
timely manner, upon acceptable terms and conditions or at all. Our failure to do
so would have a material adverse effect on our business. In addition, there can
be no assurance that we would have the financial or other resources necessary to
prosecute or defend a patent infringement or other proprietary rights action.
Moreover, if our product or processes were held to infringe patents or
proprietary rights of others, we could, under certain circumstances, be held
liable for damages, which could be significant in amount and which could
materially and adversely effect our operations. We rely on confidentiality
agreements, trade secret protection and other methods to protect our processes,
concepts, ideas, documentation and other information related to our product and
proprietary processes. However, these methods may not afford complete protection
and there can be no assurance that others will not independently develop similar
products and processes. All of our employees are required to sign
non-disclosure, non-competition and inventions agreements, but there can be no
assurance that a court would enforce such agreements or that they would provide
us with any meaningful protection. There can be no assurance that we will be
able to adequately protect our trade secrets or that other companies will not
acquire information that we consider proprietary.

     Product Acquisition Agreement

We own the worldwide rights to manufacture and distribute Soltron(R), as well as
the process, formulae and other proprietary rights related to this product,
pursuant to product acquisition agreements with Dominion Capital. Any
termination or impairment of the rights of Dominion Capital to such proprietary
rights or to our rights under these agreements would materially adversely affect
our operations.

     Need for Additional Product Development

We believe that our development work on Soltron(R) is substantially complete,
but testing of this product in the United States has been limited. We anticipate
that our future research and development activities, combined with experience we
hope to gain from commercial production and use of our product will result in
the need for further refinement of our product and development of new products.
Such refinements and development may be required for our product to remain
competitive. There can be no assurance that we will have the experience or the
financial resources necessary to make such improvements to our product line,
which could have a significant negative impact on our business.

     Adequacy of Product Liability Insurance

The use of our product entails inherent risks that could expose us to product
liability claims, which could have a material adverse effect on our business and
financial condition. While we do maintain product liability insurance to cover
these types of claims, there can be no assurance that we will be able to
maintain such insurance on acceptable terms or, even if maintained, that such
insurance would be sufficient to cover all potential claims.

     Control by Existing Stockholders/Foreign Stockholders

Our principal stockholders, Australian Native Estates Pty Ltd., Marino
Investment Services Ltd., Pastoral Heights Pty Ltd.,and their affiliates own or
control a substantial block of our outstanding common stock. Accordingly, these
stockholders, acting together, would be able to effectively control matters
requiring approval by our stockholders, including the election of our board of
directors and approval of certain significant transactions. Australian Native
Estates Pty Ltd., Marino Investment Services Ltd., and Pastoral Heights Pty
Ltd., are domiciled in Australia and if we, or our stockholders, were to bring
legal action against them, their domicile in a foreign country may prevent them
from being subject to jurisdiction of a United States court. While we or our
shareholders may be able to proceed against these entities in an Australian
court, such actions may be prohibitively expensive and an Australian court may
not recognize claims or provide remedies similar to those available in United
States courts.


                                       7
<PAGE>

     International Trade

We currently anticipate selling Soltron(R) worldwide, as well as importing
Soltron(R) concentrate from Japan. This will expose our business to certain
additional risks related to doing business internationally, which could include,
among others, fluctuations in currency exchange rates, changes in both United
States and foreign import and export laws and regulations, increases in tariffs,
customs, foreign tax liabilities and other adverse United States and foreign tax
consequences and potential difficulty in contract enforcement. Risks of
conducting international business operations could have a negative impact on our
overall business.

Risks Relating to Our Common Stock

         The limited trading of our Common Stock may make it difficult to sell
shares of our Common Stock Trading of our common stock is conducted on the
Bulletin Board Pink Sheets. This has an adverse effect on the liquidity of our
common stock, not only in terms of the number of shares that can be bought and
sold at a given price, but also through delays in the timing of transactions and
reduction in security analysts' and the media's coverage of us. This may result
in lower prices for our common stock than might otherwise be obtained and could
also result in a larger spread between the bid and asked prices for our common
stock.

     Because our Common Stock is a "penny stock," it may be difficult to
     sell shares of our Common Stock at times and prices that are acceptable

Our common stock is a "penny stock." Broker-dealers who sell penny stocks must
provide purchasers of these stocks with a standardized risk disclosure document
prepared by the SEC. This document provides information about penny stocks and
the nature and level of risks involved in investing in the penny stock market. A
broker must also give a purchaser, orally or in writing, bid and offer
quotations and information regarding broker and salesperson compensation, make a
written determination that the penny stock is a suitable investment for the
purchaser, and obtain the purchaser's written agreement to the purchase. The
penny stock rules may make it difficult for you to sell your shares of our
stock. Because of the rules, there is less trading in penny stocks. Also, many
brokers choose not to participate in penny stock transactions. Accordingly, you
may not always be able to resell our shares of common stock publicly at times
and prices that you feel are appropriate.
Risks Relating to Our Financial Condition

     Our independent auditors have reported that conditions exists that raise
     substantial doubt about our ability to continue as a going concern

We have had net losses for each of the years ended March 31, 2006, and March 31,
2005, and we have an accumulated (deficit) as of March 31, 2006, of
$(13,771,941). Since the financial statements for each of these periods were
prepared assuming that we would continue as a going concern, in the view of our
independent auditors, these conditions raise substantial doubt about our ability
to continue as a going concern. Furthermore, since we may not generate
significant revenues in the foreseeable future, our ability to continue as a
going concern may depend, in large part, on our ability to raise additional
capital through equity or debt financing transactions. If we are unable to raise
additional capital, we may be forced to discontinue our business.

ITEM 2. DESCRIPTION OF PROPERTY

Until May 31, 2006, we leased our corporate offices in Coral Springs, Florida
and warehouse space in San Pedro, California pursuant to a month-to-month lease,
for which we paid rent of $1,145 per month. Beginning in June 2006 we moved the
corporate offices back to San Pedro, California, for which we will pay rent of
$1,000 per month.

ITEM 3. LEGAL PROCEEDINGS

We have in the past been involved in various legal proceedings arising in the
normal course of business. The ultimate outcome of these various legal
proceedings had no material effect on our financial position, results of
operation or liquidity. There are no legal proceedings pending, or to our
knowledge, threatened, that we expect to have any material impact on our
business.

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

None.

                                       8
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is traded on the Bulletin Board Pink Sheets under the symbol
"SLPW.PK." The following table sets forth the quarterly high and low bid prices
per share for the common stock, as reported by the Bulletin Board Pink Sheets
for the fiscal years indicated. On March 31, 2006, there were approximately 400
beneficial holders of our common stock.

    Fiscal Year       Quarter Ended                         High     Low
    -----------       -------------                         ----     ---
        2005.         June 30, 2004                         $0.25    $0.03
                      September 30, 2004                    $0.175   $0.05
                      December 31, 2004                     $0.12    $0.02
                      March 31, 2005                        $0.40    $0.05
        2006.         June 30, 2005                         $0.15    $0.10
                      September 30, 2005                    $0.12    $0.10
                      December 31, 2005                     $0.10    $0.06
                      March 31, 2006                        $0.12    $0.05

The prices set forth in this table represent quotes between dealers and do not
include commissions, markups or markdowns, and may not represent actual
transactions.

Dividend Policy

We have not paid, and do not currently intend to pay, cash dividends on our
common stock in the foreseeable future. The current policy of the board of
directors is to retain all earnings, if any, to provide funds for operation and
expansion of our business. In addition to statutory requirements, the
declaration of dividends, if any, will be subject to the discretion of the board
of directors, which may consider such factors as our results of operations,
financial condition, capital needs and acquisition strategies, among others.

Recent Unregistered Stock Issuances

On July 29, 2005, we issued 750,000 of restricted common shares for the exercise
of stock options with an exercise price of $0.20 per share, for total cash
proceeds aggregating $150,000.

On October 2, 2005, we issued 500,000 shares of restricted common stock at $0.05
per share for cash proceeds of $25,000, pursuant to the sale of common stock in
a private placement.

ITEM 6.  MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with our financial
statements and related notes included herein. Certain statements are not based
on historical facts, but are forward-looking statements that are based upon
assumptions about our future conditions that could prove to be inaccurate.
Actual events, transactions and results may materially differ from the
anticipated events, transactions or results described. Our ability to consummate
transactions and achieve events or results is subject to certain risks and
uncertainties, which include, but are not limited to, the existence of demand
for and acceptance of our products, regulatory approvals and economic
conditions, the impact of competition and pricing, and other factors affecting
our business that are beyond our control. See "DESCRIPTION OF BUSINESS - Factors
Affecting Future Performance" above.

We undertake no obligation and do not intend to update, revise or otherwise
publicly release the result of any revisions to forward-looking statements that
may be made to reflect future events or circumstances.

INTRODUCTION

Although we continue to report significant losses, the current trend of
increasing Soltron(R) product sales, together with the elimination of the costs
and consolidation of income (losses) from our formerly wholly-owned subsidiary,
Virtual Technologies Pty Ltd., gives us an expectation that we will continue to
reduce our operating losses.. Because of limited operating capital, we were not
able to finalize the deployment strategy during the fiscal year ended March 31,
2006. Based upon an annual net revenue of $569,008 for the current fiscal year
as compared to the prior fiscal year of $734,738, we are optimistic with
concentrated efforts on distributor suppliers, that we can change the trend to
increase in sales as we implement new marketing strategies for our product lines
in fiscal year 2007. During the year ended March 31, 2006, management continued
to maintain operational efficiency with a minimum of administrative overhead. We
currently are concentrating our focus on the Soltron(R) product line by
identifying additional distributors and developing direct sales activities in
new markets such as international sales, bulk users, small generation power
plants and commercial uses in metropolitan city fleets.

                                       9
<PAGE>
During our fiscal years ended March 31, 2006 and 2005, we have continued to be
in the middle stages of being a development company, seeking to ascertain the
appropriate mix of products for future marketing and distribution. We continue
to explore distribution and marketing of our products through established
distributors, both wholesale and retail. Through this methodology we attempt to
cut costs, increase revenue and increase profits. As a result of utilizing
established distributors, we believe we may penetrate our product channels in a
more effective manner and at a lower cost that will result in increased
revenues, profits and cash flow as this methodology of distributors penetrate
the markets and sell to end users of our products.

We intend to seek listing on the OTC Bulletin Board, which may provide a better
ability to attract investors. We are in process of completing our Securities Act
filings to enable our listing for trading on the OTC Bulletin Board. We intend
to raise capital to provide working capital and to expand our present business
segments. We also have outstanding warrants and stock options that, if
converted, will provide cash flow for working capital.

RESULTS OF OPERATIONS

Year Ended March 31, 2006 Compared to Year Ended March 31, 2005

Revenues for the year ended March 31, 2006, were $569,008 as compared to
$734,738 for the year ended March 31, 2005. The decrease in revenues of $165,730
was mainly attributable to decreased barrels Soltron(R) concentrate sold to a
major distributor in the United States, aggregating $150,000 .

Gross profit decreased from 56.6% for the year ended March 31, 2005, to 51.5%
for the year ended March 31, 2006. This decrease in gross profit percentage of
5.1% is mainly due to a lower gross profit margin attained on the Soltron(R)
Product line as compared to the gross profit attained on Soltron(R) concentrate
sales and the concentrate sales for the current fiscal year decreased
approximately 57% from the prior fiscal year.

General and administrative costs for the year ended March 31, 2006 were $630,145
as compared to $750,641 for the year ended March 31, 2005, or a decrease of
$120,496. This decrease is mainly attributable to decreased costs incurred in
investor relations of $108,097, private placement fees of $14,141, legal fees of
$59,471, marketing costs of $48,641 and sales commissions of $50,974. These
decreases were offset by increases in consulting fees of $75,338, increased
executive expenses of $20,514, and increased auditing and accounting fees
aggregating $39,919.

Other income (expense) increased to $11,103 during the current year ended March
31, 2006, as compared to the year ended March 31, 2005 of $(690,076), an
increase of $701,179. This increase is mainly comprised of royalty income
recognized in the current year ended of $11,557 and a reduction in other expense
attributable to the beneficial conversion of debt of $607,930, a reduction in
interest expense of $17,860 and the costs associated with the issuance of call
options of $63,000.

For the year ended March 31, 2006, we incurred a net (loss) of $(285,174) or
$0.00 per share, as compared to a net (loss) of $(1,036,355) or $(0.02) per
share for the year ended March 31, 2005. The decreased (loss) of $(751,181) for
the current year ended is mainly attributable to the decrease costs incurred in
other expenses aggregating $701,179.

Impact of Inflation

We do not believe that inflation will have any material impact on Soltron(R)'s
commercial activities for the ensuing year as our products do not fall under
categories that are traditionally affected.

Plan of Operation

We continue to historically report significant losses. Nevertheless, we believe
that we may be able to continue to reduce our operating losses based on the
current trend of increasing Soltron(R) product sales, together with licensing
fees from Virtual Technologies Pty Ltd. Because of discussions with new
distributors we anticipate increased sales of the Soltron(R) during our fiscal
year 2007.

During our fiscal years ended March 31, 2006 and 2005, and continuing during the
current fiscal year, the Company has been in the middle stages as a development
company seeking to find the complementary mix of products for future marketing
and distribution. The Company continues to explore the total distribution and
marketing for its products through established distributors, both wholesale and
retail. The Company anticipates that this methodology will enable it to cut
costs, increase the revenue stream and increase profits over the long range.
Although gross profits may decrease initially with certain revenues going to the
benefit of the distributors, we believe that the Company's revenues, profits and
cash flow will increase in the long term as a result of this methodology as more
distributors penetrate and sell through to the end users of these products.

                                       10
<PAGE>
Part of the business plan is to arrange adequate financing to assist the Company
to implement these business strategies. The Company anticipates exploring
expansion of additional product lines with environmentally friendly products
with established marketplaces and to accomplish these through acquisitions and
exclusive licenses.

We intend to seek to have our securities quoted on the OTC Bulletin Board, which
may provide a better ability to attract investors. We are in process of
completing our Securities Act filings to facilitate this process. We intend to
raise capital to provide working capital and to expand our present operations.
We also have outstanding stock options that, if converted, will provide
additional cash flow for working capital.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company historically has experienced significant losses and negative cash flows
from operations. As of March 31, 2006, the Company has a deficiency in working
capital of $728,069, accumulated (deficit) of $(13,771,941) and a net (loss) for
the year ended March 31, 2006, of $(285,174).

There can be no assurance that the Company will be able to continue as a going
concern in view of its financial condition. The Company's continued existence
will depend upon its ability to obtain sufficient additional capital in a timely
manner to fund its operations and to further develop its long-term business
plan. Any inability to obtain additional financing will have a material adverse
effect on the Company, including possibly requiring the Company to significantly
reduce or cease its operations.

Liquidity and Capital Reserves

Product sales did not provide sufficient working capital to fund our operations
during the year ended March 31, 2006. Operations utilized $390,968 of cash
during the year. Liquidity was provided by the exercise of warrants and a
private placement aggregating $175,000 and net customer advances of $60,710.
During this same period for the previous fiscal year, $121,251 was utilized by
operations and was offset by proceeds from sales of common stock and from
granted call options aggregating $240,760, and net payments to a major customer
for advances of $(63,777).

The sale of our subsidiary, Virtual Technologies Pty. Ltd., will have no
material effect on our future liquidity. Currently we project that the we may
recognize approximately $6,000 a quarter in royalties under the sales agreement.
As of March 31, 2006, we had no commitments for capital expenditures.

Off-Balance Sheet Arrangements

During the quarter ended March 31, 2006, we did not engage in any off balance
sheet arrangements as defined in item 303(c) of the SEC's Regulation S-B.

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America, which require us
to make estimates and judgments that significantly affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements. Note 2, "Significant Accounting Policies" in the Notes to the
Financial Statements in our Form 10-KSB describes our significant accounting
policies which are reviewed by management on a regular basis.

An accounting policy is deemed by us as critical if it requires an accounting
estimate to be made based on assumptions about matters that are uncertain at the
time the estimate is made, and if different estimates that reasonably could have
been used, or changes in the accounting estimates that are reasonable likely to
occur periodically, could materially impact the financial statements. The
policies and estimates that we believe are most critical to the preparation of
our consolidated financial statements and that require a higher degree of
judgment are:

Stock-based compensation; and Valuation of warrants and options under the
Black-Scholes option pricing model.

Warrants and options are accounted for fair value using the Black-Scholes option
pricing model. That model requires assumptions related to the remaining term of
the instruments and risk-free rates of return, the Company's current common
stock price and expected dividend yield, and the expected volatility of the
common stock price over the life of the warrants or options. The identification
of, and accounting for the assumptions used to value them can significantly
affect the financial statements.

New Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123 (Revised 2004) "Share Based
Payment" ("SFAS No. 123R"), which is a revision to SFAS No. 123 and supersedes
APB No. 25 and SFAS No.148. This statement requires that the cost resulting from
all share-based payment transactions be recognized in the financial statements.
This statement establishes fair value as the measurement objective in accounting
for share-based payment arrangements and requires all entities to apply a
fair-value based measurement method in accounting for share-based payment
transactions with employees except for equity instruments held by employee share
ownership plans.

                                       11
<PAGE>
SFAS No. 123R applies to all awards granted after the required amended effective
date and to awards modified, repurchased, or cancelled after that date. As of
the required effective date, all public entities that used the fair-value-based
method for either recognition or disclosure under SFAS No. 123 will apply to
SFAS No. 123R using a modified version of prospective application. Under that
transition method, compensation cost is recognized on or after the required
effective date for the portion of outstanding awards, for which the requisite
service has not yet been rendered, based on the grant-date fair value of those
awards calculated under SFAS No. 123 for either recognition or pro forma
disclosures. For periods before the required effective date, those entities may
elect to apply a modified version of the retrospective application under which
financial statements for prior periods adjusted on a basis consistent with the
pro forma disclosures required for those periods by SFAS No. 123. As a result,
beginning in our fiscal quarter starting October 2006, we will adopt SFAS No.
123R and begin reflecting the stock option expense determined under fair value
based methods in our income statement rather than a pro forma disclosure in the
notes to the financial statements. We expect the effect of adopting SFAS No.
123R to be similar to the effect presented in our pro forma disclosure related
to SFAS No. 123.

In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes - an interpretation of FASB No. 109" ("FIN 48"). FIN
48 clarifies the accounting for uncertainty in income taxes recognized in a
company's financial statements in accordance with SFAS No. 109 and provides
guidance on recognizing, measuring, presenting and disclosing in the financial
statements tax positions that a company has taken or expected to take on a tax
return. FIN 48 is effective for the Company as of July 1, 2007. The Company at
this time has not evaluated the impact, if any, of adopting FIN 48 on its
financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. This statement
addresses how to calculate fair value measurements required or permitted under
other accounting pronouncements. SFAS 157 is effective for the Company beginning
July 1, 2008. The Company at this time has not evaluated the impact, if any, of
SFAS 157 on its financial statements.

The FASB has also issued SFAS No. 155, "Accounting for Certain Hybrid Financial
Instruments", SFAS No. 156, "Accounting for Servicing of Financial Assets" and
SFAS No. 158, "Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and
132(R)", but they will not have any relationship to the operations of the
Company at this time.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ("SAB No.
108"), which addresses the process and diversity in practice of quantifying
financial statement misstatements resulting in the potential build up of
improper amounts on the balance sheet. The Company will be required to adopt the
provision of SAB No. 108 in fiscal year 2007. The Company currently does not
believe that the adoption of SAB No. 108 will have a material impact on our
financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 allows
entities to measure at fair value many financial instruments and certain other
assets and liabilities that are not otherwise required to be measured at fair
value. SFAS 159 is effective for fiscal years beginning after November 15, 2007.
We have not determined what impact, if any, that adoption will have on our
results of operations, cash flows or financial position.

                                       12
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS

                                      INDEX

   Report of Independent Registered Public Accounting Firm..................F-1

   Report of Independent Registered Public Accounting Firm..................F-2

   Balance Sheet at March 31, 2006..........................................F-3

   Statements of Operations for the Years Ended
   March 31, 2006 and 2005..................................................F-4

   Statements of Stockholders' Deficit for the Years Ended
   March 31, 2006 and 2005..................................................F-5

   Statements of Cash Flows for the Years Ended
   March 31, 2006 and 2005..................................................F-6

   Notes to the March 31, 2006 and 2005 Financial Statements................F-8


                                       13
<PAGE>


                              MEYLER & COMPANY, LLC
                          CERTIFIED PUBLIC ACCOUNTANTS
                                  ONE ARIN PARK
                                 1715 HIGHWAY 35
                              MIDDLETOWN, NJ 07748


             Report of Independent Registered Public Accounting Firm


To the Board of Directors and
Stockholders of Solpower Corporation


We have audited the accompanying balance sheet of Solpower Corporation as of
March 31, 2006 and the related statement of operations and comprehensive loss,
stockholders' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The Company's financial statements for the year ended March 31, 2005
were audited by other auditors whose report, dated September 6, 2005, expressed
an unqualified opinion on those financial statements and included an explanatory
paragraph that referred to substantial doubt about the Company's ability to
continue as a going concern.


We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Solpower Corporation as of
March 31, 2006 and the results of its operations and its cash flows for the year
then ended in conformity with accounting principles generally accepted in the
United States of America.


The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's significant operating losses and negative
working capital raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Meyler & Company, LLC
------------------------
Meyler & Company, LLC

Middletown, NJ
March 19, 2007 (except for Note 11 as to which the date is May 23, 2007)


                                       F-1
<PAGE>
                          Semple, Marchal & Cooper, LLP
                  Certified Public Accountants and Consultants
                     2700 North Central Avenue, Ninth Floor
                             Phoenix, Arizona 85004

             Report of Independent Registered Public Accounting Firm



Board of Directors and Stockholders
Solpower Corporation

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Solpower
Corporation  as of March 31, 2005 and the  related  consolidated  statements  of
operations,  comprehensive loss,  stockholders'  deficit, and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audits included consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Solpower Corporation
at March 31, 2005,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements,  the Company's significant operating losses
and  negative  working  capital  raise  substantial  doubt  about its ability to
continue  as a going  concern.  The  consolidated  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ Semple, Marchal & Cooper, LLP
Phoenix, Arizona
September 6, 2005



                 INDEPENDENT MEMBER OF THE BDO SEIDMAN ALLIANCE



                                       F-2
<PAGE>
                              SOLPOWER CORPORATION
                                  BALANCE SHEET
                                 March 31, 2006


<TABLE>
<CAPTION>
                                       ASSETS

CURRENT ASSETS:
<S>                                                                                   <C>
      Accounts receivable, net of allowance for uncollectible accounts of $5,819   $     32,994
      Royalties receivable .....................................................         11,397
      Prepaid expenses .........................................................         12,060
      Inventory ................................................................        178,144
                                                                                   ------------
           Total Current Assets ................................................        234,595
                                                                                   ------------

PROPERTY AND PLANT AND EQUIPMENT, net ..........................................             --
                                                                                   ------------

OTHER ASSETS:
      Intangible royalty agreement, net of amortization of $3,000 ..............        117,000
      Deposits .................................................................            350
                                                                                   ------------
                                                                                        117,350
                                                                                   ------------
      Total Assets                                                                 $    351,945
                                                                                   ============
                       LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
      Bank overdraft ...........................................................   $        587
      Customer advances ........................................................        347,963
      Accounts payable - trade .................................................        247,875
                       - related parties .......................................        257,610
      Accrued expenses .........................................................        108,629
                                                                                   ------------
           Total Current Liabilities ...........................................        962,664
                                                                                   ------------

      Commitments and Contingencies

STOCKHOLDERS' (DEFICIT):
      Preferred stock, $0.001 par value - 5,000,000 shares
          authorized; issued and outstanding, none .............................             --
      Common stock, $.001 par value - 100,000,000 shares
          authorized; 70,559,727  shares issued and outstanding ................        705,597
      Additional paid in capital ...............................................     12,455,625
      Accumulated (deficit) ....................................................    (13,771,941)
                                                                                   ------------
           Total Stockholder's (Deficit) .......................................       (610,719)
                                                                                   ------------
           Total Liabilities and Stockholders' Deficit..........................   $    351,945
                                                                                   ============
</TABLE>
   The accompanying notes are an integral part of these financial statements.


                                       F-3
<PAGE>
<TABLE>
<CAPTION>

                              SOLPOWER CORPORATION
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                   For the Years Ended March 31, 2006 and 2005


                                                            2006           2005
                                                       ------------    ------------

<S>                                                         <C>             <C>
NET REVENUES .......................................   $    569,008    $    734,738

COST OF REVENUES ...................................        275,868         319,178
                                                       ------------    ------------

GROSS PROFIT .......................................        293,140         415,560
                                                       ------------    ------------

OPERATING COSTS AND EXPENSES:
     Selling, general and administrative expenses ..        630,145         750,641
     Depreciation and amortization .................          4,230             798
                                                       ------------    ------------
                                                            634,375         751,439
                                                       ------------    ------------

(LOSS) FROM OPERATIONS .............................       (341,235)       (335,879)
                                                       ------------    ------------

OTHER INCOME (EXPENSE):
     Cost associated with induced conversion of debt             --        (607,930)
     Cost associated with call options .............             --         (63,000)
     Exchange rate differential ....................           (160)             --
     Interest income ...............................            992              --
     Royalty income ................................         11,557              --
     Interest expense ..............................         (1,286)        (19,146)
                                                       ------------    ------------
                                                             11,103        (690,076)
                                                       ------------    ------------

(LOSS) BEFORE PROVISION FOR INCOME TAXES
     AND DISCONTINUED OPERATIONS ...................       (330,132)     (1,025,955)

PROVISION FOR INCOME TAXES .........................             --              --
                                                       ------------    ------------

(LOSS) FROM CONTINUING OPERATIONS ..................       (330,132)     (1,025,955)
                                                       ------------    ------------

DISCONTINUED OPERATIONS:
     (Loss) from discontinued operations ...........        (48,282)        (10,400)
     Gain on disposition of discontinued operations          93,240            --
                                                       ------------    ------------
                                                             44,958         (10,400)
                                                       ------------    ------------

NET (LOSS) .........................................   $   (285,174)   $ (1,036,355)
                                                       ============    ============

Basic and Diluted (Loss) Per Common Share
     Continuing Operations .........................   $      (0.00)   $      (0.02)
     Discontinued Operations .......................           0.00           (0.00)
                                                       ------------    ------------
     Total .........................................   $      (0.00)   $      (0.02)
                                                       ============    ============

Basic and Diluted - Weighted Average Number of
     Common Shares Outstanding .....................     70,061,097      58,632,252

A summary of comprehensive (loss) for the fiscal years ended March 31, 2006 and
2005:

                                                                   March 31,
                                                            2006           2005
                                                       ------------    ------------
Net (loss):                                            $   (285,174)   $ (1,036,355)
Other comprehensive (loss)
  Foreign currency translation (loss)                        (2,423)           (285)
                                                       ------------    ------------
Comprehensive (loss)                                   $   (287,597)   $ (1,036,640)
                                                       ============    ============


   The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       F-4
<PAGE>
<TABLE>
<CAPTION>


                              SOLPOWER CORPORATION
                       STATEMENT OF STOCKHOLDER'S DEFICIT
                   For the Years Ended March 31, 2006 AND 2005

                                                                                                             Other
                                                                                 Common                  Comprehensive
                                               Common Stock          Paid-in      Stock      Accumulated     Income
                                             Shares      Amount      Capital   Subscription  (Deficit)       (Loss)        Total
                                            ---------- ----------  -----------  ----------- ------------   ----------   -----------

<S>                                             <C>        <C>         <C>          <C>          <C>           <C>          <C>
Balance, March 31, 2004                     50,912,127 $  509,122  $10,764,858  $     5,000  $(12,450,412) $    2,708   $(1,168,724)
Issuance of restricted stock at $0.50 per
     share for consulting services           2,042,166     20,422       81,686            -             -           -       102,108
Issuance of restricted stock at $0.50 per
     share pursuant to a private placement
     of securities                           1,500,000     15,000       60,000       (5,000)            -           -        70,000
Issuance of restricted stock at $0.03 per
     share in settlement of an accounts
     payable                                   800,000      8,000       16,000            -             -           -        24,000
Issuance of restricted stock at $0.066 per
     share pursuant to a private placement
     of securities                           1,500,000     15,000       84,000            -             -           -        99,000
Proceeds from the issuance of call options           -          -       15,000            -             -           -        15,000
Costs associated with the issuance of call
     options to non- employees                       -          -       63,000            -             -           -        63,000
Employee stock based compensation on call
     options granted to employees                    -          -        4,000            -             -           -         4,000
Issuance of restricted stock at $0.10 per
     share in settlement of an accounts
     payable                                   260,000      2,600       23,400            -             -           -        26,000
Issuance of restricted stock at $0.15 per
     share for services pursuant to
     agreement                                 650,000      6,500       91,000            -             -           -        97,500
Issuance of restricted stock at $0.15 per
     share in settlement of an accounts
     payable                                   120,000      1,200       16,800            -             -           -        18,000
Issuance of restricted stock at $0.11 per
     share pursuant to a private placement
     of securities                             516,000      5,159       51,601            -             -           -        56,760
Issuance of restricted stock at $0.50 per
     share for consulting services               9,434         94        2,831            -             -           -         2,925
Induced conversion of note payable and
     accrued interest to a related party
     at $0.0474 per share including
     expense of $607,930                    11,000,000    110,000    1,018,949            -             -           -     1,128,949
Foreign Currency Translation Adjustment              -          -            -            -             -        (285)         (285)
Net (loss) for the year ended March 31,
     2005                                            -          -            -            -    (1,036,355)          -    (1,036,355)
                                            ---------- ----------  -----------  ----------- -------------  ----------   -----------
Balance, March 31, 2005                     69,309,727    693,097   12,293,125            -   (13,486,767)      2,423      (498,122)

Exercise of warrants at $0.20 per share
     for common stock                          750,000      7,500      142,500            -             -           -       150,000
Issuance of common stock at $0.05 per
     share                                     500,000      5,000       20,000            -             -           -        25,000
Foreign Currency Translation Adjustment              -          -            -            -             -      (2,423)       (2,423)
Net (loss) for the year ended March 31,
     2006                                            -          -            -            -      (285,174)          -      (285,174)
                                            ---------- ----------  -----------  ----------- ------------   ----------   -----------
Balance, March 31, 2006                     70,559,727 $  705,597  $12,455,625  $         -  $(13,771,941) $        -   $  (610,719)
                                            ========== ==========  ===========  =========== =============  ==========   ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                              SOLPOWER CORPORATION
                            STATEMENTS OF CASH FLOWS
                   For the Years Ended March 31, 2006 and 2005

                                                                            2006              2005
                                                                          -----------    -----------
 CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>            <C>
      Net (loss) ......................................................   $  (285,174)   $(1,036,355)
      Gain (loss) from discontinued operations ........................        44,958        (10,400)
                                                                          -----------    -----------
      Net (loss) attributable to continuing operations ................      (330,132)    (1,025,955)

      Adjustments to reconcile net loss to net cash (used) in operating
      activities:
          Depreciation and amortization ...............................         4,230            798
          Non-cash gain on sale of subsidiary .........................       (93,240)            --
          Stock compensation ..........................................            --        206,533
          Cost associated with induced conversion of debt .............            --        607,930
          Cost associated with call options ...........................            --         63,000
          Interest expense paid with stock ............................            --         18,854
      Net change in current assets and liabilities:
          Accounts receivable .........................................        58,854        (61,348)
          Royalties receivable ........................................       (11,397)            --
          Prepaid expense .............................................        51,626        (58,656)
          Inventory ...................................................       (80,884)        33,785
          Deposits ....................................................           400           (750)
          Accounts payable - trade ....................................       103,902         56,874
                                      - related parties ...............        30,054        (40,160)
          Accrued expenses ............................................      (124,381)        77,844
                                                                          -----------    -----------
              Net Cash (Used in) Continuing Operating Activities ......      (390,968)      (121,251)
              Gain (loss) from Discontinued Operations ................        44,958        (10,400)
                                                                          -----------    -----------
              Net Cash (Used in) Operating Activities .................      (346,010)      (131,651)
                                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Net change in investment of discontinued operations .............        48,282         10,400
      Purchase of  equipment ..........................................        (3,829)            --
      Disposition of equipment ........................................         2,864             --
                                                                          -----------    -----------
              Net Cash Provided by Investing Activities ...............        47,317         10,400
                                                                          -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Bank overdraft ..................................................           587             --
      Proceeds from the exercise of warrants ..........................       150,000             --
      Proceeds from the sale of common stock and call options .........        25,000        240,760
      Net customer advances ...........................................        60,710        (63,777)
                                                                          -----------    -----------
              Net cash Provided by Financing Activities ...............       236,297        176,983
                                                                          -----------    -----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ......................       (62,396)        55,732

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ..........................        62,396          6,664
                                                                          -----------    -----------

CASH AND CASH EQUIVALENTS, END OF YEAR ................................   $        --    $    62,396
                                                                          ===========    ===========

   The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       F-6
<PAGE>
<TABLE>
<CAPTION>
                              SOLPOWER CORPORATIONS
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   For the Years Ended March 31, 2006 and 2005


                                                                           2006        2005
                                                                          --------   --------
 SUPPLEMENTAL CASH FLOW INFORMATION:
<S>                                                                          <C>        <C>
      Cash paid for interest ..........................................   $     --   $     --
                                                                          ========   ========

      Cash paid for income taxes ......................................   $     --   $     --
                                                                          ========   ========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES:
      Stock issued for  conversion of accounts payable ................   $     --   $ 68,000
                                                                          ========   ========

      Stock issued for  conversion of note payable and accrued
      interest payable, related parties ...............................   $     --   $502,165
                                                                          ========   ========

      Intangible asset acquired as part of discontinued operations.....   $120,000   $     --
                                                                          ========   ========
</TABLE>


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

                                       F-7
<PAGE>
                              SOLPOWER CORPORATION
                        NOTES TO THE FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2006 AND 2005



1. NOTE 1 - BUSINESS, OPERATIONS, ORGANIZATION, LIQUIDITY AND BASIS OF
PRESENTATION

Business Organization

     Solpower Corporation (the "Company"), formerly known as Virtual
Technologies, Inc. and Dynafuel Corporation, was incorporated under the laws of
the State of Utah on June 7, 1982.

     The Company was originally incorporated with an authorized capital of
30,000,000 shares of common stock with a par value of one cent ($0.01) per
share. On December 12, 1995, the Company amended its articles of incorporation,
changing its name to Virtual Technologies, Inc. and authorizing preferred stock
of 5,000,000 shares at $.25 par value. On July 22, 1996, the Company changed its
legal domicile to the State of Nevada. On November 22, 1997, the Company
restated the articles of incorporation, changing its name to Solpower
Corporation and changing its preferred stock par value to one-tenth of one cent
($.001) per share. On December 11, 2000, at the Annual Shareholders' Meeting,
shareholders approved an amendment to the Company's articles of incorporation to
increase the authorized shares of common stock to 100,000,000.

Nature of Operations

     The principal business purpose of the Company is the sales and distribution
of Soltron(R), a fuel-enhancing product and until September 30, 2005, SP34ETM, a
replacement refrigerant, throughout the world.

     The Company has the exclusive worldwide sales, distribution, marketing and
manufacturing rights to the product, Soltron(R), a fuel-enhancing product and to
SP34ETM, SP22E-A, SP22E-B and SP22E-C, refrigerant gas products, which were sold
in September 2005.

Acquisitions

     During the year ended March 31, 2003, the Company acquired 100% of the
outstanding stock of Virtual Technologies (Australia) Pty Ltd. The subsidiary
was acquired by the issuance of 6,000,000 shares of restricted common stock by
the Company. This acquisition delivers the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the products, SP34ETM,
SP22E-A, SP22E-B and SP22E-C, refrigerant gas products.

     During the year ended March 31, 2003, the Company acquired the worldwide
rights to the product Soltron(R) by the issuance of 9,000,000 restricted shares
of its common stock. These rights include the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the product, Soltron(R), a
fuel-enhancing product. In the year ended March 31, 2004, the value of these
rights was deemed impaired and the costs associated with these rights were
written off.

Discontinued Operations - Sale of Virtual Technologies Pty. Ltd. (Australia)

     On September 30, 2005, the Company signed an agreement for the sale of 100%
of the outstanding common stock of Virtual Technologies Pty Ltd (VT) for
assumption of all the assets and liabilities of VT and a royalty payment. The
royalty payment is for a period of twenty (20) years and is equal to four
percent (4%) of gross sales excluding taxes and freight. The royalty is due and
payable within forty-five (45) days at the end of each calendar quarter,
beginning with the quarter ending December 31, 2005. As part of the sale, the
Company agreed that it would not enter into any sales, distribution, licensing,
manufacturing or any other commercial application of the products (SP34E,
SP22E-A, SP22E-B and SB22E-C) for a period of five (5) years and to maintain all
information concerning the products as confidential.

                                       F-8
<PAGE>
     This sale has been accounted for as a discontinued operation in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting
for the Impairment or Disposal of Long-lived Assets. The Company has determined
that the fair value of the royalty agreement is $120,000. A gain on the disposal
of $93,240 has been recognized on the sale and represents the excess of the fair
value of the royalty agreement less the book value of VT. The results of
operations of VT for the current and prior periods have therefore been reported
as discontinued operations. Operating results for VT are summarized as follows:


                                                         Year Ended March 31,
                                                         2006           2007
                                                      --------      ---------
Revenues                                                96,470      $ 393,373

Cost of Revenues                                        43,143        173,702
                                                      --------      ---------

Gross Profit                                            53,327        219,671

Expenses:
     Selling, general and administrative               100,908        229,114
                                                      --------      ---------

Operating Income (Loss) from Continuing Operations     (47,581)        (9,443)
                                                      --------      ---------
Other Income (Expense):
     Interest income                                       174            438
     Miscellaneous income                                   --          1,910
     Interest expense                                     (875)        (3,305)
                                                      --------      ---------
           Total Other Income (Expense)                   (701)          (957)
                                                      --------      ---------

Income (Loss) Before Provision for Income Taxes        (48,282)       (10,400)

Provision for Income Taxes                                  --             --
                                                      --------      ---------

Net Loss from Discontinued Operations                 $(48,282)     $ (10,400)
                                                      ========      =========

     Although the Company is receiving continuing cash flows from the royalty
agreement, the Company determined that the continuing cash flows do not result
from a migration or continuance of activities and the Company has no significant
continued involvement in the operations of VT. The royalty agreement represents
a passive royalty interest and the Company does not exert any control over the
operations of VT. In accordance with EITF 03-13, Applying the Conditions in
Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report
Discontinued Operations, the Company therefore concluded that the disposal of VT
is classified as discontinued operations.

Basis of Presentation, Going Concern,

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company historically has experienced significant losses and negative cash flows
from operations. As of March 31, 2006, the Company has a deficiency in working
capital of $728,069, accumulated deficit of $(13,771,941) and a net loss for the
year ended March 31, 2006, of $(285,174).

     There can be no assurance that the Company will be able to continue as a
going concern in view of its financial condition. The Company's continued
existence will depend upon its ability to obtain sufficient additional capital
in a timely manner to fund its operations and to further develop its long-term
business plan. Any inability to obtain additional financing will have a material
adverse effect on the Company, including possibly requiring the Company to
significantly reduce or cease its operations.

     These factors raise substantial doubt about the ability of the Company to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

                                       F-9
<PAGE>
Management Plans

     During our fiscal years ended March 31, 2006 and 2005, and continuing
during the current fiscal year, the Company continues to be in the middle stages
as a development company, seeking to find the complementary mix of products for
future marketing and distribution. The Company continues to explore the total
distribution and marketing for its products through established distributors,
both wholesale and retail. The Company anticipates that this methodology will
enable it to cut costs, increase the revenue stream and increase profits over
the long range. Although profits may decrease initially with certain revenues
going to the benefit of the distributors, we continue to believe that the
Company's revenues, profits and cash flow will increase in the long term as a
result of this methodology as more distributors penetrate and sell through the
end users of the products.

     In mid-January 2005, the Company contracted the services of Mr. Robert Kohn
to review and formalize the short-term and long-range plans of the Company.
Beginning in April 2005, Mr. Kohn became Interim CEO for the Company, and
continued to develop the Company's business environment and develop a business
plan to move the Company into potential other profitable business segments and
enhance the performance of the current product mix. In October 2005, Mr. Kohn
became the full time CEO for the Company. On May 1, 2006, the Board of Directors
of the Company accepted the resignation of Mr. Kohn and appointed Mr. James
Hirst as President, Chief Executive and Principal Accounting Officer.

     The Company anticipates continuing to explore the expansion of additional
product lines with environmentally friendly products with established
marketplaces and to accomplish these through mergers and acquisitions.

     The Company will seek to list its stock for trading on the OTC Bulletin
Board, which may give the Company a better ability to attract investors. The
Company intends to raise capital to provide working capital and to expand its
present business segment. Also, the Company has outstanding warrants and stock
options that, if converted, will provide cash flow for working capital.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Pervasiveness of Estimates

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

Fair Value of Financial Instruments

     Accounts receivable, accounts and loans payable, customer deposits, line of
credit, and accrued liabilities are substantially current or bear reasonable
interest rates. As a result, the carrying values of these financial instruments
approximate their fair value.

Reclassifications

     Certain balances as of March 31, 2005, have been reclassified in the
accompanying financial statements to conform to the current year presentation.

Revenue Recognition

     Revenues from sales to distributors and resellers are recognized when title
to the product, ownership and risk of loss transfer to the customer, which is
when related products are shipped. Revenues from consignment sales are
recognized when payments are received. The Company had no consignment sales for
the years presented.

Cash and Cash Equivalents

     All short-term investments purchased with an original maturity of three
months or less are considered to be cash equivalents. Cash and cash equivalents
include cash on hand and amounts on deposit with a financial institution.


Accounts Receivable

     The Company follows the allowance method of recognizing uncollectible
accounts receivable. The allowance method recognizes bad debt expense as a
percentage of accounts receivable based on a review of the individual accounts
outstanding and the Company's prior history of uncollectible accounts
receivable. At March 31, 2006, an allowance has been provided for uncollectible
accounts receivable in the amount of $5,819 The Company does not have a formal
policy to charge interest on late payments of receivable amounts.

                                       F-10
<PAGE>
Concentration of Credit Risk

     The Company sells its products and extends credit to various customers
based upon their financial condition. Exposure to losses on accounts receivables
is principally dependent on each customer's financial condition. The Company
monitors its exposure for credit losses and maintains allowances for potential
losses when required.

     During the current and prior fiscal year, one customer accounted for 81%
and 69% of the Company Soltron(R) revenues, respectively. The customer referred
to is a major distributor of Soltron(R) product.

Inventory

     Inventory at March 31, 2006 and 2005, consists of the Soltron(R) fuel
additive concentrate, and is stated at the lower of cost or market using the
first-in, first-out (FIFO) method. The Company periodically reviews its
inventory and makes provisions for damaged or obsolete inventory, if necessary.
No provision for damaged or obsolete inventory has been included in the
accompanying financial statements.

Property and Equipment

     Property and equipment are recorded at cost. Depreciation is provided for
on the straight-line and declining balance methods over the estimated useful
lives of the assets. Ordinary maintenance and repairs that neither materially
add to the value of the property nor appreciably prolong its life are charged to
expense as incurred. Betterments or renewals are capitalized when incurred. When
assets are retired or disposed, the cost and accumulated depreciation are
eliminated from the account and any gain or loss is reflected in the statement
of operations.

Estimated useful lives of the assets are as follows:
         Computer and Office Equipment                                   5 years
         Furniture                                                     5-7 years

Intangible Asset - Royalty Contract

     The royalty contract is a provision in the sale of Virtual Technologies
Pty. Ltd. (Australia) at September 30, 2005. The sales contract provides for
royalty payments for a period of twenty (20) years and is equal to four percent
(4%) of gross sales, excluding taxes and freight. The royalty is due and payable
within forty-five (45) days at the end of each calendar quarter, beginning with
the quarter ending December 31, 2005. As part of the sale, the Company agreed
that it would not enter into any sales, distribution, licensing, manufacturing
or any other commercial application of the products (SP34E, SP22E-A, SP22E-B and
SB22E-C) for a period of five (5) years and to maintain all information
concerning the products as confidential.

     The intangible asset is being amortized on a straight-line basis over the
life of the agreement. On an ongoing basis, management will review the valuation
and amortization of the contract, taking into consideration any events or
circumstances which may have impairment on its fair value. At March 31, 2006,
management has made no provision for impairment of this intangible asset.

Research and Development Costs

     All research and development costs are expensed in the period incurred.
Capital expenditures incurred for research and development activities are
included in fixed assets. The Company had no research and development expense
for the years ended March 31, 2006 and 2005.


Impairment of Long-Lived Assets

     The Company reviews long-lived assets for impairment whenever events or
changes in circumstances indicate the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future undiscounted net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeded the fair value of the assets. Assets to
be disposed of are reported at the lower of the carrying amount or fair value
less costs to sell.

Income Taxes and Investment Tax Credits

     Deferred income taxes are provided on an asset and liability method,
whereby deferred tax assets are recognized for deductible temporary differences
and operating loss and tax credit carry-forwards, and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
basis. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, there is uncertainty of the utilization of the operating
losses in future periods. Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of enactment.

                                       F-11
<PAGE>
     Scientific research and development investment tax credits are recorded on
a project by project basis in the period when the Company has determined the
related research and development expenditures qualify for the tax incentives.
The Company had no such expenditures for the years ended March 31, 2006 and
2005.

Comprehensive (Loss)

     Statement of Financial Accounting Standards ("SFAS") No. 130, Reporting
Comprehensive Income, establishes requirements for disclosure of comprehensive
income and its components, which include, among other items, unrealized gains or
losses from marketable securities and foreign currency translation adjustments
that previously were only reported as a component of stockholders' equity. The
Company had components of comprehensive income (loss) during the periods
presented.

Foreign Currency Translation

     In accordance with Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation", foreign denominated monetary assets and
liabilities are translated into their U.S. dollar equivalents using foreign
exchange rates which prevail at the balance sheet date. Revenues and expenses
are translated at average rates of exchange during the year. Gains and losses
resulting from foreign currency transactions are included in results of
operations.

Basic Loss per Common Share

     Basic loss per common share is computed based on weighted average shares
outstanding and excludes any potential dilution from stock options, warrants and
other common stock equivalents. Basic loss per share is computed by dividing
loss available to common shareholders by the weighted average number of common
shares outstanding for the year. Diluted net loss per common share reflects
potential dilution from the exercise or conversion of securities into common
stock or from other contracts to issue common stock. As of March 31, 2006 and
2005, diluted net loss per common share is not included, as the effect of
including these shares is anti-dilutive.

     At March 31, 2006, stock options representing 1,000,000 common shares were
outstanding with an exercise price of $0.15.

Stock-Based Compensation

     The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees ("APB 25") and the related
interpretations in accounting for its employee stock options. Under APB 25,
because the exercise price of employee stock options equals or exceeds the
market price of the underlying stock on the date of grant, no compensation
expense is recorded. If the exercise price of employee stock options is under
the market price of the underlying stock on the date of grant, compensation
expense is recorded for the price differential times the quantity of options
granted. The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock Based
Compensation," as amended by SFAS No. 148, "Accounting For Stock-Based
Compensation - Transition & Disclosure."

     The Company recognized stock-based employee compensation for options issued
to two employees during the year ended March 31, 2005, amounting to $4,000 and
none was incurred during the year ended March 31, 2006.

     The fair value of option grants is estimated as of the date of grant
utilizing the Black-Scholes option-pricing model with the following weighted
average assumptions for all grants, expected life of options of 1.75 years,
risk-free interest rates of two and a quarter percent (2.25%), volatility of
177.26% and a zero percent (0%) dividend yield.

     Transactions in equity instruments with non-employees for goods and
services are accounted for by the fair value method.


                                       F-12
<PAGE>
     The following table illustrates the pro forma effect on net income (loss)
and earnings per share if the Company had applied the fair value recognition
provisions of FASB Statement No. 148, "Accounting For Stock-Based Compensation -
Transition & Disclosure, An Amendment To FASB Statement No. 123," to stock-based
employee compensation.
<TABLE>
<CAPTION>
                                                                        Year Ended March 31,
                                                                      2006             2005
                                                                   ---------        -----------
<S>                                                                   <C>              <C>
Net loss, as reported                                              $(285,174)       $(1,036,355)
Add: total stock-based employee compensation expense
         included in reported net loss                                    --              4,000

Deduct - stock-based compensation expense determined
         under the fair value method, net of tax effect                   --            (42,000)
                                                                   ---------        -----------

Pro forma net loss                                                 $(285,174)       $(1,074,355)
                                                                   =========        ===========

Loss per share:
    Net loss per share, as reported                                $   (0.00)       $     (0.02)
                                                                   =========        ===========
    Net loss per share, pro forma                                  $   (0.00)       $     (0.02)
                                                                   =========        ===========
</TABLE>

Recent Accounting Pronouncements

     In December 2004, the FASB issued SFAS No. 123 (Revised 2004) "Share Based
Payment" ("SFAS No. 123R"), which is a revision to SFAS No. 123 and supersedes
APB No. 25 and SFAS No.148. This statement requires that the cost resulting from
all share-based payment transactions be recognized in the financial statements.
This statement establishes fair value as the measurement objective in accounting
for share-based payment arrangements and requires all entities to apply a
fair-value based measurement method in accounting for share-based payment
transactions with employees except for equity instruments held by employee share
ownership plans.

     SFAS No. 123R applies to all awards granted after the required amended
effective date and to awards modified, repurchased, or cancelled after that
date. As of the required effective date, all public entities that used the
fair-value-based method for either recognition or disclosure under SFAS No. 123
will apply to SFAS No. 123R using a modified version of prospective application.
Under that transition method, compensation cost is recognized on or after the
required effective date for the portion of outstanding awards, for which the
requisite service has not yet been rendered, based on the grant-date fair value
of those awards calculated under SFAS No. 123 for either recognition or pro
forma disclosures. For periods before the required effective date, those
entities may elect to apply a modified version of the retrospective application
under which financial statements for prior periods adjusted on a basis
consistent with the pro forma disclosures required for those periods by SFAS No.
123. As a result, beginning in our fiscal quarter starting October 2006, we will
adopt SFAS No. 123R and begin reflecting the stock option expense determined
under fair value based methods in our income statement rather than a pro forma
disclosure in the notes to the financial statements. We expect the effect of
adopting SFAS No. 123R to be similar to the effect presented in our pro forma
disclosure related to SFAS No. 123.

     In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes - an interpretation of FASB No. 109" ("FIN 48"). FIN
48 clarifies the accounting for uncertainty in income taxes recognized in a
company's financial statements in accordance with SFAS No. 109 and provides
guidance on recognizing, measuring, presenting and disclosing in the financial
statements tax positions that a company has taken or expected to take on a tax
return. FIN 48 is effective for the Company as of July 1, 2007. The Company at
this time has not evaluated the impact, if any, of adopting FIN 48 on its
financial statements.

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements. This statement
addresses how to calculate fair value measurements required or permitted under
other accounting pronouncements. SFAS 157 is effective for the Company beginning
July 1, 2008. The Company at this time has not evaluated the impact, if any, of
SFAS 157 on its financial statements.

     The FASB has also issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments", SFAS No. 156, "Accounting for Servicing of Financial
Assets" and SFAS No. 158, "Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and
132(R)", but the Company does not believe they will not have any relationship on
its operations at this time.

     In September 2006, the SEC issued Staff Accounting Bulletin No. 108 ("SAB
No. 108"), which addresses the process and diversity in practice of quantifying
financial statement misstatements resulting in the potential build up of
improper amounts on the balance sheet. The Company will be required to adopt the
provision of SAB No. 108 in fiscal year 2007. The Company currently does not
believe that the adoption of SAB No. 108 will have a material impact on our
financial statements.

     In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 allows
entities to measure at fair value many financial instruments and certain other
assets and liabilities that are not otherwise required to be measured at fair
value. SFAS 159 is effective for fiscal years beginning after November 15, 2007.
We have not determined what impact, if any, that adoption will have on our
results of operations, cash flows or financial position.

                                       F-13
<PAGE>
NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following at March 31, 2006:

         Furniture and Fixtures                   $   3,181
         Computer and Office Equipment               22,350
                                                  ---------
                                                     25,531
             Less: Accumulated Depreciation         (25,531)
                                                  ---------
                                                  $      --
                                                  =========

         Depreciation expense charged to operations for the years ended March
31, 2006 and 2005 was $1,230 and $798, respectively.

NOTE 4 - INTANGIBLE ROYALTY AGREEMENT

     The intangible royalty agreement consists of the following at March 31,
2006:

                  Royalty Agreement                        $   120,000
                  Less: Accumulated Amortization                (3,000)
                                                           -----------
                                                           $   117,000
                                                           ===========


     Amortization expense charged to operations for the years ended March 31,
2006 and 2005 was $3,000 and $0, respectively. Estimated amortization expense
for each of the next five years is $6,000 per year.

NOTE 5 - MARKETING RIGHTS

     On November 4, 1996, the Company acquired the exclusive sales,
distribution, marketing and manufacturing rights to the Solpower product,
Soltron(R), a fuel enhancing product, encompassing the North American Market
(United States, Mexico and Canada), in exchange for 5,000,000 shares of common
stock valued at $500,000. The contract is for a period of five years. The
Company amortized the marketing rights over the original period of the contract.
The original marketing rights were fully amortized at March 31, 2002. The
contract was automatically renewed effective November 2001 at no additional cost
outlay to the Company.

     On June 17, 1998, the Company acquired the exclusive sales, distribution,
marketing and manufacturing rights to the Solpower product, SP34ETM (a
refrigerant) encompassing the North American Market (United States, Mexico and
Canada), in exchange for the issuance of 6,000,000 shares of common stock valued
at $2,400,000. The contract is for a period of five years, and pursuant to an
addendum to the agreement, the term of the agreement shall commence on the
Company achieving ratable sales of SP34ETM and in no event later than July 1,
2000. The Company was amortizing these marketing rights over the period of
contract.

     During the year ended March 31, 2002, management determined that the costs
associated with the marketing licenses for SP34ETM became impaired when the
Company sold its 50% interest in its subsidiary, which manufactured the SP34ETM
for the Company. Accordingly, the Company wrote off the balance associated with
these rights at March 31, 2002.

     The Company acquired 100% of the outstanding stock of Virtual Technologies
(Australia) Pty Ltd on January 31, 2003. The subsidiary was acquired by the
issuance of 6,000,000 shares of restricted common stock by the Company with a
valuation of $79,800. This acquisition delivered the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the products, SP34ETM,
SP22E-A, SP22E-B and SP22E-C, refrigerant gas products. On September 30, 2005,
the Company signed an agreement for the sale of 100% of the outstanding common
stock of Virtual Technologies Pty Ltd.

     On February 20, 2003, the Company acquired the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the Soltron(R) product. This
purchase was made by the issuance of 9,000,000 shares of restricted common stock
of the Company with a valuation of $119,700. During the year ended March 31,
2004, management determined that the costs associated with the marketing
licenses for Soltron(R) became impaired when sales for this product line
decreased substantially for the year ended March 31, 2004, as compared to the
sales for the previous year ended. Accordingly, the Company wrote-off the
$119,700 associated with this license at March 31, 2004.


                                       F-14
<PAGE>
NOTE 6 - COMMITMENTS

Operating Leases

     The Company currently has no minimum future rental payments for
non-cancelable operating leases.

     The Company currently leases an office in Coral Springs, Florida, on a
twelve month lease which was terminated May 1, 2006, and warehouse space in San
Pedro, California on a month to month basis. Total monthly lease payments prior
to the office lease termination approximated $655 per month.

     Lease expense charged to operations for the years ended March 31, 2006 and
2005,was $11,024 and $12,575, respectively.

Convertible Promissory Note

     On September 18, 2000, the Company issued a $400,000 Convertible Promissory
Note to Dominion Capital Pty Ltd. The note was to mature on September 18, 2001,
and is convertible into common shares of the Company at the lesser of the market
price on the date conversion notice is given to the Company or $0.40 per share
for the amount of principal outstanding at conversion. The note accrued interest
at 8% percent per annum, payable quarterly in arrears. The note was unpaid at
December 11, 2002, with accrued interest on the note amounting to $71,365 and
the note and accrued interest was assigned by Dominion Capital Pty Ltd. to
Australian Agriculture Management Pty Ltd. Pursuant to the provisions of the
Assignment and Amendment of Debt Agreement, the interest rate was reduced from
8% to 5%, quarterly payments of $64,813 were to be made, and the conversion rate
was reduced from $0.40 per common share to $0.10 per common share. The due date
of the note was also extended an additional twenty-four (24) months from the
date of the Agreement signing on November 22, 2002. As of November 30, 2004, no
payments had been made on this obligation. Subsequent to the amended due date of
the note, the Company negotiated with Australian Agriculture Management Pty Ltd.
to convert the loan obligation and accrued interest into restricted common
shares. On January 18, 2005, the Company's Board of Directors agreed by
unanimous consent to settle the debt and accrued interest for the issuance of
11,000,000 shares of restricted common stock to Australian Agriculture Property
Management Pty Ltd.

Other Commitments

     On January 15, 2005, the Board of Directors by unanimous consent, approved
Employment Agreements with Mr. Robert D. Kohn and Mr. Dale S. Shepherd for a
period of twelve (12) months at an annual salary of $100,000 and $75,000,
respectively, expense reimbursement and a grant of stock options representing
two (2) percent of the issued and outstanding stock of the Company to each
party. The Employment Agreements were not to be effective until the audit and
related filing of the Company's Annual Report on Form10-KSB for the year ended
March 31, 2005, were completed and filed with the Securities and Exchange
Commission. Mr. Kohn and Mr. Shepherd were to be retained as consultants on an
as needed basis until these requirements were met.

     Beginning in April 2005, Mr. Kohn became Interim CEO for the Company, and
continued to develop the Company's current business environment and develop a
business plan to move the Company into potential other profitable business
segments and enhance the performance of the current product mix. In October
2005, Mr. Kohn became the full time CEO for the Company and occupied this
position until his resignation effective May 1, 2006.

NOTE 7 - INCOME TAXES

     Deferred income taxes are determined using the asset and liability method
for the temporary differences between the financial reporting basis and income
tax basis of the Company's assets and liabilities. Deferred income taxes will be
measured based on the tax rates expected to be in effect when the temporary
differences are included in the Company's tax return. Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.




                                       F-15
<PAGE>
     At March 31, 2006 and 2005, deferred tax assets on United States reported
losses consist of the following:

                                             2006                  2005
                                          -----------           ----------
   Net operating loss carry-forwards      $ 4,909,000           $1,906,000
   Less: valuation allowance               (4,909,000)          (1,906,000)
                                          -----------           ----------

                                          $         -           $        -
                                          ===========           ==========

     At March 31, 2006 and 2005, the Company had United States federal net
operating loss carry-forwards in the approximate amounts of $13,812,000 and
$13,482,000 respectively, available to offset future taxable income expiring
through 2026 and 2025, respectively. For the year ended March 31, 2006, the
company utilized a Federal tax rate of 34% to calculate the deferred tax assets.
The Company had Arizona state net operating loss carry-forwards in the
approximate amount of $4,630,000 and $6,449,000 respectively, available to
offset future taxable income expiring through 2011 and 2010, respectively. A
state tax rate of 6.9% was utilized to calculate the deferred tax assets.

     In assessing the deferred tax assets, management considers whether it is
more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those
temporary differences become deductible. Management believes that the inability
to utilize net operating loss carry-forwards to offset future taxable income
within the carry-forward periods is more likely than not. Accordingly, a 100%
valuation allowance has been recorded against the net deferred tax assets.

NOTE 8 - RELATED PARTY TRANSACTIONS

Convertible Loan Payable to Related Party

     On September 18, 2000, the Company issued a $400,000 Convertible Promissory
Note to Dominion Capital Pty Ltd. The note was to mature on September 18, 2001,
and is convertible into common shares of the Company at the lesser of the market
price on the date conversion notice is given to the Company or $0.40 per share
for the amount of principal outstanding at conversion. The note accrued interest
at 8% percent per annum, payable quarterly in arrears. The note was unpaid at
December 11, 2002, with accrued interest on the note amounting to $71,365 and
the note and accrued interest was assigned by Dominion Capital Pty Ltd. to
Australian Agriculture Management Pty Ltd. Pursuant to the provisions of the
Assignment and Amendment of Debt Agreement, the interest rate was reduced from
8% to 5%, quarterly payments of $64,813 were to be made, and the conversion rate
was reduced from $0.40 per common share to $0.10 per common share. The due date
of the note was also extended an additional twenty-four (24) months from the
date of the Agreement signing on November 22, 2002. As of November 30, 2004, no
payments had been made on this obligation. Subsequent to the amended due date of
the note, the Company negotiated with Australian Agriculture Management Pty Ltd.
to convert the loan obligation and accrued interest into common shares. On
January 18, 2005, the Company's Board of Directors agreed by unanimous consent
to settle the debt and accrued interest for the issuance of 11,000,000 shares of
restricted common stock to Australian Agriculture Property Management Pty Ltd.

Purchase of Virtual Technologies (Australia) Pty Ltd.

     Effective January 31, 2003, the Company issued 6,000,000 shares of its
unregistered, restricted Common Stock pursuant to the terms of the Share
Purchase and Sale Agreement with Virtual Technologies (Australia) Pty Ltd. This
acquisition delivers the exclusive worldwide sales, distribution, marketing and
manufacturing rights to the products, SP34E, SP22E-A, SP22E-B and SP22E-C,
refrigerant gas products.

Purchase of Soltron(R) Worldwide Rights

     On February 20, 2003, the Company acquired the worldwide rights to the
product Soltron(R) under the terms of the Acquisition Agreement, by the issuance
of 9,000,000 restricted shares of its common stock to Dominion Capital Pty Ltd.
This acquisition delivered the exclusive worldwide sales, distribution,
marketing and manufacturing rights for the enzyme technologies for the product,
Soltron(R), a fuel-enhancing product. The costs associated with these marketing
rights were written off as of March 31, 2004 due to a determination that the
value of these assets was impaired.

                                       F-16
<PAGE>
Other

     Included in accrued expenses are amounts owed to Mr. Kohn. The Company
agreed to allow Mr. Kohn to keep computer equipment owned by the Company in
exchange for a reduction of the amounts owed Mr. Kohn for the fair value of the
computer equipment. See Note 6.

NOTE 9 - STOCKHOLDERS' DEFICIT

Stock Issued for Services and Debt

     On April 15, 2004, the Company issued 2,000,000 restricted shares of common
stock at $0.05 per share for consulting services.

     On April 20, 2004, the Company issued 800,000 restricted shares of common
stock at $0.03 per share in settlement of an outstanding account payable.

     On July 24, 2004, the Company issued 260,000 restricted shares of common
stock at $0.10 per share in settlement of an outstanding account payable.

     On September 13, 2004, the Company issued 425,000 restricted shares of
common stock for services at $0.15 per share, as provided for under an
agreement.

     On October 1, 2004, the Company issued 120,000 restricted shares of common
stock at $0.15 per share in settlement of an outstanding account payable.

     On November 30, 2004, the Company issued 42,166 restricted shares of common
stock at $0.05 per share for services.

     On January 18, 2005, the Company issued 11,000,000 restricted shares of
common stock at $0.0474 per share in settlement of a delinquent note payable and
accrued interest to a related party.

     On February 9, 2005, the Company issued 9,434 restricted shares of common
stock at $0.31 per share for services.

     On February 9, 2005, the Company issued 162,500 restricted shares of common
stock for services at $0.15 per share, as provided for under an agreement.

     On March 25, 2005, the Company issued 62,500 restricted shares of common
stock for services at $0.15 per share, as provided for under an agreement.

Common Stock Sold

     On April 20, 2004, the Company issued 600,000 shares of restricted common
stock at $0.05 per share pursuant to the sale of common stock in a private
placement.

     On May 25, 2004, the Company issued 1,000,000 shares of restricted common
stock at $0.066 per share pursuant to the sale of common stock in a private
placement.

     On July 7, 2004, the Company issued 400,000 shares of restricted common
stock at $0.05 per share pursuant to the sale of common stock in a private
placement.

     On July 7, 2004, the Company issued 500,000 shares of restricted common
stock at $0.066 per share pursuant to the sale of common stock in a private
placement.

     On November 11, 2004, the Company issued 383,333 shares of restricted
common stock at $0.11 per share pursuant to the sale of common stock in a
private placement.

     On February 5, 2005, the Company issued 500,000 shares of restricted common
stock at $0.05 per share pursuant to the sale of common stock in a private
placement.

     On March 9, 2005, the Company issued 132,667 shares of restricted common
stock at $0.11 per share pursuant to the sale of common stock in a private
placement.

     On July 29, 2005, the Company issued 750,000 of restricted common shares
for the exercise of stock warrants with an exercise price of $0.20 per share,
for total cash proceeds aggregating $150,000.

     On October 2, 2005, the Company issued 500,000 shares of restricted common
stock at $0.05 per share and aggregate of cash proceeds of $25,000, pursuant to
the sale of common stock in a private placement.

                                       F-17
<PAGE>

Stock Warrants

     On January 31, 2001, the Company commenced a private offering that
contained provisions for warrants attached to the common share units sold. As of
March 31, 2001, warrants to purchase 1,000,000 restricted shares of common stock
at $.20 per share were issued in relation to the offering. Additional common
share units were sold under this offering during period April 1, 2001 through
September 24, 2001 amounting to 567,500 and additional warrants were issued to
purchase 567,500 restricted shares of common stock at $0.20 per share. Warrants
issued under the offering originally expired on January 31, 2004.

     On January 21, 2004, the Board of Directors of the Company extended the
exercise period of 1,567,000 warrants from January 31, 2004 to January 31, 2005.
On January 11, 2005, the Board of Directors approved an additional extension to
July 30, 2005.The warrants had an exercise price of $0.20 per unit. The Company
applied variable accounting in relation to the extended warrants at March 31,
2005, utilizing the Black-Scholes option pricing model. The revaluation of the
extended warrants resulted in a $250,720 charge to operations for the year ended
March 31, 2005. On July 29, 2005, 750,000 of the 1,567,500 outstanding warrants
were exercised and the remaining warrants expired on July 30, 2005, unexercised.

A summary of stock warrants activity is as follows:


                                                                   Weighted
                                                Number of           Average
                                                Warrants        Exercise Price
  Outstanding at March 31, 2004                 1,567,500            $ 0.20

  Granted                                              --                 -
  Forfeited                                            --                 -
                                               ----------
  Outstanding at March 31, 2005                 1,567,500            $ 0.20

  Exercised                                      (750,000)           $(0.20)

  Expired                                        (817,500)           $(0.20)
                                               ----------
  Outstanding at March 31, 2006                        --
                                               ==========

Stock Options

     On June 1, 2004, the Company issued a call options to five individuals for
the option to purchase 1,000,000 shares of restricted common stock at $0.15 per
share. The options expire on May 31, 2007.

     On January 15, 2005, the Board of Directors by unanimous consent, approved
Employment Agreements with Mr. Robert D. Kohn and Mr. Dale S. Shepherd for a
period of twelve (12) months. The Agreements grant of stock options representing
two (2) percent of the issued and outstanding stock of the Company to each
party. The Employment Agreements are not effective until the audit and related
filing of the Company's Annual Report on Form10-KSB for the year ended March 31,
2005, are completed and filed with the Securities and Exchange Commission. Mr.
Kohn and Mr. Shepherd will be retained as consultants on an as needed basis
until these requirements are met. Upon becoming employees under the Agreement
terms, the options will be granted. The two referred to parties remained as
outside consultants and the Employment Agreements never became effective.

Incentive Stock Option Plan

     The Company has adopted the 1997 Solpower Corporation Stock Option and
Incentive Plan (the "Plan"). Pursuant to the Plan, options to purchase shares of
the Company's common stock may be granted to employees and directors. The Plan
provides that the option price shall not be less than the fair market value of
the shares on the date of grant, and that the options expire up to ten years
after grant. Options generally vest ratably over 3 to 5 year periods. At March
31, 2006, there were 5,000,000 shares reserved for options to be granted under
the Plan.

     On April 1, 2000, the Company entered into an employment agreement with Mr.
James Hirst. The agreement provides for cancellation of all previously issued
options and the issuance of 500,000 options at an exercise price of $1.00 per
share, which expired unvested on April 7, 2006.

     On September 5, 2001, the Company granted options to purchase an aggregate
of 350,000 shares of the Company's common stock to five employees. The options
may be exercised in whole or in part at any time after the vesting requirements
are achieved. These options vest based on minimum market price and reported
gross revenue level. On April 26, 2002, 250,000 of these options were canceled
as the employees related to these options left the employ of the Company. The
remaining 100,000 options expired on September 5, 2004 unexercised.


                                       F-18
<PAGE>

A summary of the option activity is as follows:

                                                                 Weighted
                                            Number of             Average
                                             Options         Exercise Price
                                        ----------------    --------------
    Outstanding at March 31, 2004                600,000             $1.88

    Granted                                    1,000,000             $0.15
    Forfeited                                   (100,000)           $(0.25)
                                         ---------------
    Outstanding at March 31, 2005              1,500,000             $0.43

    Granted
                                                      --
    Forfeited                                   (500,000)           $(1.00)
                                         ---------------
    Outstanding at March 31, 2006              1,000,000            $ 0.15
                                         ===============

Additional information about outstanding options to purchase the Company's
common stock as of March 31, 2006, is as follows:
<TABLE>
<CAPTION>
                   Options Outstanding                                     Options Exercisable
-----------------------------------------------------------        ------------------------------------
                                              Weighted
                                              Average                                      Weighted
    Exercise                                 Remaining                                      Average
    Price Per             Number            Contractual                 Number             Exercise
      Share             of Shares         Life (In Years)            Exercisable             Price
------------------    ---------------     -----------------        -----------------     --------------
<S>    <C>                     <C>               <C>                       <C>                <C>
      $0.15                1,000,000            1.2                       1,000,000          $0.15
                           =========                                      =========
</TABLE>

     Stock options issued to employees with an exercise price not less than the
fair market value of the Company's common stock on the date of grant result in
no compensation expense charged to operations. If the exercise price of employee
stock options is under the market price of the underlying stock on the date of
grant, compensation expense is recorded for the price differential times the
quantity of options granted. In accordance with accounting for such options
utilizing the intrinsic value method, the Company recorded compensation expense
in the Company's financial statements of $4,000 and $-0- for the years ended
March 31, 2005 and 2006, respectively. Had compensation cost for stock-based
compensation been determined based on the fair value of any options at the grant
dates consistent with the method of SFAS 123, the Company's net loss for the
years ended March 31, 2005 and 2006 would have been as presented in the pro
forma amounts in NOTE 2. No options were granted to employees for the year ended
March 31, 2006.

NOTE 10 - CONCENTRATIONS

     Major suppliers for the Company include the Japanese company that produces
the Soltron(R) enzyme concentrate. Supply of the Soltron(R) concentrate could be
interrupted due to work stoppages, strikes, and governmental or international
regulations. The solvent used as the suspension agent for Soltron(R), is
currently supplied by a major North American chemical company. If a supply
interruption should occur, other readily available solvents can be substituted.
The specially designed, single measure bottles for retail sales of Soltron(R)
are currently supplied by a major North American manufacturer. All other
materials for production of Soltron(R) are available from a variety of local
providers.

NOTE 11 - SUBSEQUENT EVENTS

     On May 1, 2006, the Board of Directors of the Company accepted the
resignation of Mr. Robert Kohn and appointed Mr. James Hirst as President, Chief
Executive and Principal Accounting Officer.

     On February 23, 2007, the Company issued 1,100,000 restricted shares of
stock to settle outstanding legal fees of $55,000

On March 2, 2007, the Company issued 600,000 shares of restricted shares of
stock for proceeds of $30,000 in a private placement.


                                       F-19
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On November 30, 2005, Solpower Corporation notified Semple & Cooper, LLP
("Semple & Cooper") that it was dismissing Semple & Cooper as its independent
registered public accounting firm. The decision was recommended and approved by
our Board of Directors. During the two fiscal years ended March 31, 2005 and
2004, and any subsequent period through November 30, 2005, there were no
disagreements with Semple & Cooper on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which,
if not resolved to the satisfaction of Semple & Cooper would have caused Semple
& Cooper to make reference to the matter in its reports on Registrant's
financial statements. Semple & Cooper's report on Registrant's financial
statements for the years ended March 31, 2005 and 2004 which included an
explanatory paragraph wherein they expressed substantial doubt about
Registrant's ability to continue as a going concern, Semple & Cooper's reports
on Registrant's financial statements did not contain an adverse opinion or
disclaimer of opinion, and was not modified as to uncertainty, audit scope or
accounting principles. During the two fiscal years ended March 31, 2005 and 2004
and through November 30, 2005, there were no reportable events. On November 30,
2005, Registrant engaged the firm of Meyler & Company, LLC to serve as its
independent registered public accountants for the fiscal year ending March 31,
2006. During the two fiscal years ended March 31, 2005 and 2004, and through
November 30, 2005, the Company has not consulted with Meyler & Company, LLC
regarding either:

     1.   The application of accounting principles to any specific transaction,
          either completed or proposed, or the type of audit opinion that might
          be rendered on Registrants' financial statements, and neither a
          written report was provided to Meyler & Company, LLC nor oral advice
          was provided that Meyler & Company, LLC concluded was an important
          factor considered by Registrant in reaching a decision as to the
          accounting, auditing or financial reporting issue; or

     2.   Any matter that was either subject of disagreement or event, as
          defined in Item 304(a)(1)(iv) of Regulation S-B and the related
          instruction to Item 304 of Regulation S-B, or a reportable event, as
          that term is explained in Item 304(a)(1)(iv) of Regulation S-B.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of March 31, 2006, we carried out an evaluation, under the supervision and
with the participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures were effective in ensuring that information required to be disclosed
by us in our periodic reports is recorded, processed, summarized and reported,
within the time periods specified for each report and that such information is
accumulated and communicated to our management, including our principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.

Changes in Internal Controls

During the quarter ended March 31, 2006, there had been no significant changes
in our internal controls that could significantly affect those controls
subsequent to the date of their last valuation.

                                       14
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT; AUDIT COMMITTEE FINANCIAL EXPERT; CODE
OF ETHICS

(a) Directors and Executive Officers

The directors and executive officers of Solpower, their ages and positions are
as follows:

Name                       Age     Positions Held(1)
----                       ---     --------------
Robert D. Kohn             58      President, CEO and Chief Accounting Officer
Fraser M. Moffat III       77      Director, Chairman
James H. Hirst             60      Director & Secretary

(1) All current directors serve until the next annual shareholders meeting or
their earlier resignation or removal.

Robert D. Kohn, joined Solpower as Interim President & CEO in April 2005. From
April 2004 to January 2005 Mr. Kohn was a financial specialist with Wachovia
Bank in Coral Springs, Florida. From May 2001 to April 2004 he was CFO with
Global Trade Group, Sharon, Massachusetts. From November 1999 to March 2001 he
was CEO and Chairman with Assetrade, Prussia, Pennsylvania. From February 1996
to March 2000 he was Chairman and CEO of Entrade.com owned by Peco Energy in
Philadelphia and Chicago, Illinois. Mr. Kohn is a CPA and graduated in 1972 with
a Bachelor of Arts from Temple University. Philadelphia, Pennsylvania. Mr. Kohn
resigned effective May 1, 2006.

Fraser M. Moffat III, joined Solpower as a Director and Chairman of the Board in
May 1998. Since 1995, Mr. Moffat has primarily managed his personal investments.
From January 1985 through February 1995, Mr. Moffat was First Vice President of
Institutional Sales at Lehman Brothers, Inc. in Hamburg, Germany. From October
1971 to December 1984, Mr. Moffat was a Vice President at Merrill Lynch, Inc.
Previously, Mr. Moffat served in the United States Navy from 1953 to 1956 where
he attained the rank of Lieutenant Commander. Mr. Moffat graduated from Williams
College in 1951 with a BA degree.

James H. Hirst, has served as President and CEO since April, 2001. He served as
Secretary/Treasurer from March 2000 to April 2001, as Chief Executive Officer of
Solpower from September 1997 to March 2000, as President from May 1998 to March
2000 and as a Director from May 1998 to present. Mr. Hirst from March 1981 to
present has provided consulting services to early stage companies in connection
with their operations, financial information systems and legal compliance. In
1979, Mr. Hirst received a Bachelor of Commerce (Accounting and Management
Information Systems) degree from the University of British Columbia. Effective
May 1, 2006. Mr. Hirst was appointed to the position of Chief Executive Officer,
President and Chief Accounting Officer.

(b) Compliance with Section 16(a) of the Exchange Act

The following information relates to reports under Section 16(a) of the Exchange
Act that were not timely filed by officers, directors and beneficial owners of
10% or more of Solpower's common stock during the fiscal year ended March 31,
2004. This information is based on a review of Section 16(a) reports furnished
to Solpower.

Corey Stewart failed to timely file a report of Form 4 related to the exercise
of 250,000 warrants on July 29, 2005.

                                       15
<PAGE>
AUDIT COMMITTEE FINANCIAL EXPERT

We have not appointed an audit committee and, accordingly, do not have an audit
committee financial expert. Due to the small size of our Board of Directors, the
audit committee function is performed by the full board. We have determined to
defer creation of an audit committee and engagement of an audit committee
financial expert until such time as our business operations have grown and an
increase to the size of the board of directors is warranted.

CODE OF ETHICS

In February of 2005, the Board of Directors adopted a Code of Ethics meeting the
requirements of Section 406 of the Sarbanes-Oxley Act of 2002. Our Code of
Ethics is publicly available on our web site at www.solpower.com. If we make
substantive amendments to the Code of Ethics or grant any waiver, including any
implicit waiver, we will disclose the nature of such amendments or waiver on our
web site or in a report on Form 8-K. We will provide to any person without
charge, upon request, a copy of such Code of Ethics. Persons wishing to make
such a request should contact James H. Hirst, President and CEO, 307 East 22nd
Street, San Pedro, California, 90731 or contact by telephone at (310) 940-6408.

ITEM 10. EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for the fiscal years
ended March 31, 2006, 2005 and 2004 for the sole officer. No other person
received salary or bonus in excess of $100,000 for any of these fiscal years.
                           Summary Compensation Table
<TABLE>
<CAPTION>
--------------------------------- ----------------------------------------------------- ----------------------
                                                                                              Long Term
                                                  Annual Compensation                       Compensation
--------------------------------- -------------- ---------------- --------------------- ----------------------
                                                                         Other                  Stock
Name and Principal Position          Fiscal                              Annual                Options
                                      Year           Salary           Compensation            (Shares)
--------------------------------- -------------- ---------------- --------------------- ----------------------
<S>                                   <C>              <C>                  <C>                  <C>
Robert D. Kohn                        2006              -               $100,000                  -
President & CEO                                         -

James H. Hirst                        2005                              $ 72,000                  -
President & CEO                       2004                              $104,100                  -
--------------------------------- -------------- ---------------- --------------------- ----------------------

Option Grants

The following table sets forth information regarding the grants of options to
executive officers for the fiscal year ended March 31, 2006.

                        Option Grants in Fiscal Year 2001

--------------------- --------------------------- ------------------------ ----------------------- -----------------------
                                                        % of Total
                           Number of Shares        Compensation Options
                      Underlying Options Granted  Granted in Fiscal Year
        Name                                                                   Exercise Price         Expiration Date
--------------------- --------------------------- ------------------------ ----------------------- -----------------------

James H. Hirst                 500,000                      40%                    $1.00               April 1, 2006
--------------------- --------------------------- ------------------------ ----------------------- -----------------------

                        Option Grants in Fiscal Year 2005

--------------------- --------------------------- ------------------------ ----------------------- -----------------------
                                                        % of Total
                           Number of Shares        Compensation Options
                      Underlying Options Granted  Granted in Fiscal Year
        Name                                                                   Exercise Price         Expiration Date
--------------------- --------------------------- ------------------------ ----------------------- -----------------------

James H. Hirst                 200,000                      42%                    $0.15                May 31,2007
--------------------- --------------------------- ------------------------ ----------------------- -----------------------



                                       16
<PAGE>
Option Exercises and Values

The following table sets forth information regarding the exercise and values of
options held by executive officers as of March 31, 2006.

                          Aggregate Option Exercises In
               Last Fiscal Year and Fiscal Year-End Option Values

 ------------------------ ------------------------ ---------------------- ----------------------- ----------------------
                                                                                                  Value of Unexercised
                                                                           Number of Unexercised  In-the-Money Options
                                                                            Options at March 31,    at March 31, 2006
                                                                                    2006
 ------------------------ ------------------------ ---------------------- ----------------------- ----------------------
                            Shares Acquired on                                  Exercisable/          Exercisable/
           Name                  Exercise             Value Realized           Unexercisable          Unexercisable
  ----------------------- ------------------------ ---------------------- ----------------------- ----------------------

  James H. Hirst                     0                       0                   200,000/0                $0/$0
  ----------------------- ------------------------ ---------------------- ----------------------- ----------------------
</TABLE>

Employment Agreements

Mr. Hirst was an at-will employee during the years ended March 31, 2005 and
2004.

On January 15, 2005, the Board of Directors by unanimous consent, approved
Employment Agreements with Mr. Robert D. Kohn and Mr. Dale S. Shepherd for a
period of twelve (12) months at an annual salary of $100,000 and $75,000,
respectively, expense reimbursement and a grant of stock options representing
two (2) percent of the issued and outstanding stock of the Company to each
party. The Employment Agreements were not to be effective until the audit and
related filing of the Company's Annual Report on Form10-KSB for the year ended
March 31, 2005, were completed and filed with the Securities and Exchange
Commission. Mr. Kohn and Mr. Shepherd were to be retained as consultants on an
as needed basis until these requirements were met. During the fiscal year ending
March 31, 2006, Mr. Kohn was an at-will employee and remained as such until he
resigned on May 1, 2006. Mr. Shepherd was not employed by the Company. The
aforementioned Employment Agreements never became effective.

Director Compensation

All authorized out-of-pocket expenses incurred by our directors on behalf of
Solpower are subject to reimbursement. Mr. Moffat was granted 500,000 shares in
September 2003 for past services. These shares were valued at approximately
$20,500 at the date of issuance.

Stock Option Plan

In November 1997, the Board of Directors adopted a Stock Option and Incentive
Plan (the "Plan"), which the shareholders approved on November 22, 1997. The
purpose of the Plan is to provide a means to attract employees and service
providers and to reward persons responsible for the successful administration
and management of Solpower. Another purpose of the Plan is to provide such
persons with additional incentive and reward opportunities designed to enhance
profitable growth. So that the appropriate incentive can be provided, the Plan
provides for granting options, incentive stock options, stock appreciation
rights, restricted stock awards, performance shares and dividend equivalents, or
any combination of the foregoing. In 1999, the Plan was amended by the Board of
Directors to increase the number of shares that can be granted under the Plan to
2,500,000 shares of Solpower common stock. In 2000, the Plan was further amended
by the board of Directors and approved by the shareholders to increase the
number of shares that can be granted under the Plan to 5,000,000 shares of
common stock. As of March 31, 2006, no options were outstanding under the Plan.


                                       17
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 31, 2006, the ownership of each
person known by us to be the beneficial owner of five percent or more of our
Common Stock, each officer and director individually, and all officers and
directors as a group. We have been advised that each person has sole voting and
investment power over the shares listed below unless otherwise indicated.


Name and Address                                Amount and Nature     Percent of
of Beneficial Owner                               of Ownership         Class (1)
--------------------------------------------------------------------------------
Fraser M. Moffat III (2)                           535,826                0.76%
18 Lake Avenue
Montrose, Pennsylvania

James H. Hirst(2)                                3,905,600(3)              5.5%
7309 East Stetson Drive
Scottsdale, Arizona

Australian Native Estates Pty Ltd.  (5)          4,000,000(4)              5.7%
c/o 13 Malcolm Court
Mt. Waverly, Victoria 3189 Australia

Marino Investment Services Ltd.                  4,143,600(4)              5.9%
c/o 13 Malcolm Court
Mt. Waverly, Victoria 3189 Australia

Greg Stewart                                     7,497,082(5)             10.6%
307 East 22nd Street
San Pedro, CA 90731

Peter Voss (7)(8)                               16,346,335(6)             23.2%
39 De Havilland Road
Mordialloc 3195
Victoria, Australia

All Directors and Officers                       4,441,426                 6.3%
as a Group (5 persons)

--------------------------------
(1) Based upon 70,559,727shares of common stock being issued and outstanding on
March 31, 2006.
(2) Mr. Hirst has been granted options to purchase up to an additional 500,000
shares of common stock at $1.00 per share upon the market price of the common
stock attaining certain levels. These options have not vested, are not
exercisable until vested and are not included in the total above.
(3) Includes 130,000 shares issuable under a deferred compensation arrangement
and 775,500 shares held by Mr. Hirst's wife in which Mr. Hirst disclaims all
beneficial ownership.
(4) Australian Native Estates Pty Ltd., and Marino Investment Services Ltd.,
are Australian corporations controlled by Peter Voss.
(5) Mr. Stewart controls Purse Seine Soma, Inc., which holds 300,000 shares and
Purse Seine, Inc., which holds 200,000 shares.
(6) Mr. Voss controls Pastoral Heights Pty Ltd., which holds 3,000,000 shares;
Dominion Capital Pty Ltd., which holds 70,000 share;, A1 Financial Planners Pty
Ltd., which holds 666,666 share;, Intavest Pty Ltd., which holds 681,775 share;,
Bio Engineering Pty Ltd., which holds 114,294 shares and Dominion Capital, Inc.,
which holds 370,000 shares. The total reflected includes 3,300,000 shares held
by Mr. Voss' wife and two adult children and in which Mr. Voss disclaims all
beneficial interest.
(7) Dominion Capital has been granted an option to acquire 750,000 shares of
common stock at prices ranging from $2.50 to $5.00 per share upon Soltron(R)
sales revenues attaining certain levels. These options have not vested, are not
exercisable until vested and are not included in the total above.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective January 31, 2003, we acquired 100% of the outstanding stock of Virtual
Technologies (Australia) Pty Ltd. The subsidiary was acquired by the issuance of
6,000,000 shares of restricted common stock by the Company. This entity is
controlled by Mr. Peter Voss.

On February 20, 2003, we acquired the worldwide rights to the product
Soltron(R)) by the issuance of 9,000,000 restricted shares of its common stock
to Dominion Capital Pty Ltd. This entity is controlled by Mr. Peter Voss.

On September 22, 2003, we issued 1,000,000 restricted shares of common stock to
Matthew Cohen, the Company's General Manager of Marketing and Technical
Services, as compensation for services. The shares were issued in reliance on
exemption from registration provided by Section 4(2) of the Securities Act.

On September 22, 2003, we issued 500,000 restricted shares of common shares to
Fraser Moffat, a director of the Company, as compensation for services. The
shares were issued in reliance on exemption from registration provided by
Section 4(2) of the Securities Act.

Our general policy for entering into transactions with directors, officers and
affiliates that have a financial interest in the transaction is to adhere to
Nevada corporate law regarding the approval of such transactions. In general, a
transaction between a Nevada corporation and a director, officer or affiliate of
the corporation in which such person has a financial interest is not void or
voidable if the interest is disclosed and approved by disinterested directors or
shareholders or if the transaction is otherwise fair to the corporation.

                                       18
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

2.1(1)   Articles of Merger, merging Virtual Technologies Inc., a Utah
         corporation, into Virtual Technologies Inc., a Nevada corporation,
         dated July 26, 1996.

2.2(1)   Plan of Merger of the Company, merging Virtual Technologies Inc.,
         a Utah corporation into Virtual Technologies Inc., a Nevada
         corporation, dated July 19, 1996.

3.1(1)   Restated Articles of Incorporation of Solpower Corporation dated
         November 24, 1997.

3.2(1)   Amended and Restated Bylaws of Solpower Corporation dated November 24,
         1997.

10.1(1)  Acquisition Agreement dated November 4, 1996 between Dominion Capital
         Pty Ltd. and Virtual Technologies, Inc. for the Distribution &
         Manufacturing Rights of Soltron Product.

10.2(1)  Acquisition Agreement amendment dated November 24, 1997 outlining
         clarifications and extensions of original Acquisition Agreement dated
         November 4, 1996.

10.3(1)  Addendum to Acquisition Agreement dated May 13, 1998.

10.4(1)  Acquisition Agreement dated June 17, 1998 between Dominion Capital Pty
         Ltd. and Solpower Corporation for the Distribution and Manufacturing
         Rights of SP34E Product.

10.12(1) Solpower Corporation Stock Option and Incentive Plan dated November 22,
         1997.

10.16(1) Client Services Agreement between Solpower Corporation and Dominion
         Capital Securities, Inc. dated July 1, 1998.

10.17(2) Addendum to June 17, 1998 Acquisition Agreement effective January 1,
         1999.

10.29(3) Amendment to Lease between Arizona Industrial Capital, LP and Solpower
         Corporation dated December 15, 2000.

10.30(4) Agreement between Virtual Technologies (Australia) Pty Ltd. and A-Gas
         (Australia) Pty Ltd., dated August 20, 2002, relating to the Australia
         and New Zealand production and distribution of SP34E(TM).

10.31(4) Acquisition Agreement between Virtual Technologies (Australia) Pty Ltd.
         and Dominion Capital Pty Ltd., effective January 31, 2003, relating to
         the worldwide rights to SP34E(TM) and other related refrigerant gases.

10.32(4) Acquisition Agreement between Solpower Corporation and Dominion Capital
         Pty Ltd., dated February 20, 2003, relating to the acquisition of
         worldwide rights to Soltron(R).

10.33    Agreement between Solpower Corporation and Les Woodridge, dated
         September 30, 2005, relating to the sale of Virtual Technology Pty Ltd.

31.1     Certifications required by Rule 13a-14, as adopted pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002.

32.1     Certification of Chief Executive Officer and Principal Accounting
         Officer pursuant to 18 U.S.C.ss. 1350, as adopted pursuant to Section
         906 of the Sarbanes-Oxley Act of 2002.

(1)  Incorporated by reference from Solpower's Form 10-SB as filed on August 21,
     1998.

(2)  Incorporated by reference from Solpower's Form 10-KSB as filed on September
     24, 1999.

(3)  Incorporated by reference from Solpower's Form 10-QSB as filed on February
     20, 2001.

(4)  Incorporated by reference from Solpower's Form 10-KSB as filed on May 26,
     2005.

(b)  Reports on Form 8-K

     None.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The following table summarizes the aggregate fees billed by Semple &
Cooper, LLP for the fiscal year ended March 31, 2005 and paid and accrued fees
for the fiscal year ended 2006 to Semple & Cooper and Meyler and Company:

                                           Year Ended March 31,
                                         2006                2005
                                         ----                ----
   Audit Fees (1)                      $39,000             $ 17,000
   Audit-Related Fees (2)               52,683               17,932
   Tax Fees                                  -                    -
                                       -------             --------
   Total                               $91,683             $ 34,932
                                       ========            ========


(1)  Fees for audit services billed or accrued in fiscal years 2006 and 2005
     consisted of audit of Solpower Corporation's annual financial statements.

(2)  Fees for review services for quarterly security filings billed or accrued
     for fiscal year 2006.

                                       19
<PAGE>
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    SOLPOWER CORPORATION


Dated:   May  29, 2007              By: /s/ James H. Hirst
                                        ------------------
                                        James H. Hirst, Chief Executive Officer,
                                        President


                                    BOARD OF DIRECTORS


Dated:   May  29, 2007              By: /s/ Fraser M Moffat III
                                        -----------------------
                                        Fraser M. Moffat III, Chairman


Dated:   May  29, 2007              By: /s/ James H. Hirst
                                        ------------------------
                                        James H. Hirst, Director



                                       20