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

                                  FORM 10-KSB/A

                                   (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, 2003

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

       For the transition period from _______________ to ________________

                         Commission File Number: 0-29780

                              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.)

        11500 Heron Bay Boulevard
        Suite 200
        Coral Springs, Fl.                                     33076
(Address of principal executive offices)                     (Zip Code)

                   (954) 603-0520 (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/A or any
amendment to this Form 10-KSB/A. [ ]

Registrant's revenues for the fiscal year ended March 31, 2003 were $951,195.

The aggregate market value of the common stock held by non-affiliates computed
based on the closing price of such stock on March 31, 2003 was approximately
$2,901,201.

The number of shares outstanding of the registrant's classes of common stock, as
of March 31, 2003 was 49,212,127 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/A FOR THE
                        FISCAL YEAR ENDED MARCH 31, 2003



PART I........................................................................1
   ITEM 1.  DESCRIPTION OF BUSINESS...........................................1
   ITEM 2.  DESCRIPTION OF PROPERTY..........................................12
   ITEM 3.  LEGAL PROCEEDINGS................................................12
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............12

PART II......................................................................12
   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........12
   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........14
   ITEM 7.  FINANCIAL STATEMENTS.............................................16
   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE.........................................43

PART III.....................................................................43
   ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
            COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT................43
   ITEM 10. EXECUTIVE COMPENSATION...........................................44
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...45
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................47
   ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.................................49
<PAGE>
                                Preliminary Note

This amendment to the Annual Report on Form 10-KSB of Solpower Corporation is
being filed for the sole purpose of including the correct exhibit 10.41.

                                     PART I

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

Except for historical information contained herein, this Form 10-KSB/A 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/A and in any exhibits attached.

Although we believe that the assumptions underlying our forward-looking
statements in this Form 10-KSB/A 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/A.

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 and SP34E(TM), an ozone safe
alternative refrigerant. We currently distribute these products primarily
through sales channels in Central America and American Samoa, although our
business plan contemplates distribution throughout the United States, Canada and
Mexico as well. SOLTRON(R) is distributed through traditional channels,
including fuel wholesalers, oil distributors for bulk treatment, marine and
automotive after-market stores, appointed distributors and directly to



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end-users. During the quarter ended September 30, 2002, we closed our Phoenix,
Arizona production facility and relocated our corporate headquarters to San
Pedro, California. Since closing our production facility, we have outsourced the
blending and bottling of SOLTRON(R).

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 was 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.

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, SP22A, SP22B, SP22C and SP22E.

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.

PRODUCTS

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'S(R) 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.



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<PAGE>
SOLTRON(R) is marketed in North America 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. The SOLTRON(R) product has been
accepted and used in the marine industry where biological fuel contamination is
a persistent problem.

SP34E(TM). SP34E(TM) is a non-ozone depleting refrigerant developed in Japan by
the Kinoh-Kinzohu Company as a replacement for ozone-depleting fluorinated
refrigerants commonly used prior to newly enacted environmental regulations
phasing out ozone-depleting fluorinated refrigerants. SP34E(TM) is currently
sold in Canada, Japan, Australia, New Zealand and other Asian rim countries.
Significant use data has been developed for this product, the results of which
have consistently shown that SP34E(TM) is an acceptable near "DROP-IN"
replacement for CFC-R-12 in mineral oil based refrigerant applications.
SP34E(TM) generally does not require replacement of mechanical components or
removal of mineral oils that are found in older refrigeration systems. This
product may be used in domestic, automotive, residential, commercial and
transport refrigeration and air conditioning systems as an alternative to CFC-
R-12 (Freon) and other fluorinated refrigerants. In Australia, a specific
version of SP34E(TM), called SP-AUTO, has been developed specifically for the
automotive segment of the market. This product has an ultraviolet dye blended
into the product for easy leak detection.

KLEAN. The KLEAN line of products included EZKLEAN, SOILKLEAN and PETROKLEAN.
Applications for these products included degreasing, odor control, soil and
groundwater remediation, wastewater treatment and petroleum deposit removal. We
stopped producing and marketing these products as of March 31, 2003. We may
reintroduce the KLEAN product line at some point in the future, but have no
current plans to do so.

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 Neway Japan K.K. of Tokyo, Japan and supplied to us
through our licensing agreement acquired from Dominion Capital. Low odor base
solvent is readily available through numerous local suppliers. We have also
developed our own proprietary bottle design for retail packaging and have
selected manufacturers that can produce our bottles in quantities sufficient to
meet our anticipated needs.

SP34E(TM). The components of SP34E(TM) are readily available from numerous
local, national and international suppliers throughout the world.

MARKETING STRATEGIES

We monitor acceptance of our existing products 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.



                                        3
<PAGE>
SOLTRON(R). The fuel market may be divided into distinct groups such as
gasoline, diesel, bunker and aviation 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.

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) and we are currently focusing on all North American markets. We
are also 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 began distribution of SOLTRON(R) in June 1998. We originally attempted to
create a distribution channel for SOLTRON(R) through a series of licensing
agreements. We terminated all such licensing arrangements in 1999, and we now
manage all our manufacturing and distribution systems at the company level. 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
and West Marine.

SP34E(TM). Refrigerants are widely used in motor vehicle, commercial and
residential air-conditioning and refrigeration units in the residential,
automotive, commercial and transportation sectors. Historically,
chlorofluorocarbons ("CFCS"), hydrochlorofluorocarbons ("HCFCS") and
hydrofluorocarbons ("HFCS") have been utilized as refrigerants. CFCs used as
refrigerants include R-12, HCFCs include R-406A, and HFCs include R-134a.
Emissions of CFCs and HCFCs have been proven to cause depletion of the ozone
layer resulting in global warming. The EPA has banned production or importation
of CFCs and production of HCFCs is scheduled to be phased out in the United
States by 2030. Although HFCs also contain gases that have global warming
potential, HFCs have not yet been banned or scheduled for phase-out. We obtained
Environmental Protection Agency approval of SP34E(TM) in December 2000. See
"REGULATIONS" below. SP34E(TM) is an environmentally safe replacement for R-12
refrigerants with greater efficiency and less negative environmental impact.

We are not currently marketing SP34E(TM) in North America, but we are in the
process of formulating a marketing plan to reintroduce the product in various
markets. Our newly acquired subsidiary, Virtual Technologies (Australia) Pty
Ltd. ("VIRTUAL TECHNOLOGIES"), is responsible for marketing and sales of
SP34E(TM) and related refrigerant gases in Australia and New Zealand, where
SP34E(TM) is produced and sold pursuant to a licensing agreement with A-Gas
(Australia) Pty Ltd. ("A-GAS"). Pursuant to that agreement, dated August 20,
2002, Virtual Technologies granted A-Gas the license to the SP34E(TM)
formulation and brand name, together with exclusive manufacturing and
distribution rights for SP34E(TM) in Australia and New Zealand. Also pursuant to
the agreement, Virtual Technologies leased certain plant and equipment necessary



                                        4
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for the production of SP34E(TM) to A-Gas. In return, A-Gas pays Virtual
Technologies a royalty of $4.75 per kilogram of SP34E(TM) sold, with such
royalties being paid on a monthly basis. The initial term of the agreement is
five years and it automatically renews for successive three-year periods unless
terminated by one of the parties.

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. We exercised this
option to renew for an additional five years. 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 20 years,
with an option to renew for an additional 20 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 is 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
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, SP22A, SP22B,
SP22C and SP22E. As discussed above under "MARKETING STRATEGIES," Virtual
Technologies has licensed SP34E(TM) and granted exclusive manufacturing and
distribution rights in Australia and New Zealand to A-Gas.

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 products. 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.

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



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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'S(R) penetration in the West
Coast recreational marine industry, we believe we can differentiate SOLTRON(R)
from our competitors' products, successfully compete with these products and
penetrate additional fuel additive markets. See "DESCRIPTION OF
BUSINESS-PRODUCTS" above.

With respect to SP34E(TM), we will compete with numerous national and
international companies that produce refrigerants and blended alternatives,
including DuPont(R), Elf Autochem, Imperial Chemical Industries and Allied
Signal, among others. Certain of our competitors' products contain HCFCs, the
production of which is scheduled to be phased out. With respect to other
products containing HFCs, SP34E(TM) may be used in existing R-12 mineral oil
based systems with less costly conversions of such systems. We believe that the
regulatory ban and phase-out of certain refrigerants combined with the
environmentally safe characteristics and product utility of SP34E(TM) will allow
us to compete successfully in the refrigerant market. However, there can be no
assurance that we will be able to successfully market SP34E(TM) as a viable
alternative to the refrigerants that currently enjoy widespreAD market
acceptance. We are currently formulating a new marketing plan to reintroduce
SP34E(TM) into various markets. At this time we have no formal marketing program
to introduce SP34E(TM) to marketplace in the United States. In addition, Virtual
Technologies is developing a world marketing plan for SP34E(TM).

Our ability to compete successfully will depend on our success at penetrating
each targeted market segment with our products, consumer acceptance of our
products 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
products will meet with consumer approval, that competitors will not develop and
market products that are similar or superior to our products or that we will be
able to successfully enhance our products or develop new products meeting with
consumer approval.



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<PAGE>
PRODUCTION FACILITY

During part of the fiscal year 2003, our primary production facility was located
in Phoenix, Arizona. This facility served as our production, warehousing and
distribution plant for SOLTRON(R) and the KLEAN enzyme products, as well as our
administrative offices. See "DESCRIPTION OF PROPERTY" and "NOTES TO THE
FINANCIAL STATEMENTS - Note 5." In August, 2002, we closed the Phoenix facility,
relocated our corporate headquarters to San Pedro, California and have
outsourced the production, warehousing and distribution of SOLTRON(R) to various
batch-process blending and bottling companies.

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 filed an Information Notice with the EPA under the Significant New
Alternatives Policy ("SNAP") program in order to categorize the acceptable uses
of SP34E(TM) and in December 2000, SP34E(TM) was added to the EPA/SNAP list of
acceptable alternatives.

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.



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EMPLOYEES

At March 31, 2003, we employed two full time personnel, including one
administrative and one sales personnel. Our employees are not covered by any
collective bargaining agreements and we consider our relationship with our
employees to be good. Virtual Technologies has one administrative employee.

FACTORS AFFECTING FUTURE PERFORMANCE

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) and we are still formulating a new
marketing plan for SP34E(TM) in various territories. Additionally, we have
discontinued our KLEAN product line.

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 REQUIREMENT. 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 traditional marketing channels, such as distributors in the fuel, oil
chemical and automotive aftermarket industries. We unsuccessfully attempted to
establish the distribution of SP34E(TM) through a company with a national
network. However, the refrigerant market is highly competitive and acceptance of
our product will require substantial additional time and marketing efforts.
Numerous factors, including lack of sufficient inventory or capital, or failure
of our products 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 products. While we intend
to engage qualified personnel to assist in establishing our distribution
network, no assurance can be given that our products 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 WIDESPREAD MARKET ACCEPTANCE OF PRODUCTS, LIMITED MARKETING
EXPERIENCE. We are still in the early stages of marketing SOLTRON(R) and
SP34E(TM). Demand and market acceptance for our products is subject to a high



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degree of uncertainty. Achieving widespread market acceptance for our products
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 products. 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 products. 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 products 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
products 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.

LIMITED PRODUCT LINE. We currently hold the marketing and distribution rights to
SOLTRON(R) and SP34E(TM). Our future success and profitability will, to a very
high degree, depend upon the market acceptance of these products and our ability
to improve these products.

SUPPLY, CAPACITY AND DISTRIBUTION CONSTRAINTS. To successfully market our
products, 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 chemicals needed to produce
SOLTRON(R) in volumes sufficient to meet demand will also affect our ability to
produce this product. Also, our ability to engage third party blenders and
bottlers and the ability of said third parties to timely fulfill our orders will
affect our ability to deliver our products. Failure to adequately supply
products to distributors and retailers or of any of our suppliers or service
providers 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 Chief Executive Officer, James H.
Hirst. Mr. Hirst is an at-will employee and we do not maintain key man life
insurance on



                                       9
<PAGE>
Mr. Hirst. 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. Our limited experience in the refrigerant market suggests
that a greater demand for SP34E(TM) will occur in summer months, which is
anticipated to result in higher revenues in our first and second fiscal quarters
ending June 30 and September 30, respectively. 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, refrigerants and enzyme based
cleaning and bio-remediation products are highly competitive. We believe that
our products 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 products are 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.

LIMITED PATENT AND PROPRIETARY INFORMATION PROTECTION. We do not believe that
our products 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 products or processes do
infringe someone else's proprietary rights, we could be required to modify our
products 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
any of our products 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 products 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



                                       10
<PAGE>
adequately protect our trade secrets or that other companies will not acquire
information that we consider proprietary.

PRODUCT ACQUISITION AGREEMENT. At March 31, 2003, we owned the worldwide rights
to manufacture and distribute SOLTRON(R) and SP34E(TM), as well as the process,
formulae and other proprietary rights related to such products, 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) and SP34E(TM) is substantially complete, but testing of these
products 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 products will result in the need for
further refinement of our products and development of new products. Such
refinements and development may be required for our products 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 products 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 SHAREHOLDERS/FOREIGN SHAREHOLDERS. Several of our principal
shareholders and their affiliates are domiciled or reside in foreign countries.
These shareholders, acting together, would be able to effectively control
matters requiring approval by our shareholders, including the election of our
board of directors and approval of certain significant transactions. If we, or
our shareholders, were to bring legal action against these shareholders, their
domicile or residence 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 foreign shareholders in their country of domicile
or residence, such actions may be prohibitively expensive and the foreign courts
may not recognize claims or provide remedies similar to those available in
United States courts.

INTERNATIONAL TRADE. We currently anticipate selling SOLTRON(R) and SP34E(TM)
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.



                                       11
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY

During part of fiscal year 2003, we leased approximately 14,000 square feet of
space at 4247 West Adams Street, Phoenix, Arizona 85009, which housed our
SOLTRON(R) and KLEAN manufacturing, warehousing and distribution plant and
served as our administration and corporate sales office. Monthly lease payments
were approximately $7,300. This lease expired September 14, 2002. Prior to
expiration of the lease, we sold our equipment at this site and relocated our
corporate offices to San Pedro, California.

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.

                                     PART II

ITEM 5.MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET AND SHAREHOLDER INFORMATION

Our common stock was traded on the OTC Bulletin Board under the symbol "SLPW,"
but was delisted from the OTC Bulletin Board on July 30, 2002 for failure to
file the periodic reports required by the Exchange Act. Our common stock is
currently traded in the "pink sheets" through the National Quotation Bureau. The
following table sets forth the high and low bid prices for our common stock as
reported by the OTC Bulletin Board and the National Quotation Bureau in the
periods indicated. On March 31, 2003, there were approximately 381 beneficial
holders of our common stock.



Fiscal Year              Quarter Ended             High              Low
-----------              -------------             ----              ---
2002................June 30, 2001..................$0.47............$0.16
                    September 30, 2001.............$0.37............$0.17
                    December 31, 2001..............$0.32............$0.12
                    March 31, 2002.................$0.23............$0.07

2003................June 30, 2002..................$0.10............$0.05
                    September 30, 2002.............$0.09............$0.001
                    December 31, 2002..............$0.08............$0.001
                    March 31, 2003.................$0.10............$0.01



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.



                                       12
<PAGE>
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 April 11, 2002, the Company issued 100,000 shares of its unregistered,
restricted Common Stock for services rendered to the Company. The shares were
issued in reliance on exemption from registration provided by Section 4(2) of
the Securities Act.

On April 26, 2002, the Company issued 300,208 shares of its unregistered,
restricted Common Stock to three vendors in settlement of outstanding amounts
due them. The shares were issued in reliance on exemption from registration
provided by Section 4(2) of the Securities Act.

On April 26, 2002, the Company issued 180,000 shares of its unregistered,
restricted Common Stock for termination pay to four employees. The shares were
issued in reliance on exemption from registration provided by Section 4(2) of
the Securities Act.

On June 4, 2002, the Company issued 100,000 shares of its unregistered,
restricted Common Stock for services rendered to the Company. The shares were
issued in reliance on exemption from registration provided by Section 4(2) of
the Securities Act.

On June 4, 2002, the Company issued 300,000 shares of its unregistered,
restricted Common Stock pursuant to the terms and conditions of two call options
that were exercised. The shares were issued in reliance on exemption from
registration provided by Section 4(2) of the Securities Act.

Effective January 31, 2003, the Company issued 6,000,000 shares of its
unregistered, restricted Common Stock pursuant to the terms 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 SP34E(TM), SP22A, SP22B, SP22C and SP22E refrigerant
gas products. The shares were issued in reliance on exemption from registration
provided by Section 4(2) of the Securities Act.

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 unregistered 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 shares were issued in reliance on
exemption from registration provided by Section 4(2) of the Securities Act.



                                       13
<PAGE>
ITEM 6. MANAGEMENT'S 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 developments,
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

We continue to report significant losses. However, the current trend of
increasing SOLTRON(R) product sales and the acquisition of worldwide rights to
SOLTRON(R) and SP34E(TM) provide an expectation that we will continue to reduce
our operating losses and achieve profitability in the future. Virtual
Technologies is formulating a marketing plan for the SP34E(TM) product line, but
due to limited operating capital, we do not anticipate significant sales of
these products in fiscal 2004. The past year was a year of increased financial
and operational efficiency and decreased overhead. We are currently
concentrating our focus on SOLTRON(R) by identifying additional distributors and
developing direct sales activities in new markets such as international sales,
bulk users and small generation power plant. We have not yet begun marketing
SP34E(TM) in North America since the disposition of our interest in Protocol
Resource Management, Inc., in the quarter ended March 31, 2002. Our newly
acquired subsidiary, Virtual Technologies (Australia) Pty Ltd. ("VIRTUAL
TECHNOLOGIES"), is responsible for marketing and sales of SP34E(TM) and related
refrigerant gases in Australia and New Zealand, where SP34E(TM) is produced and
Sold pursuant to a licensing agreement with A-Gas (Australia) Pty Ltd. We have
discontinued our KLEAN product line due to poor sales of these products.

RESULTS OF OPERATIONS

YEAR ENDED MARCH 31, 2003 COMPARED TO YEAR ENDED MARCH 31, 2002

Revenues for the year ended March 31, 2003 were $951,195 as compared to $488,324
for the year ended March 31, 2002. The increase in revenues of $462,871 was
attributable to an expanded customer base on SOLTRON(R) sales and the inclusion
of revenues of our wholly-owned subsidiary for the period February 1, 2003 to
March 31, 2003, which amounted to $64,593. Our cost of sales for SOLTRON(R)
decreased as a percentage of revenues due to increased revenues that were spread
over the fixed plant overhead and the amortization of plant leasehold
improvements.

General and administrative costs for the year ended March 31, 2003 were $571,401
as compared to $891,219 for the same period ended March 31, 2002, a reduction of
$319,818. The general and administrative amounts included amortization of



                                       14
<PAGE>
marketing rights of $-0- and $58,330 respectively. In addition we recorded an
impairment of an intangible asset for the year ended March 31, 2002 as a result
of management determining to write-off the balance of the SP34E(TM) North
American license due to the sale of our 50% interest in Protocol in March 2002.
The 55.6 % decrease resulted primarily from decreased administrative overhead in
the areas of compensation, consulting professional fees, amortization, interest
expense and legal, audit and accounting fees.

For the year ended March 31, 2003, we incurred a net operating loss of $109,057
or $0.003 per share compared to a net loss of $2,670,455 or $0.08 per share for
the year ended March 31, 2002. These losses contributed to net cash provided in
operating activities of $39,377 for the year ended March 31, 2003 and
utilization of $261,009 for the year ended March 31, 2002.

SEASONALITY

Sales of our SOLTRON(R) product historically have not shown a pattern of
seasonality of sales volumes. Sales of SP34E(TM) do show a pattern of
seasonality in Australia, where the majority of sales occur between October and
March. We acquired the marketing rights to SP34E(TM) in Australia in the last
quarter of our fiscal year ending March 31, 2003. We believe that the
seasonality of sales of SP34E(TM) in Australia will result in fluctuations of
our quarterly revenues in the fiscal year ending March 31, 2004.

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.

LIQUIDITY AND CAPITAL RESERVES

Product sales did provide sufficient working capital to fund our operations
during the period ended March 31, 2003. Operations provided $39,377 of cash
during this period. Additional cash was acquired with the purchase of our
wholly-owned subsidiary, which amounted to $25,026. Additional liquidity was
provided by the sale of common stock and equipment. As of March 31, 2003, we had
no commitments for capital expenditures.

PLAN OF OPERATIONS FOR FISCAL YEAR 2004

Future marketing activities will be directed towards expanding existing markets
for our SOLTRON(R) and SP34E(TM) products and penetrating new markets.
Management intends to continue its analysis of our operations with the objective
to curtail the current loss situation, we intend to continue to define our
direction, target markets and methods of distribution.



                                       15
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                                      INDEX



Report of Independent Registered Public Accounting Firm.................17

Consolidated Balance Sheets at March 31, 2003 and 2002..................18

Consolidated Statements of Operations for the Years Ended
March 31, 2003 and 2002.................................................19

Consolidated Statements of Comprehensive Loss for the Years Ended
March 31, 2003 and 2002.................................................20

Consolidated Statements of Stockholders' Equity for the Years Ended
March 31, 2003 and 2002.................................................21

Consolidated Statements of Cash Flows for the Years Ended
March 31, 2003 and 2002.................................................22



Notes to the March 31, 2003 and 2002 Financial Statements...............24



                                       16
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Solpower Corporation

We have audited the accompanying consolidated balance sheets of Solpower
Corporation and Subsidiaries as of March 31, 2003 and 2002 and the related
consolidated statements of operations, comprehensive loss, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Solpower Corporation
and Subsidiaries at March 31, 2003 and 2002, and the results of its operations,
changes in stockholders' equity and its cash flows for the years 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 11 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 & Cooper, LLP
---------------------------------
Phoenix, Arizona
November 10, 2004



                                       17
<PAGE>
                              SOLPOWER CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 2003 AND 2002
<TABLE>
<CAPTION>



                                                                       2003                   2002
                                                                   ------------           ------------
                                     ASSETS
<S>                                                                    <C>                     <C>
Current Assets:
  Cash and cash equivalents                                        $     71,790           $      3,543
  Accounts receivable                                                    60,641                 26,417
  Inventory                                                              87,346                 24,395
  Prepaid expenses                                                        6,440                  7,779
                                                                   ------------           ------------
      Total Current Assets                                              226,217                 62,134

Property & Equipment, net                                                54,250                107,844

Other Assets:
  Marketing licenses, net                                               119,700                     --
  Goodwill                                                               75,291                     --
  Receivables from related parties                                       25,666                 24,959
  Goodwill, net                                                          72,781                     --
  Other                                                                      --                 11,094
                                                                   ------------           ------------
                                                                   $    501,124           $    206,031
                                                                   ============           ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt                                $     19,513           $         --
  Vendor advances                                                        78,263                     --
  Accounts payable - trade                                              285,488                253,464
                   - related parties                                    216,197                149,665
  Customer deposits                                                          --                 50,160
  Accrued interest - related parties                                         --                 45,883
  Accrued interest                                                        7,167                 45,883
  Accrued expenses                                                      148,961                105,945
  Accrued corporate taxes                                                 4,868                     --
                                                                   ------------           ------------
      Total Current Liabilities                                         755,589                605,117

Long-Term Liabilities:
  Notes payable, less current portion                                    34,818                110,000
  Loans payable to related parties, less current portion                471,365                400,000
                                                                   ------------           ------------
      Total Liabilities                                               1,261,772              1,115,117
                                                                   ------------           ------------

Commitments and Contingencies                                                --                     --

Stockholders' Deficit:
  Preferred stock; $0.001 par value, 5,000,000 shares authorized;
   issued and outstanding, none                                              --                     --
  Common stock; $0.01 par value, 100,000,000 shares authorized;
   issued and outstanding 49,212,127 and 33,231,919, respectively       492,122                332,320
  Additional paid-in capital                                         10,712,158             10,611,689
  Accumulated deficit                                               (11,965,116)           (11,853,095)
  Foreign currency translation adjustment                                   188                     --
                                                                   ------------           ------------
      Total Stockholders' Deficit                                      (760,648)              (909,086)
                                                                   ------------           ------------
                                                                   $    501,124           $    206,031
                                                                   ============           ============

</TABLE>

               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       18
<PAGE>
                              SOLPOWER CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>


                                                          2003                   2002
                                                      ------------           ------------
<S>                                                        <C>                    <C>
Revenues:
  Fuel additive                                       $    951,195           $    488,324
  Miscellaneous                                                 --                 23,167
                                                      ------------           ------------
                                                           951,195                511,491
                                                      ------------           ------------
Cost of Sales:
  Fuel additive                                            476,879                511,826
  Miscellaneous                                                 --                    276
                                                      ------------           ------------
                                                           476,879                512,102
                                                      ------------           ------------
Gross Profit (Loss)                                        474,316                   (611)

Expenses:
  General and administrative                               568,891                891,219
  Impairment of intangible asset                             5,474              2,040,000
                                                      ------------           ------------
Operating Loss                                            (100,049)            (2,931,830)
                                                      ------------           ------------
Other Income (Expense):
  Interest income                                              804                     21
  Loss on disposition of fixed assets                       (3,752)                    --
  Costs associated with warrants issued                         --                (94,250)
  Interest expense                                         (37,854)              (182,725)
  Relief of Debt                                            31,098                126,708
                                                      ------------           ------------
      Total Other Income (Expense)                          (9,704)               (55,996)
                                                      ------------           ------------
Net Loss Before Provision for Income Taxes
 and Discontinued Operations                              (109,753)            (2,987,826)

Provision for Income Taxes                                  (2,268)                    --
                                                      ------------           ------------
Loss From Continuing Operations                           (112,021)            (2,987,826)
                                                      ------------           ------------
Discontinued Operations:
  Operating loss from discontinued operations                   --                (18,725)
  Gain on sale of discontinued operations                       --                336,096
                                                      ------------           ------------
  Income From Discontinued Operations                           --                317,371
                                                      ------------           ------------

Net Loss                                              $   (112,021)          $ (2,670,455)
                                                      ============           ============
Basic Loss Per Share:
  Loss from Operations available to stockholders
    Continuing Operations                             $         --           $      (0.09)
    Discontinuing Operations                          $         --                   0.01
                                                      ------------           ------------

Net Loss Per Share                                    $         --           $      (0.08)
                                                      ============           ============

Weighted Average Number of Common Shares Outstanding    36,114,845             32,387,974
                                                      ============           ============
</TABLE>


               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       19
<PAGE>
                              SOLPOWER CORPORATION
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002



                                                     2003               2002
                                                 -----------        -----------
Net Loss                                         $  (112,021)       $(2,670,455)

Other Comprehensive Income (Loss), Net of Tax:

  Foreign currency translation adjustment                188             (6,157)
                                                 -----------        -----------
Comprehensive Loss                               $  (111,833)       $(2,676,612)
                                                 ===========        ===========



               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       20
<PAGE>
                              SOLPOWER CORPORATION
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>


                                                                                      Additional        Common
                                                              Common Stock             Paid In          Stock
                                                          Shares        Amount         Capital        Subscribed
                                                          ------        ------         -------        ----------
<S>                                                        <C>          <C>               <C>             <C>
Balance, March 31, 2001                                31,255,064      $312,551      $10,120,179      $ 256,000
Unit subscriptions received                                    --            --               --        197,750
Common stock and warrant issued for subscriptions       1,567,500        15,675          438,075       (453,750)
Conversion of liabilities to common stock                  19,355           194               --             --
Issuance of common stock for purchase of formula           40,000           400            4,640             --
Common stock issued for services                           50,000           500            6,150             --
Conversion of short-term note payable to common stock     300,000         3,000           27,000             --
Call option issued                                             --            --           11,000             --
Increase in cumulative translation account                     --            --               --             --
Loss, year ended March 31, 2002                                --            --               --             --
                                                       ----------      --------      -----------      ---------

Balance, March 31, 2002                                33,231,919       332,320       10,611,689             --

Common stock issued for compensation and services         280,000         2,800            8,750             --
Conversion of liabilities to common stock                 400,208         4,002           30,219             --
Common stock sold by exercise of call options             300,000         3,000           12,000             --
Purchase of subsidiary with common stock                6,000,000        60,000           19,800             --
Purchase of marketing rights with common stock          9,000,000        90,000           29,700             --
Increase in cumulative translation account                     --            --               --             --
Loss, year ended March 31, 2003                                --            --               --             --
                                                       ----------      --------      -----------      ---------

Balance, March 31, 2003                                49,212,127      $492,122      $10,712,158      $      --
                                                       ==========      ========      ===========      =========

                                                                         Cumulative
                                                        Accumulated     Translation
                                                          Deficit         Account           Total
                                                          -------         -------           -----
Balance, March 31, 2001                              $ (9,182,640)      $(6,157)      $ 1,499,933
Unit subscriptions received                                    --            --           197,750
Common stock and warrant issued for subscriptions              --            --                --
Conversion of liabilities to common stock                      --            --             4,839
Issuance of common stock for purchase of formula               --            --             5,040
Common stock issued for services                               --            --             6,650
Conversion of short-term note payable to common stock          --            --            30,000
Call option issued                                             --            --            11,000
Increase in cumulative translation account                     --         6,157             6,157
Loss, year ended March 31, 2002                        (2,670,455)           --        (2,670,455)
                                                       ------------       -------       -----------

Balance, March 31, 2002                               (11,853,095)           --          (909,086)

Common stock issued for compensation and services              --            --            11,550
Conversion of liabilities to common stock                      --            --            34,221
Common stock sold by exercise of call options                  --            --            15,000
Purchase of subsidiary with common stock                       --            --            79,800
Purchase of marketing rights with common stock                 --            --           119,700
Increase in cumulative translation account                     --           188               188
Loss, year ended March 31, 2003                          (112,021)           --          (112,021)
                                                       ------------       -------       -----------

Balance, March 31, 2003                                $(11,965,116)      $   188       $(760,648)
                                                       ============       =======       ===========
</TABLE>


               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       21
<PAGE>
                              SOLPOWER CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002
<TABLE>
<CAPTION>



                                                                          2003                  2002
                                                                      -----------           -----------
<S>                                                                      <C>                     <C>
Cash Flows From Operating Activities:
  Net loss                                                            $  (112,021)          $(2,670,455)
  Income from discontinued operations                                          --               317,371
                                                                      -----------           -----------
  Net loss attributable to continuing operations                         (112,021)           (2,987,826)
  Adjustments to reconcile net loss to net cash used by
   operating activities:
     Impairment of intangible asset                                         5,474             2,040,000
     Depreciation and amortization                                         87,890               353,032
     Non-cash transactions                                                (19,548)               10,690
     Change in cumulative translation account                                 188                    --
     Net loss (gain) on sale of assets                                      3,752              (336,096)
     Changes in operating assets and liabilities:
       Accounts receivable                                                 68,360                 4,118
       Prepaid expenses                                                     1,339                (7,779)
       Inventory                                                          (62,951)              111,382
       Receivable from affiliated parties                                    (707)              (24,959)
       Accounts payable - trade                                           (21,298)              162,349
                        - related parties                                  66,532                54,204
       Customer deposits                                                  (50,160)               50,160
       Accrued expenses                                                    38,148               (33,505)
       Accrued interest - related parties                                  25,482                32,007
       Accrued interest                                                     7,167                (6,157)
       Accrued corporate taxes                                              1,730                    --
                                                                      -----------           -----------
          Net Cash Provided (Used) by Continuing Operating Activities      39,377              (578,380)

     Income from Discontinued Operations                                       --               317,371
                                                                      -----------           -----------
          Net Cash Provided (Used) by Operating Activities                 39,377              (261,009)
                                                                      -----------           -----------
Cash Flows from Investing Activities:
  Cash acquired in acquisition                                             25,026                    --
  Capital expenditures                                                    (17,172)               (5,128)
  Proceeds from sale of equipment                                          22,950                 4,300
                                                                      -----------           -----------
          Net Cash Provided (Used) by Investing Activities                 30,804                  (828)
                                                                      -----------           -----------
Cash Flows From Financing Activities:
  Proceeds from notes payable                                                  --               140,000
  Proceeds from sale of common stock, warrants and option                  15,000               114,500
  Increase in installment notes payable                                    17,413                    --
  Net vendor payments on advances                                         (31,737)                   --
  Payments on installment contracts                                        (2,610)                   --
  Payments to related parties                                                  --                (3,379)
                                                                      -----------           -----------
          Net Cash Provided (Used) by Financing Activities                 (1,934)              251,121
                                                                      -----------           -----------

Increase (Decrease) in Cash and Cash Equivalents                           68,247               (10,716)
Cash and Cash Equivalents, Beginning of Year                                3,543                14,259
                                                                      -----------           -----------

Cash and Cash Equivalents, End of Year                                $    71,790           $     3,543
                                                                      ===========           ===========
</TABLE>

               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       22
<PAGE>
                              SOLPOWER CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                   FOR THE YEARS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>


                                                          2003                 2002
                                                       -----------          -----------
<S>                                                        <C>                  <C>
SUPPLEMENTAL INFORMATION:
Cash Paid for:
  Interest                                             $        --          $    40,214
                                                       ===========          ===========
  Income taxes                                         $        --          $        --
                                                       ===========          ===========
Non-cash Investing and Financing:
  Cost associated with issue of warrants               $        --          $    94,250
                                                       ===========          ===========
  Loss on discontinued operations                      $        --          $    18,725
                                                       ===========          ===========
  Purchase of subsidiary with common stock             $    79,800          $        --
                                                       ===========          ===========
  Issuance of common stock for conversion of debt      $    34,221          $    34,839
                                                       ===========          ===========
  Purchase of world marketing rights for common stock  $   119,700          $        --
                                                       ===========          ===========
  Issuance of common stock for compensation            $    11,550          $     6,650
                                                       ===========          ===========
  Extinguishments of debt                              $   (31,098)         $  (126,708)
                                                       ===========          ===========
  Amortization of loan discount                        $        --          $    12,934
                                                       ===========          ===========
  Issuance of common stock for purchase of formula     $        --          $     5,040
                                                       ===========          ===========
</TABLE>

               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements



                                       23
<PAGE>
NOTE 1
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

                                    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 SP34E(TM), a replacement refrigerant,
and other environmentally friendly products throughout the world.

The Company has the exclusive worldwide sales, distribution, marketing and
manufacturing rights to the products, SOLTRON(R), a fuel-enhancing product and
to SP34E(TM), SP22A, SP22B, SP22C and SP22E refrigerant gas products.

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 SP34E(TM), SP22A, SP22B,
SP22C and SP22E 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. This acquisition delivers the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the product, SOLTRON(R), a
fuel-enhancing product.

SALE OF SUBSIDIARY

During the quarter ended March 31, 2002, the Company negotiated the sale of its
50% ownership of its Canadian subsidiary to PICO Holdings, Inc. ("PICO"), the
owner of the other 50% of the Canadian company. As consideration for the
Company's 50% ownership, PICO canceled a $500,000 note payable and accrued
interest due them from the Company on a Non-negotiable Promissory Note dated



                                       24
<PAGE>
August 24, 2000, and canceled and extinguished a contingent liability in the
original amount on a Non-negotiable Promissory Note dated August 28, 2000. The
referred to Notes were stamped "Canceled" by PICO and returned to the Company.

DISCONTINUANCE OF KLEAN

During the year ended March 31, 2003, the Company discontinued its KLEAN line of
products. Due to the discontinuance of the KLEAN line of products, the Company
wrote-off the unamortized balance of $5,474, which is presented in the
Consolidated Statements of Operations as Impairment of Intangible Asset for the
year ended March 31, 2003.

GOING CONCERN AND MANAGEMENT PLANS

The accompanying consolidated 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 has experienced significant losses and negative cash
flows from operations for the year ended March 31, 2003, which have resulted in
a deficiency in working capital of approximately $529,000 and an accumulated
deficit of approximately $11,965,000 as of March 31, 2003.
(See Note 11)

During the year ended March 31, 2003, the management continued to downsize the
operation and reduce operating overhead. In September 2002 the Company did not
renew its Phoenix lease at its production facility, eliminated the plant and
administrative staff and negotiated a favorable outsource program for the
production of the Company's SOLTRON(R) product line in California.

In fiscal year ended March 31, 2003, the Company began to explore the
distribution and marketing of its products through established wholesale and
retail distributors. The Company believes that this methodology will enable it
to increase revenues while cutting costs and thus increase cash flow from
operations.

                         SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated balance sheet of the Company at March 31, 2003 includes the
accounts of Solpower Corporation and Virtual Technologies (Australia) Pty Ltd.
("VIRTUAL"), a wholly-owned Australian subsidiary. The consolidated statement of
operations for the year ended March 31, 2003 includes the activity of Virtual
from the date of acquisition, January 31, 2003 through March 31, 2003. All
significant inter-company transactions and accounts have been eliminated in
consolidation. As of March 31, 2002, the Canadian subsidiary was sold and the
statements of operations for the year ended March 31, 2002 presents the
subsidiary operations as discontinued operations.

PERVASIVENESS OF ESTIMATES

The preparation of the consolidated 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.



                                       25
<PAGE>
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 fair value.

REVENUE RECOGNITION

Revenues from sales to distributors and resellers are recognized when related
products are shipped. Revenues from consignment sales are recognized when
payments are received.

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,
2003 and 2002 an allowance has been provided for uncollectible accounts
receivable in the amounts of $-0- and $-0-, respectively. The Company does not
have a formal policy to charge interest on late payments of receivable amounts.

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 years, one customer accounted for 88% and
35% of the Company revenues, respectively. The customer referred to is a major
distributor of the SOLTRON(R) product.

INVENTORY

Inventory at March 31, 2003 and 2002 consists, primarily, 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



                                       26
<PAGE>
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
Vehicles                                     5 years
Plant Equipment                              5-7 years
Leasehold Improvements                       5 years or lease term



RESEARCH AND DEVELOPMENT COSTS

All research and development costs, with the exception of capital expenditures,
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 for the years ended March 31, 2003 and 2002.

COMPREHENSIVE INCOME (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.

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.

During the year ended March 31, 2002, management determined that the costs
associated with the marketing licenses for SP34E(TM) became impaired when the
Company sold its 50% interest in its subsidiary, which manufactured the
SP34E(TM) for the Company. In addition, there has not been any significant
market penetration of SP34E(TM) in the United States. Accordingly, the Company
wrote-off the balance associated with this license at March 31, 2002. The
provision for impairment of this license amounted to $2,040,000 for the year
ended March 31, 2002.

During the year ended March 31, 2003, management determined to discontinue its
KLEAN line. As a result, the costs associated with the KLEAN rights became
impaired and the Company wrote-off the unamortized capitalized costs associated
with this product. The provision for impairment of this asset amounted to $5,474
for the year ended March 31, 2003.



                                       27
<PAGE>
GOODWILL

Goodwill represents the excess of the purchase price over the fair values of the
net assets acquired. On an ongoing basis, management reviews the valuation of
goodwill, taking into consideration any events and circumstances which might
have impaired the fair value. Goodwill is written down to the recoverable amount
when declines in value are considered to be other than temporary based upon
expected future cash flows. The subsidiary with which this asset is associated
with at March 31, 2003 was purchased on January 31, 2003 and in management's
opinion there is no impairment of the fair value at March 31, 2003.

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.

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, 2003 and
2002.

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 period. 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, 2003 and
2002 diluted net loss per common share is not included, as the effect of
including these shares is anti-dilutive.

At March 31, 2003, stock options representing 1,100,000 common shares were
outstanding with exercise prices ranging between $0.25 and $7.00. The weighted
average exercise price for all outstanding options was $1.88. At March 31, 2003,
stock warrants represented 1,567,500 common shares were outstanding with
exercise price at $0.20.

FOREIGN CURRENCY TRANSLATION

Account balances and transactions denominated in foreign currencies and the
accounts of the Corporation's foreign operations have been translated into
United States funds, as follows: (i) assets and liabilities, if any, at the
rates of exchange prevailing at the balance sheet date; (ii) revenue and
expenses at average exchange rates for the period in which the transactions
occurred; (iii) exchange gains and losses arising from foreign currency
transactions are included in the determination of net earnings for the period;
and (iv) exchange gains and losses arising from the translation of the



                                       28
<PAGE>
Corporation's foreign operations are deferred and included as a separate
component of stockholders' equity, as reflected at March 31, 2003

The Company sold its 50% owned foreign subsidiary in March 2002. The net foreign
currency translation balance at the time of the sale became a component of
determining the net gain on the sale of the subsidiary.

The Company purchased its wholly-owned Australian subsidiary on January 31, 2003
and the Foreign Currency Translation Adjustment account is presented in the
Stockholders' Equity section.

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. 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 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,
                                                                       2003               2002
                                                                 -----------        -----------
                                                                  (Unaudited)        (Unaudited)
<S>                                                                   <C>                <C>
Net loss from continuing operations, as reported                 $  (112,021)       $(2,987,826)
Deduct: Total stock-based employee compensation expense
        determined under fair value based method for all awards,
        net of related tax effects                                        --            (21,000)
                                                                 -----------        -----------
Pro forma net loss from continuing operations                       (112,021)        (3,008,826)
Income (loss) from discontinued operations                                --            317,371
                                                                 -----------        -----------
Pro forma net loss                                               $  (112,021)       $(2,691,455)
                                                                 ===========        ===========
Loss per share:
  Basic, continuing operations, as reported                      $        --        $     (0.09)
                                                                 ===========        ===========
  Basic, continuing operations, pro forma                        $        --        $     (0.09)
                                                                 ===========        ===========
  Discontinued operations, as reported                           $        --        $      0.01
                                                                 ===========        ===========
  Discontinued operations, pro forma                             $        --        $      0.01
                                                                 ===========        ===========
  Net loss per share, as reported                                $        --        $     (0.08)
                                                                 ===========        ===========
  Net loss per share, pro forma                                  $        --        $     (0.08)
                                                                 ===========        ===========
</TABLE>



                                       29
<PAGE>
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 1.3 to 5 years,
risk-free interest rates of five percent (5%), and a zero percent (0%) dividend
yield.

The full impact of calculating compensation cost for stock options under SFAS
No. 123 is not reflected in the pro forma net loss amounts presented above
because compensation cost is reflected over the vesting period

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

RECENT ACCOUNTING PRONOUNCEMENT

In November 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 151 (SFAS 151), "Inventory
Costs." SFAS 151 amends the guidance in APB No. 43, Chapter 4, "Inventory
Pricing," to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage). SFAS 151
requires that those items be recognized as current period charges regardless of
whether they meet the criteria of "so abnormal." In addition, SFAS 151 requires
that allocation of fixed production overheads to the costs of conversion be
based on the normal capacity of the production facilities. SFAS 151 is effective
for financial statements issued for fiscal years beginning after June 15, 2005.
The adoption of SFAS 151 is not expected to have a material effect on the
Company's financial position or results of operations.

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 153 (SFAS 153), "Exchanges of Nonmonetary Assets." SFAS 153 amends the
guidance in APB No. 29, "Accounting for Nonmonetary Assets." APB No. 29 was
based on the principle that exchanges of nonmonetary assets should be measured
on the fair value of the assets exchanged. AFAS 153 amends APB No. 29 to
eliminate the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. SFAS 151 is
effective for financial statements issued for fiscal years beginning after June
15, 2005. The adoption of SFAS 153 is not expected to have a material effect on
the Company's financial position or results of operations.

In December 2004, the FASB revised Statement of Financial Accounting Standards
No. 123 (SFAS 123(R)), "Accounting for Stock-Based Compensation." The SFAS 123
(R) revision established standards for the accounting for transactions in which
an entity exchanges its equity instruments for goods or services and focuses
primarily on accounting for transactions in which an entity obtains employee
services in share-based payment transactions. It does not change the accounting
guidance for share-based payment transactions with parties other than employees.
For public entitles that do not file as small business issuers, the revisions to
SFAS 123 are effective as of the beginning of the first interim or annual
reporting period that begins after June 15, 2005. For public entities that file
as small business issuers, the revisions to SFAS 123 (R) are effective as of the
beginning of the first interim or annual reporting period that begins after
December 15, 2005. For non-public entities, the revisions to SFAS 123 are


                                       30
<PAGE>
effective as of the beginning of the first annual reporting period that begins
after December 15, 2005. Management has not yet determined the effects of
adopting this statement on the Company's financial position or results of
operations.

NOTE 2
PROPERTY AND EQUIPMENT

Property and equipment consists of the following at March 31, 2003 and 2002:



                                           2003                2002
                                        ------------        ------------
Furniture and Fixtures                  $     1,586         $    52,359
Computer and Office Equipment                22,350              75,711
Plant Equipment                              55,960             170,705
Leasehold Improvements                           --             425,298
                                        ------------        ------------
                                             79,896             724,073

Less: Accumulated Depreciation              (25,646)           (616,229)
                                        ------------        ------------

                                        $    54,250         $   107,844
                                        ============        ============



Depreciation expense charged to operations for the years ended March 31, 2003
and 2002, was $82,270 and $235,479, respectively.

NOTE 3
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 cost to the Company.

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.

On June 17, 1998, the Company acquired the exclusive sales, distribution,
marketing and manufacturing rights to the Solpower product, SP34E(TM) (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 SP34E(TM) and in no event later than July 1,
2000. The Company is amortizing these marketing rights over the period of
contract.

                                       31
<PAGE>
During the year ended March 31, 2002, management determined that the costs
associated with the marketing licenses for SP34E(TM) became impaired when the
Company sold its 50% interest in its subsidiary, which manufactured the
SP34E(TM) for the Company. Accordingly, the Company wrote-off the balance
associated with these rights at March 31, 2002.

On January 31, 2003, the Company acquired the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the refrigerant gas products
consisting of SP34E(TM), SP22A, SP22B, SP22C and SP22E. This purchase was made
by the issuance of 6,000,000 shares of restricted common stock of the Company
with a valuation of $79,800.

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 with a valuation of $119,700. The effective purchase date was
February 20, 2003. This acquisition delivered the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the product, SOLTRON(R), a
fuel enhancing product.

Amortization charged to operations for marketing rights each of the years ended
March 31, 2003 and 2002 was $-0- and $58,333, respectively.

NOTE 4
ACQUISITIONS

ACQUISITION OF VIRTUAL TECHNOLOGIES (AUSTRALIA) PTY LTD.

During the year ended March 31, 2003, 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 delivers the exclusive worldwide sales, distribution, marketing and
manufacturing rights to the SP34E(TM), SP22A, SP22B, SP22C and SP22E refrigerant
gas products.

ACQUISITION OF SOLTRON(R) RIGHTS

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 with a valuation of $119,700. The effective purchase date was
February 20, 2003. This acquisition delivered the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the product, SOLTRON(R), a
fuel-enhancing product.

ACQUISITION OF PETROKLEAN FORMULA

On December 22, 2000, the Company purchased the E*COR enzyme division assets of
Perix Industries, Inc., of California. The Company issued 100,000 restricted
shares of common stock valued at $19,918 to Perix in consideration for enzyme
inventory, existing contracts and outstanding contract bids, brand names and
proprietary formula for certain of the Klean enzyme products.

                                       32
<PAGE>

On August 28, 2001, the Company purchased the formula and know-how for the
PETROKLEAN formula for 40,000 shares of restricted stock valued at $5,040.
During the year ended March 31, 2003, the Company discontinued its KLEAN line of
products and wrote off the unamortized balance of assets of $5,474. (See Note 1,
Discontinuance of KLEAN)

NOTE 5
COMMITMENTS

OPERATING LEASES

The Company did not renew their operating lease in September 2002 on their
warehouse and production facility in Phoenix, Arizona, as part of their cost
reduction program.

During the year ended March 31, 2002, the Company leased two vehicles under
thirty-six month lease agreements. The monthly rental obligation under these
agreements is $965.

Minimum future rental payments for all non-cancelable operating leases having
original or remaining lease terms in excess of one year as of March 31, 2003 are
as follows:

Year Ending
March 31,
------------
2004 $10,460

Lease expense charged to operations for the years ended March 31, 2003 and 2002,
was $72,914 and $83,172, respectively.

CONVERTIBLE PROMISSORY NOTE

On September 18, 2000, the Company issued a $400,000 Convertible Promissory Note
to Dominion Capital Pty Ltd. The note matured 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 bears 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. 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 are 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. At March 31, 2003, no payments
have been made on this obligation.

OTHER COMMITMENTS

Effective April 1, 2000, the Company entered into an unwritten employment
arrangement with James H. Hirst for an initial term of three (3) years. The
arrangement provides for a base salary of $126,000 per annum; automobile,
medical, social security allowances and such other terms and conditions as may
be agreed upon from time to time; 500,000 stock options pursuant to the terms
and conditions of the Solpower Corporation Stock Option and Incentive Plan and
such vesting requirements as established by the compensation committee; a stock

                                       33
<PAGE>
grant of 50,000 common shares effective April 1, 2000; and monthly stock grants
of 10,000 shares effective the first day of each month for the term of the
agreement, such shares to be issued quarterly provided agreed upon performance
requirements are fulfilled. A total of 130,000 common shares were issued to Mr.
Hirst during the year. On March 27, 2001, the Company agreed to Mr. Hirst
returning the shares to the Company and to carry the associated liability until
such time as Mr. Hirst requested the shares be re-issued. Effective March 31,
2001 the stock grants to Mr. Hirst ceased. (Note 9). In April 2003, Mr. Hirst
verbally extended his employment arrangement with the Company.

NOTE 6
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.

At March 31, 2003 and 2002, deferred tax assets on United States reported losses
consist of the following:



                                         2003                  2002
                                      -----------           -----------
Net operating loss carryforwards      $ 1,616,000           $ 1,632,000
Less: valuation allowance              (1,616,000)           (1,632,000)
                                      -----------           -----------

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



At March 31, 2003 and 2002, the Company had United States federal net operating
loss carry-forwards in the approximate amount of $11,484,000 and $11,372,000,
respectively, available to offset future taxable income expiring through 2023
and 2022, respectively. At March 31, 2003 and 2002, the Company had Arizona
state net operating loss carry-forwards in the approximate amount of $9,312,000
and $10,023,000, respectively, available to offset future taxable income
expiring through 2008 and 2007, respectively.

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
carryforward periods is more likely than not. Accordingly, a 100% valuation
allowance has been recorded against the net deferred tax assets.

Virtual Technologies Pty Ltd., the wholly-owned Australian subsidiary, reports
its income under Australia taxation regulations. The company has pre-tax
operating income approximating $6,900 (US) at March 31, 2003 and related accrued
taxes approximating $2,300 (US).

                                       34
<PAGE>
NOTE 7
RELATED PARTY TRANSACTIONS

On September 18, 2000, the Company issued a $400,000 Convertible Promissory Note
to Dominion Capital Pty Ltd. The note matured 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 bears 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. 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 are 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. At March 31, 2003, no payments
have been made on this obligation.

On December 20, 2000, the Company agreed to issue a total of 375,000 shares of
common stock and warrants to purchase 250,000 shares of common stock in
cancellation of debt owing to Dominion Capital, Inc. Of the shares issued,
125,000 were issued to Trond Matteson and 250,000 shares were issued to Dominion
Capital, Inc. All warrants were issued to Dominion Capital, Inc. and are
exercisable at $0.40 per share and expire on December 31, 2002. The warrants
expired, unexercised, on December 31, 2002.

Effective January 31, 2003, the Company issued 6,000,000 shares of its
unregistered, restricted common stock valued at $79,800 to Virtual Technologies
(Australia) Pty Ltd. ("VT"). VT holds the exclusive worldwide sales,
distribution, marketing and manufacturing rights to the SP34E(TM), SP22A, SP22B,
SP22C and SP22E refrigerant gas products.

On February 20, 2003, the Company acquired the worldwide rights to the product
SOLTRON(R) from Dominion Capital Pty Ltd. in exchange for 9,000,000 unregistered
restricted shares of its common stock valued at $119,700.

NOTE 8
SHAREHOLDER EQUITY

STOCK ISSUED FOR SERVICES AND DEBT

On April 1, 2001, the Company issued 19,355 restricted shares of common stock in
settlement of an outstanding account payable amounting to $4,839.

On August 28, 2001, the Company issued 50,000 restricted shares of common stock
to Mr. James Flowers pursuant to stock grants under his employment agreement.

On March 31, 2002, the Company issued 300,000 restricted shares of common stock
in relation to the conversion of a $30,000 short-term Convertible Note Payable
that was issued on January 23, 2002 and became due on February 23, 2002.

                                       35
<PAGE>

On April 11, 2002, the Company issued 100,000 restricted shares of common stock
for services.

On April 26, 2002, the Company issued 300,208 restricted shares of common stock
in settlement of outstanding account payable.

On April 26, 2002, the Company issued 180,000 restricted shares of common stock
to employees for termination pay.

On June 4, 2002, the Company issued 100,000 restricted shares of common stock
for services.

COMMON STOCK SOLD

On June 4, 2002, the Company issued 300,000 shares of its unregistered,
restricted common stock at $0.05 per share pursuant to the exercise of two
outstanding call options.

COMMON STOCK ISSUED FOR ACQUISITIONS

On August 28, 2002, the Company issued 40,000 shares of its unregistered,
restricted common stock in exchange for the formula and know-how related to its
PETROKLEAN product.

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 SP34E(TM), SP22A, SP22B, SP22C and SP22E refrigerant
gas products.

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 unregistered 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.

COMMON STOCK GRANTS

On October 26, 1998, a grant of 25,000 restricted shares under the Plan was made
to a former employee. The former employee was employed by the Company on each of
the vesting dates and is therefore vested in all shares granted. As of March 31,
2001 no shares have been issued as the result of this grant and a liability has
been recorded for the value of the shares at the vesting dates. During the year
ended March 31, 2002, the Company wrote off the liability for this stock grant
based upon subsequent management conclusions as to improper actions by this
former employee.

On April 1, 2000, subject to an employment agreement, a grant of 50,000
restricted common shares was made to James Hirst, Secretary/Treasurer. In
addition, the employment agreement provides for a grant of 10,000 restricted
shares of common stock at the first of each month, commencing May 1, 2000,
during the term of Mr. Hirst's employment. Such shares are to be issued
quarterly provided agreed upon performance requirements are fulfilled. On June

                                       36
<PAGE>

28, 2000, 70,000 restricted shares of common stock were issued to Mr. Hirst
under this agreement. On each of November 16, 2000 and January 26, 2001, 30,000
restricted shares of common stock were issued to Mr. Hirst under this agreement.
On March 27, 2001, the Company agreed to Mr. Hirst returning the 130,000 shares
to the Company and to carry the associated liability until such time as Mr.
Hirst requested the shares be re-issued. Effective March 31, 2001 the stock
grants to Mr. Hirst ceased. As of the balance sheet date, March 31, 2003 and
2002, the Company has recorded a liability for the value of the shares due Mr.
Hirst that were returned.

STOCK WARRANTS

On December 20, 2000, the Company issued a warrant to Dominion Capital, Inc., a
related party, to purchase 250,000 restricted shares of common stock at $0.40
per share and the warrant expired on December 31, 2002, unexercised.

On January 31, 2001, the Company commenced a private offering which 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 and the Board of
Directors subsequently extended the expiration date to June 30, 2005.

A summary of total stock warrants outstanding is as follows:



                                                           Weighted
                                        Number of           Average
                                        Warrants         Exercise Price
                                     --------------      --------------
Outstanding at March 31, 2001            2,250,000                0.32

Granted                                    567,500                0.20
Forfeited                               (1,000,000)              (0.43)
                                     --------------      --------------
Outstanding at March 31, 2002            1,817,500                0.23

Granted                                         --                  --
Forfeited                                 (250,000)              (0.40)
                                     --------------      --------------
Outstanding at March 31, 2003            1,567,500       $        0.20
                                     ==============      ==============

                                  37

<PAGE>

          Warrants Outstanding                    Warrants Exercisable
-----------------------------------------        ------------------------
                               Weighted
                               Average
 Exercise                     Remaining
Price Per      Number        Contractual           Number        Exercise
  Share       of Shares    Life (In Years)      Exercisable       Price
  -----       ---------    ---------------      -----------       -----
 $0.20       1,567,500          2.25             1,567,500        $0.20



STOCK OPTIONS

On November 24, 1997, an addendum to the agreement with Dominion Capital Pty
Ltd., a related entity, to provide financing (Note 8) was signed by the Company
which grants the following options to Dominion based solely on the gross sales
figures, for a five year period, of the Solpower product SOLTRON in the North
American Market as follows:



     a.   Gross sales for the product equaling $10,000,000, option to purchase
          100,000 shares of common stock at $2.50 per share, plus a cash
          performance bonus of $400,000.

     b.   Gross sales for the product equaling $20,000,000, option to purchase
          150,000 shares of common stock at $3.50 per share, plus a cash
          performance bonus of $400,000.

     c.   Gross sales for the product equaling $50,000,000, option to purchase
          250,000 shares of common stock at $4.50 per share, plus a cash
          performance bonus of $500,000.



     d.   Gross sales for the product equaling $100,000,000, option to purchase
          250,000 shares of common stock at $5.00 per share, plus a cash
          performance bonus of $1,000,000.

The contract has an anti-dilution provision, that in the event that the Company
shall at any time subdivide the outstanding shares of common stock, or shall
issue a stock dividend on its outstanding stock, the conversion price in effect
immediately prior to such subdivision or the issuance of such dividend shall be
proportionately decreased, and in the case the Company shall at any time combine
the outstanding shares of common stock, the conversion price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of such subdivision, dividend or
combination, as the case may be. No options became exercisable under this
agreement and the option agreement expired on November 24, 2002.

On January 23, 2002, the Company issued a call option for $1,000 for the option
to purchase 200,000 shares of restricted common stock at $0.15 per share. The
option expires on July 23, 2003. Effective April 26, 2002, the Company amended
the exercise price of the call option to $0.05 per share and the call option was
exercised on June 4, 2002.

On April 12, 2002 the Company issued a call option for the option to purchase
100,000 shares of restricted common stock at $0.05 per share. The option expires
on October 12, 2003. On June 4, 2002 the call option was exercised.

                                       38
<PAGE>
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, 2003, there were 5,000,000 shares reserved for options to be granted under
the Plan.

On January 30, 1998, the Company granted options to purchase shares of the
Company's common stock to certain individuals at a purchase price equal to or
greater than the fair market value of such stock as determined under the Plan as
of this date. Mr. James H. Hirst was granted 300,000, Mr. Trond Matteson was
granted 150,000 and Mr. Joshua Ward was granted 150,000 shares. The terms of
such options shall commence as of January 30, 1998, and expire on January 30,
2003, or the termination of employment of Mr. Hirst or the services of Mr.
Matteson or Mr. Ward. On May 18, 1998, Mr. Ward was terminated as a service
provider to the Company and the 150,000 options were canceled. On April 1, 2000,
under terms of an employment agreement with Mr. Hirst, the 300,000 options
granted on January 30, 1998 were canceled. On December 31, 2000, Mr. Matteson
was terminated as a service provider to the Company and the 150,000 options were
canceled.

On May 28, 1998, the Company granted options under the Plan to certain directors
at a purchase price for each share that, with the exception of the
non-qualifying options, is equal to or greater than the fair market value of
such stock as determined under the Plan as of this date. Mr. Fraser Moffat III
was granted 350,000, 100,000 of which are non-qualifying, Mr. Naoya Yoshikawa
was granted 100,000, Mr. Jerry Goddard was granted 100,000 and Mr. James H.
Hirst was granted 100,000. The options may be exercised in whole or in part at
any time after the vesting requirements with respect to any option shares has
been achieved. The terms of such options shall commence as of May 28, 1998, and
expire on May 28, 2003, or the termination as directors of the Company. On April
1, 2000, under the terms of an employment agreement with Mr. Hirst, the 100,000
options granted were canceled. On November 11, 2001, Mr. Goddard resigned as a
member of the Board of Directors and the 100,000 options granted to Mr. Goddard
were canceled. On February 4, 2003, Mr. Yoshikawa resigned as a member of the
Board of Directors and the 100,000 options granted to Mr. Yoshikawa were
canceled

On January 4, 1999, R. L. "Beau" Van Deren, the corporate Secretary/Treasurer
and a member of the Board of Directors was granted 400,000 options under the
Plan. The terms of such options commenced on January 9, 1999 and expire on
January 4, 2004 or the termination of employment of Mr. Van Deren. The terms are
similar to those options granted to other members of the board of directors in
1998. On February 15, 2000, Mr. Van Deren resigned as corporate
Secretary/Treasurer and as a member of the Board of Directors, however he
continues to provide consulting services to the Company. Consequently 250,000 of
the options granted to Mr. Van Deren were canceled and 150,000 options were
retained.

On March 1, 2000, the Company entered into an employment agreement with Mr. Mark
Robinson. The agreement provides for the issuance of 500,000 options at an
exercise price of $1.00 per share, which expire April 2006. The options vest
based on minimum market price and reported gross revenue levels. The stock
options granted to Mr. Robinson terminated effective April 30, 2001.

On April 1, 2000, the Company entered into an employment arrangement with Mr.
James Hirst. The agreement provides for cancellation of all previously issued

                                       39
<PAGE>
options and the issuance of 500,000 options at an exercise price of $1.00 per
share, which expire April 2006. The options vest based on minimum market price
and reported gross revenue levels.

On August 24, 2000, the Company granted options to purchase 250,000 shares of
the Company's common stock to Mr. James Flowers, President of Protocol Resource
Management Inc. The options vest provided the grantee is an employee of the
Corporation, its subsidiaries, and/or affiliates as of the date any vesting
requirement is achieved for the Grantee's rights in the applicable option shares
to vest. Upon the sale of Protocol to PICO Holdings, Inc., the options granted
to Mr. Flowers were terminated effective March 31, 2002.

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
aforementioned options vest independently with respect to each grantee based
upon two factors: (a) the minimum market price and (b) the minimum reported
gross revenues being achieved as illustrated in the table:

<TABLE>
<CAPTION>


                        Percent     Exercise     Market        Reported         Expiration
 Grantee                Amount        Price      Price      Gross Revenues         Date
--------------          -------       -----      -----      --------------      -----------
<S>                       <C>        <C>         <C>         <C>                       <C>
Hirst and                 20%        $1.00       $1.00       $1 million         April, 2006
Robinson                  20%        $1.00       $2.00       $2 million         April, 2006
                          20%        $1.00       $3.00       $3 million         April, 2006
                          20%        $1.00       $4.00       $4 million         April, 2006
                          20%        $1.00       $5.00       $5 million         April, 2006
Flowers                   20%        $ .55          --               --        August, 2003
                          20%        $ .55          --               --        August, 2004
                          20%        $ .55          --               --        August, 2005
                          20%        $ .55          --               --        August, 2006
                          20%        $ .55          --               --        August, 2007
Cohen, Glass,             100%       $ .25       $1.00       $1 million     September, 2004
Starita, Cesena &
Lambrechtsen
Moffat -  Incentive       40%        $3.00       $3.00       $6 million           May, 2003
                          40%        $5.00       $5.00       $9 million           May, 2003
Options                   20%        $7.00       $7.00      $12 million           May, 2003
Non-Qualifying
  Options                100%        $2.00       $2.00       $4 million           May, 2003
Yoshikawa,                50%        $3.00       $3.00       $6 million           May, 2003
 and Goddard              50%        $7.00       $7.00      $12 million           May, 2003
Van Deren                100%        $1.30       $2.00       $6 million       January, 2004

</TABLE>

The minimum reported gross revenues shall have been achieved during a reporting
period which is the lesser of (i) the four quarterly reporting periods preceding
any date on which the minimum market price exists, or (ii) that number of
quarterly reporting periods occurring subsequent to the date on which both
vesting requirements last were achieved and any date on which the next minimum
market price requirement is achieved. As of March 31, 2003, 100,000 options'
minimum vesting requirements have been met.

                                       40
<PAGE>

A summary of the option activity is as follows:



                                         Weighted
                                         Number of              Average
                                          Options            Exercise Price
                                       ------------          --------------
Outstanding at March 31, 1999            2,350,000              $  3.44
Granted                                     50,000              $  1.30
Forfeited                                 (300,000)             $ (1.98)
                                       ------------

Outstanding at March 31, 2000            2,100,000              $  3.52
Granted                                  1,250,000              $  0.91
Forfeited                                 (650,000)             $ (2.62)
                                       ------------

Outstanding at March 31, 2001            2,700,000              $  2.53
Granted                                    550,000              $  0.21
Forfeited                                 (750,000)             $ (1.45)
                                       ------------

Outstanding at March 31, 2002            2,500,000              $  2.35
Granted                                    100,000              $  0.05
Exercised                                 (300,000)             $ (0.05)
Forfeited                               (1,200,000)             $ (3.14)
                                       ------------

Outstanding at March 31, 2003            1,100,000              $  1.88
                                       ============



Additional information about outstanding options to purchase the Company's
common stock as of March 31, 2003 is as follows:



           Options Outstanding                     Options Exercisable
-------------------------------------------    ---------------------------
                                Weighted
                                Average
Exercise                       Remaining
Price Per     Number          Contractual         Number          Exercise
  Share      of Shares      Life (In Years)    Exercisable         Price
  -----      ---------      ---------------    -----------         -----
  $0.25       100,000             1.4                --            $0.25
  $1.00       500,000             3.0                --            $1.00
  $1.30       150,000              .8                --            $1.30
  $2.00       100,000              .2                --            $2.00
  $3.00       100,000              .2                --            $3.00
  $5.00       100,000              .1                --            $5.00

  $7.00        50,000              .2                --            $7.00
            ---------                            ------
            1,100,000             2.6                --               --
            =========                            ======



The stock options issued to employees have an exercise price not less than the
fair market value of the Company's common stock on the date of grant. In
accordance with accounting for such options utilizing the intrinsic value

                                       41
<PAGE>

method, there is no related compensation expense recorded in the Company's
financial statements for the years ended March 31, 2003 and 2002. Had
compensation cost for stock-based compensation been determined based on the fair
value of the options at the grant dates consistent with the method of SFAS 123,
the Company's net loss for the years ended March 31, 2003 and 2002 would have
been as presented in the pro forma amounts in Note 1. There were no employee
incentive stock options granted during the year end March 31, 2003.

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.

All supplies for the manufacture of SP34E(TM) are readily available from a
variety of manufacturers worldwide.

NOTE 11
GOING CONCERN

The accompanying consolidated 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 has experienced significant losses and negative cash
flows from operations for the year ended March 31, 2003, which have resulted in
a deficiency in working capital of approximately $529,000 as of March 31, 2003,
and an accumulated deficit of approximately $11,965,000.

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.

                                       42
<PAGE>

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

None.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

(a) Directors and Executive Officers

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



Name                            Age                Positions Held(1)
--------------------            ---             ------------------------
Fraser M. Moffat III             74             Director, Chairman
James H.  Hirst                  57             Director, President, CEO




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

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.

(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,
2003. This information is based on a review of Section 16(a) reports furnished
to Solpower.

                                       43
<PAGE>

James H. Hirst failed to timely file a report on Form 4 related to 3,000,000
shares received from Dominion Capital and a transfer of 500,000 of these shares
to his children on February 20, 2003. A Form 5 to report the delinquent filing
was also not timely filed. The required report was filed on April 29, 2005.

Peter Voss failed to timely file reports on Form 4 related to two transactions.
A Form 5 to report the delinquent filing was also not timely filed. The required
report was filed on May 5, 2005.

ITEM 10. EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for the fiscal years
ended March 31, 2003, 2002 and 2001 for the two highest paid officers. No other
person received salary or bonus in excess of $100,000 for any of these fiscal
years.

                           SUMMARY COMPENSATION TABLE



                                                                     Long Term
                                         Annual Compensation       Compensation
                                                       Other           Stock
                               Fiscal                  Annual         Options
Name and Principal Position     Year     Salary     Compensation     (Shares)
---------------------------     ----     ------     ------------     --------
Mark S. Robinson (1)            2003       --             --              --
Chief Executive Officer         2002       --             --              --
                                2001       --       $171,885 (2)     500,000 (3)

James H. Hirst                  2003       --       $130,820              --
Chief Executive Officer         2002       --       $149,248              --
 & President                    2001       --       $197,773 (4)     500,000 (3)
Secretary/Treasurer

----------


(1) Mr. Robinson resigned as a director and officer effective March 31, 2001.
(2) Includes $130,000 cash payments and $47,885 as stock grants for consulting
services.
(3) The options have not yet vested and have been allotted pursuant to an Option
Plan with requisite vesting requirements to be achieved. Mr. Robinson's options
were terminated on April 30, 2001. (4) Includes $126,000 cash payments and
$71,773 as stock grants for consulting services.

OPTION GRANTS

There were no grants of options to executive officers for the fiscal years ended
March 31, 2003 or 2002.

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, 2003.

                                       44
<PAGE>

                          AGGREGATE OPTION EXERCISES IN
               LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>


                                                                                          Value of Unexercised
                                                                Number of Unexercised     In-the-Money Options
                                                              Options at March 31, 2003     at March 31, 2003
                       Shares Acquired                              Exercisable/              Exercisable/
    Name                on Exercise         Value Realized         Unexercisable             Unexercisable
    ----                -----------         --------------         -------------             -------------
<S>                            <C>                  <C>               <C>                         <C>
James H. Hirst                 0                    0                 0/500,000                   $0/$0
</TABLE>



EMPLOYMENT AGREEMENTS

Mr. Robinson and Mr. Hirst were both at-will employees in fiscal year 2002
although we have a verbal understanding with them that their initial employment
terms would be three years each, beginning in fiscal year 2001. Base salary of
$126,000 has been set for Mr. Hirst. In addition, Mr. Hirst is to receive
options to purchase 500,000 shares at $1.00 per share, subject to vesting, and
stock grants initially of 50,000 shares and 10,000 shares per month thereafter.
The stock grants to Mr. Hirst commenced as of April 1, 2000. The option grants
were effective April 7, 2000. The stock grants to Mr. Hirst ceased effective
March 31, 2001.

Mr. Hirst continued his employment during the fiscal year ended March 31, 2003.

DIRECTOR COMPENSATION

All authorized out-of-pocket expenses incurred by our directors on behalf of
Solpower are subject to reimbursement.

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
Solpower $0.25 to $7.00 per share.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 31, 2003, 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

                                       45
<PAGE>

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)
18 Lake Avenue
Montrose, Pennsylvania                             35,826                 (3)

James H.  Hirst (2)
7309 East Stetson Drive
Scottsdale, Arizona                             2,630,100 (4)             5.3%

Naoya Yoshikawa (2)
2-16-42 Takanawa
Minato-Ku, Japan                                3,000,100                 6.1%

Power Business Co Ltd. (5)
2-16-42 Takanawa
Minato-Ku, Japan                                3,000,000                 6.1%

PICO Holdings, Inc. (6)
875 Prospect Street, Suite 301
La Jolla, California 92037                      2,500,000                 5.1%

Australian Agricultural and Property
Management Pty Ltd. (7)
c/o 13 Malcolm Court
Mt.  Waverly, Victoria 3189
Australia                                       6,146,910                12.5%

Greg Stewart
307 East 22nd Street
San Pedro, CA 90731                             2,942,000 (8)             6.0%

Peter Voss (9)(10)
39 De Havilland Road
Mordialloc 3195
Victoria, Australia                             9,531,194                19.4%

K. M. Voss (11)
39 De Havilland Road Mordialloc 3195
Victoria, Australia                             3,000,000                 6.1%

                                       46
<PAGE>

Name and Address                              Amount and Nature       Percent of
of Beneficial Owner                             of Ownership           Class (1)
-------------------                             ------------           ---------

Dominion Capital Japan Pty Ltd. (9)(10)
39 De Havilland Road
Mordialloc 3195
Victoria, Australia                             2,627,000                 5.3%

Les Woolridge (11)
Victoria
Australia                                       3,000,000                 6.1%

All Directors and Officers
as a Group (5 persons)                          3,165,926                 6.4%

----------
(1)  Based upon 49,212,127 shares of common stock being issued and outstanding
     on March 31, 2003.


(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. Mr. Moffat has been granted options
     to purchase up to 350,000 shares of common stock at prices ranging from
     $2.00 to $7.00 per share upon the market price of the common stock
     attaining certain levels. Mr. Yoshikawa has been granted options to
     purchase up to 100,000 shares of common stock at prices ranging from $3.00
     to $7.00 per share upon the market price of the common stock attaining
     certain level, these options expired on March 4, 2003. These options have
     not vested, are not exercisable until vested and are not included in the
     total above.
(3)  Less than 0.1%
(4)  Includes 130,000 shares issuable under a deferred compensation arrangement.
     Also includes 500,500 shares held by Mr. Hirst's wife. Total does not
     include 500,000 shares held by Mr. Hirst's adult children. Mr. Hirst
     disclaims all beneficial ownership of the shares held by his adult
     children.
(5)  Power Business Co Ltd is a Japanese corporation controlled by Mr.
     Yoshikawa.
(6)  PICO Holdings, Inc. is a diversified holding company listed on NASDAQ under
     trading symbol PICO. (7) Australian Agricultural Management Pty Ltd. is an
     Australian corporation controlled by Nick Corcoris. (8) Mr. Stewart
     controls Purse Seine Soma, Inc., which holds 100,000 shares. The total
     includes warrants to purchase 250,000 common shares at $0.20 per share.
(9)  Mr. Voss controls Dominion Capital Japan Pty Ltd., which holds 2,627,000
     shares, A1 Financial Planners Pty Ltd., which holds 1,140,200 shares,
     Intavest Pty Ltd., which holds 1,550,000 shares, Bio Engineering Pty Ltd.
     which holds 394,244 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.
(10) Dominion Capital Pty Ltd. 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.
(11) Ms. Voss and Mr. Woolridge were the shareholders of Virtual Technologies
     (Australia) Pty Ltd., which was acquired by Solpower in January 2003.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On November 4, 1996, we entered into an Acquisition Agreement with Dominion
Capital for the acquisition of the exclusive North American manufacturing,
distribution, marketing and sales rights SOLTRON(R). The original term of the
agreement was for five years and provided that we issue 5,000,000 shares of our
common stock, issue preferred stock and grant certain options to Dominion
Capital as consideration for these rights. On November 22, 1997 we renegotiated
the terms of the Acquisition Agreement to extend its term for an additional five
year period and eliminate the required option grants and preferred share
issuances. The amended agreement provided that options and performance bonuses

                                       47
<PAGE>
would be payable to Dominion Capital as follows: (i) upon gross revenues from
sales of SOLTRON(R) equaling $10,000,000, Dominion Capital has the option to
purchase 100,000 shares at $2.50 per share, plus a cash performance bonus of
$400,000; (ii) upon gross revenues from sales of SOLTRON(R) equaling
$20,000,000, Dominion Capital has the option to purchase 150,000 shares at $3.50
per share, plus cash performance bonus of $400,000; (iii) upon gross revenues
from sales of SOLTRON(R) equaling $50,000,000, Dominion Capital has the option
to purchase 250,000 shares at $4.50 per share, plus cash performance bonus of
$500,000; and (iv) upon gross revenues from sales of SOLTRON(R) equaling
$100,000,000, Dominion Capital has the option to purchase 250,000 shares at
$5.00 per share, plus a cash performance bonus of $1,000,000. Effective May 13,
1998 we entered into an addendum to the Acquisition Agreement in which we were
granted a right of first refusal to acquire manufacturing, distribution,
marketing and sales rights to SOLTRON(R) in all other territories (other than
Japan) where SOLTRON(R) and certain other products and services are currently
being commercialized by Dominion Capital.

On November 4, 1996, we issued 3,520,000 shares of our common stock to Dominion
Capital at a price of $0.125 per share. On April 1, 1997, we issued an
additional 4,160,000 shares of our common stock to Dominion Capital in exchange
for cancellation of advances payable to Dominion Capital in the amount of
$520,000 ($0.125 per share).

On June 17, 1998, we entered into a second Acquisition Agreement with Dominion
Capital for the acquisition of the exclusive North American manufacturing,
distribution, marketing and sales rights to SP34E(TM). We agreed to issue
6,000,000 shares of our common stock and pay a royalty of $2.25 for each
kilogram of SP34E(TM) sold in North America. The term of this Acquisition
Agreement is for five years, beginning when we achieve specified sales volumes
of SP34E(TM). We have an option to extend the term of this agreement for an
additional five years. Effective January 1, 1999, we entered into an addendum to
the Acquisition Agreement delaying the commencement of the Acquisition Agreement
until we achieve certain sales volumes of SP34E(TM), but not later than July 1,
2000.

On July 1, 1998, we entered into a Client Service Agreement with Dominion
Capital, Inc. (formerly Dominion Capital Securities, Inc.), an Arizona
corporation ("DCI"), for the provision of all of our required investor and
corporate communications services. DCI is wholly-owned by Mr. Peter Voss, who is
also one of our directors and the controlling shareholder of Dominion Capital,
our principal shareholder. The term of the agreement is renewable every six
months. For its services, DCI initially received $275,000 of which $125,000 was
paid in cash with the balance paid with 50,000 shares of our common stock. We
renewed our agreement with DCI in consideration of monthly payments of $30,000
per month for six months, payable $90,000 in cash and by issuance of 90,000
shares of common stock for services rendered through December 31, 1999. We have
agreed to make payments of $15,000 per month, payable $60,000 in cash and by
issuance of 30,000 shares of common stock for services for the period of January
2000 through June 2000. Effective December 31, 2000, we terminated the agreement
with Dominion Capital, Inc., and settled all outstanding amounts by the issuance
of 125,000 shares of common stock to Trond Matteson, an employee of Dominion
Capital, Inc.; the issuance of 250,000 shares of common stock to Dominion
Capital, Inc., and the issuance of a warrant to Dominion Capital, Inc., to buy
250,000 shares of common stock at $0.40 per share expiring on December 31, 2002.

On September 30, 1999, we issued $680,000 in 6% Convertible Notes Payable to
Dominion Capital and a total of $265,000 of these notes to two other entities
controlled by Peter Voss as consideration for prior advances and payment of

                                       48
<PAGE>
certain of our operating expenses. These notes were convertible into our common
stock at $0.50 per share and were converted to 1,950,000 shares on April 28,
2000.

On December 31, 1999, we issued a $200,000 6% Convertible Note Payable to
Dominion Capital as consideration for prior advances and payment of certain of
our operating expenses. This note was convertible into our common stock at $0.40
per share and was converted to 500,000 shares of our common stock on April 28,
2000.

On December 29, 2000, we issued 482,260 shares of common stock to Dominion
Capital and 814,294 to two other entities controlled by Mr. Peter Voss. The
shares were issued at $0.25 per share in cancellation of accounts payable for
cash advances and product purchases.

Effective January 31, 2003, the Company acquired 100% of the outstanding stock
of Virtual Technologies (Australia) Pty Ltd. As consideration for the
acquisition, the Company issued 6,000,000 shares of restricted common stock to
the shareholders of Virtual Technologies. 3,000,000 shares were issued to Les
Woolridge, the manager of Virtual Technologies, and 3,000,000 shares were issued
to K. M. Voss, the wife of Peter Voss, the controlling shareholder of Dominion
Capital Pty Ltd.

On February 20, 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 to
Dominion Capital Pty Ltd. At Dominion Capital's direction these shares were
issued as follows: 3,000,000 shares to Greg Stewart (of which 2,000,000 shares
were issued to Greg Stewart and 1,000,000 shares were issued directly to others
at Mr. Stewart's direction); 3,000,000 shares to James H. Hirst; and 3,000,000
shares to Power Business Co Ltd., an entity controlled by Naoya Yoshikawa.

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.

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.

                                       49
<PAGE>

        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.

       10.39(4) Agreement for Sale of Formula and Know-How between Stephen J.
                Kraynak and Solpower Corporation dated August 28, 2001.



        10.40   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).

        10.41   Acquisition Agreement between Solpower Corporation and Virtual
                Technologies (Australia) Pty Ltd. and Dominion Capital Pty Ltd.,
                effective January 31, 2003.*

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

        21.1    Subsidiaries

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

        32      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.

----------
* Filed Herewith

(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/A  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-QSB/A as filed on December
10, 2001.

(b) Reports on Form 8-K.

None.

                                       50
<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: December 12, 2005              By /s/ James H.  Hirst
                                      --------------------------------------
                                      James H. Hirst, Chief Executive Officer



                               BOARD OF DIRECTORS





Dated: December 12, 2005               /s/ Fraser M Moffat III
                                      ---------------------------------------
                                      Fraser M.  Moffat III, Chairman


Dated: December 12, 2005              /s/ James H.  Hirst
                                      ---------------------------------------
                                      James H.  Hirst



                                       51