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

                                   FORM 10-KSB

                                   (Mark one)

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

                    For the fiscal year ended March 31, 2005

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


                        Commission File Number: 000-29780


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

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

11555 Heron Bay Boulevard Suite 200                           33076
        Coral Springs, FL                                  (Zip Code)
(Address of principal executive offices)

                                 (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 or any
amendment to this Form 10-KSB. [ ]

Registrant's revenues for the fiscal year ended March 31, 2005 were $1,128,111.

The aggregate market value of the common stock held by non-affiliates computed
based on the closing price of such stock on March 31, 2005 was approximately
$11,653,251.

The number of shares outstanding of the registrant's classes of common stock, as
of March 31, 2005 was 69,309,727 shares. No shares of the registrant's preferred
stock were outstanding.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format (check one):  Yes___  No  _X_ .

<PAGE>

                              SOLPOWER CORPORATION

                            _ _ _ _ _ _ _ _ _ _ _ _ _
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                        INDEX TO THE FORM 10-KSB FOR THE
                        FISCAL YEAR ENDED MARCH 31, 2005

<S>                                                                     <C>
   ITEM 1.    DESCRIPTION OF BUSINESS.............................................................................1
   ITEM 2.    DESCRIPTION OF PROPERTY............................................................................11
   ITEM 3.    LEGAL PROCEEDINGS..................................................................................11
   ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................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.    CONSOLIDATED FINANCIAL STATEMENTS..................................................................18
   ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...............42
   ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT; AUDIT COMMITTEE FINANCIAL
              EXPERT; CODE OF ETHICS.............................................................................43
   ITEM 10.   EXECUTIVE COMPENSATION.............................................................................44
   ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................................46
   ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................................47
   ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K...................................................................48
   ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.............................................................49

</TABLE>
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                                     PART I

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

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

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

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

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

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

We are in the business of producing, marketing and distributing Soltron(R), a
proprietary enzyme-based fuel enhancing product and SP34E(TM), an ozone safe
alternative refrigerant. Our business plan contemplates distributing these
products on a worldwide basis.

Solpower was originally incorporated in Utah in 1982 as Dynafuel Corporation and
our original business involved research and development of an experimental fuel
using alcohol and other chemicals in a proprietary combination to produce a


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

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

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

PRODUCTS

We market and distribute Soltron(R), a proprietary enzyme-based fuel enhancing
product and license the production and distribution of SP34E(TM), an ozone safe
alternative refrigerant. We currently distribute these products primarily
through sales channels in the United States, Central America, American Samoa,
Europe and Australia.

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

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

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. Through our subsidiary,
Virtual Technologies Pty Ltd., we currently market and sell SP34E(TM) in Japan,
Australia, New Zealand and other Pacific 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, SP-AUTO, a specific version of
SP34E(TM), 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. SP34E(TM) has been listed by the U.S. Environmental Protection
Agency under its Significant New Alternatives Program ("SNAP"), as an acceptable
alternative to ozone-depleting substances.

SUPPLIERS

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

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.

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

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

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

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. We market SP34E(TM) as 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, and are in the
process of formulating a marketing plan to reintroduce the product in the United
States, and our subsidiary, Virtual Technologies (Australia) Pty Ltd. ("Virtual
Technologies"), is responsible for marketing and sales of SP34E(TM) and related
refrigerant gases worldwide. In Australia and New Zealand, SP34E(TM) is produced
and sold pursuant to a licensing agreement with A-Gas (Australia) Pty Ltd.
("A-Gas"). Pursuant to that agreement, dated November 28, 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

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Technologies leased certain plant and equipment necessary 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 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. On February 20, 2003,
we acquired the exclusive worldwide manufacturing, distribution, marketing and
sales rights to Soltron(R) pursuant to an Acquisition Agreement with Dominion
Capital, under which we issued 9,000,000 shares of our restricted common stock.
Under that agreement, we obtained exclusive rights to Soltron(R) for a period of
twenty years, with an option to renew for an additional twenty years, subject to
termination for good cause.

SP34E(TM). In June 1998, we acquired the exclusive rights to produce, market and
distribute SP34E(TM) in North America through an agreement with Dominion Capital
in consideration for 6,000,000 shares of our common stock and the payment to
Dominion Capital of a royalty of $2.25 per kilogram (subsequently amended to
2.5% of gross sales) of SP34E(TM) that we sell. The term of the agreement
commenced on July 1, 2000, continues for five years and was renewable for an
additional five years at our option. On January 31, 2003, we acquired the
outstanding shares of Virtual Technologies for 6,000,000 shares of our
restricted common stock. As a result of this acquisition, we gained the
exclusive, worldwide manufacturing, distribution, marketing and sales rights to
SP34E(TM) and the related refrigerant gas products, SP22E-A, SP22E-B and
SP22E-C. This acquisition terminated the aforementioned royalty obligation of
2.5% of gross SP34E(TM) sales. 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.

                                       5
<PAGE>
COMPETITION

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

Some products already in the marketplace that may compete directly with
Soltron(R) include STP(R) Gas Treatment, STP(R) Diesel Treatment and STP(R)
Smoke Treatment (all produced by First Brands Corporation), Lucas Oil Fuel
Treatment (produced by Lucas Oil Products, Inc.), Slick 50(R) (produced by Slick
50 Products Corporation), Valvtect(R) Dieselguard (produced by Valvtect
Petroleum Products Corp.) and Fuelon(R) (produced by Fuelon International,
Inc.). These fuel additives make similar claims of performance benefits but are
based upon older conventional chemical technologies. We believe Soltron(R) is
the only enzyme-based fuel technology currently on the market, and we believe it
offers a greater range of benefits at a lower cost than our competitor's
conventional chemical additives. Based on Soltron(R)'s penetration in the West
Coast recreational marine industry, we believe we can differentiate Soltron(R)
from our competitors' products, successfully compete with them and penetrate
additional fuel additive markets. See "DESCRIPTION OF BUSINESS-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 not currently marketing SP34E(TM) in the United States, but
our subsidiary, Virtual Technologies, is developing a plan for marketing
SP34E(TM) throughout the world, including in the United States.

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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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.

EMPLOYEES

At March 31, 2005, 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 two employees.

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, through Virtual Technologies, we
are formulating a new marketing plan for SP34E(TM) in the United States and
elsewhere throughout the world.

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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 distributors with established distribution channels 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 MARKET ACCEPTANCE OF PRODUCTS, LIMITED MARKETING EXPERIENCE. We
are still in the early stages of marketing Soltron(R) and SP34E(TM). As is
typical with new products, demand and market acceptance for our products is
subject to a high 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.

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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 enzymes needed to produce
Soltron(R) in volumes sufficient to meet demand will also affect our ability to
produce this product. Failure to adequately supply products to distributors and
retailers or of any of our suppliers to produce sufficient materials to meet our
demand would materially adversely impact our operations.

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

RELIANCE ON MANAGEMENT; LIMITED PERSONNEL. Attracting and retaining qualified
personnel is critical to our business plan. In particular, our success is highly
dependent on the services of our Chief Executive Officer, James H. Hirst. There
can be no assurance that we will be able to retain 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

                                       9
<PAGE>
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
adequately protect our trade secrets or that other companies will not acquire
information that we consider proprietary.

PRODUCT ACQUISITION AGREEMENT. We own the worldwide rights to manufacture and
distribute Soltron(R) 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.

                                       10
<PAGE>
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 STOCKHOLDERS/FOREIGN STOCKHOLDERS. Our principal
stockholder, formerly Dominion Capital, and now Australian Agricultural
Management Pty Ltd., and its affiliates own or control a substantial block of
our outstanding common stock. Accordingly, these stockholders, acting together,
would be able to effectively control matters requiring approval by our
stockholders, including the election of our board of directors and approval of
certain significant transactions. Australian Agriculture Management Pty Ltd. is
domiciled in Australia and if we, or our stockholders, were to bring legal
action against it, its domicile in a foreign country may prevent it from being
subject to jurisdiction of a United States court. While we or our shareholders
may be able to proceed against these entities in an Australian court, such
actions may be prohibitively expensive and an Australian court may not recognize
claims or provide remedies similar to those available in United States courts.

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.

ITEM 2.  DESCRIPTION OF PROPERTY

Until March 31,2005, we leased our corporate offices and warehouse space in San
Pedro, California pursuant to a month-to-month lease, for which we paid rent of
$1,050 per month. Beginning in April 2005 we moved the corporate offices to
Coral Springs, Florida, and signed a twelve-month lease at $843 per month.

ITEM 3.  LEGAL PROCEEDINGS

We have in the past involved been 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.

                                       11
<PAGE>
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 is traded on the Bulletin Board Pink Sheets under the symbol
"SLPW.PK." The following table sets forth the quarterly high and low bid prices
per share for the common stock, as reported by the Bulletin Board Pink Sheets
for the fiscal years indicated. On March 31, 2005, there were approximately 400
beneficial holders of our common stock.


    Fiscal Year         Quarter Ended                  High             Low

    2004................June 30, 2003..................$  0.08...........$  0.01
                        September 30, 2003.............$  0.08...........$  0.01
                        December 31, 2003..............$  0.15...........$  0.03
                        March 31, 2004.................$  0.12...........$ 0.001

    2005................June 30, 2004..................$  0.25...........$  0.03
                        September 30, 2004.............$ 0.175...........$  0.05
                        December 31, 2004..............$  0.12...........$  0.02
                        March 31, 2005.................$  0.40...........$  0.05

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

DIVIDEND POLICY

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

RECENT UNREGISTERED STOCK ISSUANCES AND OPTIONS

On April 15, 2004, the Company issued 2,000,000 restricted shares of common
stock at $0.05 per share for consulting services. The issuance of these shares
was exempt from registration pursuant to Section 4(2) under the Securities Act
of 1933, as amended (the "Securities Act").

On April 20, 2004, the Company issued 800,000 restricted shares of common stock
at $0.03 per share in settlement of an outstanding account payable. The issuance
of these shares was exempt from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended (the "Securities Act").

                                       12
<PAGE>
On April 20, 2004, the Company issued 600,000 shares of restricted common stock
at $0.05 per share pursuant to the sale of common stock in a private placement.
The issuance of these shares was exempt from registration pursuant to Section
4(2) under the Securities Act of 1933, as amended (the "Securities Act").

On May 25, 2004, the Company issued 1,000,000 shares of restricted common stock
at $0.066 per share pursuant to the sale of common stock in a private placement.
The issuance of these shares was exempt from registration pursuant to Section
4(2) under the Securities Act of 1933, as amended (the "Securities Act").

On June 1, 2004, The Company issued 1,000,000 call options for an aggregate
consideration amount of $15,000. The call options are exercisable for a three
year period and at an exercise price $0.15 a share. The issuance of these shares
was exempt from registration pursuant to Section 4(2) under the Securities Act
of 1933, as amended (the "Securities Act").

On July 7, 2004, the Company issued 400,000 shares of restricted common stock at
$0.05 per share pursuant to the sale of common stock in a private placement. The
issuance of these shares was exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933, as amended (the "Securities Act").

On July 7, 2004, the Company issued 500,000 shares of restricted common stock at
$0.066 per share pursuant to the sale of common stock in a private placement.
The issuance of these shares was exempt from registration pursuant to Section
4(2) under the Securities Act of 1933, as amended (the "Securities Act").

On July 24, 2004, the Company issued 260,000 restricted shares of common stock
at $0.10 per share in settlement of an outstanding account payable. The issuance
of these shares was exempt from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended (the "Securities Act").

On September 13, 2004, the Company issued 425,000 restricted shares of common
stock for services at $0.15 per share, as provided for under an agreement. The
issuance of these shares was exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933, as amended (the "Securities Act").

On October 1, 2004, the Company issued 120,000 restricted shares of common stock
at $0.15 per share in settlement of an outstanding account payable. The issuance
of these shares was exempt from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended (the "Securities Act").

On November 11, 2004, the Company issued 383,333 shares of restricted common
stock at $0.11 per share pursuant to the sale of common stock in a private
placement. The issuance of these shares was exempt from registration pursuant to
Section 4(2) under the Securities Act of 1933, as amended (the "Securities
Act").

                                       13
<PAGE>
On November 30, 2004, the Company issued 42,166 restricted shares of common
stock at $0.05 per share for services. The issuance of these shares was exempt
from registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended (the "Securities Act").

On January 18, 2005, the Company issued 11,000,000 restricted shares of common
stock at $0.0474 per share in settlement of a delinquent note payable and
accrued interest to a related party. The issuance of these shares was exempt
from registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended (the "Securities Act").

On February 5 2005, the Company issued 500,000 shares of restricted common stock
at $0.05 per share pursuant to the sale of common stock in a private placement.
The issuance of these shares was exempt from registration pursuant to Section
4(2) under the Securities Act of 1933, as amended (the "Securities Act").

On February 9, 2005, the Company issued 9,434 restricted shares of common stock
at $0.31 per share for services. The issuance of these shares was exempt from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended (the "Securities Act").

On February 9, 2005, the Company issued 162,500 restricted shares of common
stock for services at $0.15 per share, as provided for under an agreement. The
issuance of these shares was exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933, as amended (the "Securities Act").

On March 9,2005, the Company issued 132,667 shares of restricted common stock at
$0.11 per share pursuant to the sale of common stock in a private placement. The
issuance of these shares was exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933, as amended (the "Securities Act").

On March 25, 2005, the Company issued 62,500 restricted shares of common stock
for services at $0.15 per share, as provided for under an agreement. The
issuance of these shares was exempt from registration pursuant to Section 4(2)
under the Securities Act of 1933, as amended (the "Securities Act").

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.

                                       14
<PAGE>
We undertake no obligation and do not intend to update, revise or otherwise
publicly release the result of any revisions to forward-looking statements that
may be made to reflect future events or circumstances.

INTRODUCTION

Although we continue to report significant losses, the current trend of
increasing Soltron(R) product sales, together with the consolidation of income
from our wholly-owned subsidiary, Virtual Technologies Pty Ltd., gives us an
expectation that we will continue to reduce our operating losses. Virtual
Technologies is currently developing a marketing a plan of action and marketing
implementation strategy for the SP34E(TM) product line for the fiscal year 2006.
Because of limited operating capital, we were not able to finalize the
deployment strategy during the fiscal year ended March 31, 2005. Based upon an
annual consolidated gross revenue increase of $438,523 for the current fiscal
year as compared to the prior fiscal year, we are optimistic that we can
continue the trend for increased sales as we implement new marketing strategies
for our product lines in fiscal year 2006. During the year ended March 31, 2005,
management continued to maintain operational efficiency with a minimum of
administrative overhead. We currently are concentrating our focus on the
Soltron(R) product line by identifying additional distributors and developing
direct sales activities in new markets such as international sales, bulk users,
small generation power plants and commercial uses in metropolitan city fleets.
Virtual Technologies will continue to concentrate its efforts on SP34E(TM) sales
in Australia and develop new international markets.

During our fiscal years ended March 31, 2005 and 2004, we have continued to be
in the middle stages of being a development company, seeking to ascertain the
appropriate mix of products for future marketing and distribution. We continue
to explore distribution and marketing of our products through established
distributors, both wholesale and retail. Through this methodology we attempt to
cut costs, increase revenue and increase profits. As a result of utilizing
established distributors, we believe we may penetrate our product channels in a
more effective manner and at a lower cost that will result in increased
revenues, profits and cash flow as this methodology of distributors penetrate
the markets and sell to end users of our products. We intend to seek listing on
the OTC Bulletin Board, which may provide a better ability to attract investors.
We are in process of completing our Securities Act filings to enable our listing
for trading on the OTC Bulletin Board. We intend to raise capital to provide
working capital and to expand our present business segments. We also have
outstanding warrants and stock options that, if converted, will provide cash
flow for working capital.

CRITICAL ACCOUNTING POLICIES

Our consolidated audited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America,
which require us to make estimates and judgments that significantly affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements. Note 1, "Significant Accounting Policies" in the Notes to
the Consolidated Financial Statements in our Form10-KSB describes our
significant accounting policies which are reviewed by management on a regular
basis.

                                       15
<PAGE>
An accounting policy is deemed by us as critical if it requires an accounting
estimate to be made based on assumptions about matters that are uncertain at the
time the estimate is made, and if different estimates that reasonably could have
been used, or changes in the accounting estimates that are reasonable likely to
occur periodically, could materially impact the financial statements. The
policies and estimates that we believe are most critical to the preparation of
our consolidated financial statements and that require a higher degree of
judgment are:

     Valuation of goodwill;

     Stock-based compensation; and

Valuation of extended warrants under the Black Scholes option-pricing model.

RESULTS OF OPERATIONS

Year Ended March 31, 2005 Compared to Year Ended March 31, 2004

Consolidated revenues for the year ended March 31, 2005 were $1,128,111 as
compared to $689,588 for the year ended March 31, 2004. The increase in revenues
of $438,523 was mainly attributable to increased Soltron(R) sales amounting to
$410,453 in the United States. The balance of the increase of $28,070 resulted
from increased in the SP34E(TM) sales from our wholly owned subsidiary.

Consolidated gross profit decreased from 61.7% for the year ended March 31, 2004
to 56.3% for the year ended March 31, 2005. This decrease in consolidated gross
profit percentage of 5.4% is mainly due to a lower gross profit margin attained
on the SP34E(TM) revenue for the year ended March 31,2005. The gross profit from
this segment decreased from 65.5% for the prior year ended to 55.8% for the
current year ended, or 9.7%. The SP34E(TM) segment also generated 56.3% of the
total gross profit for the year ended March 31, 2004 as compared to 34.6% for
the year ended March 31, 2005. The decrease in the gross profit from SP34E(TM)
is mainly attributable to increased cost of production. The total consolidated
gross profit earned for the year ended March 31, 2005 increased $209,897 to
$635,231 as compared to $425,334 for the year ended March 31, 2004. This
increase is attributable to the increase in sales of the Soltron(R).

Consolidated general and administrative costs for the year ended March 31, 2005
were $980,553 as compared to $885,949 for the same period ended March 31, 2004,
or an increase of $94,604. This increase is attributable to increased costs
incurred in Soltron(R). This increase is comprised mainly of increased sales
commissions, investor relations, private placement and SEC legal and accounting
professional fee costs approximating $303,483. This increase was offset by
decreases in consulting fees, amortization and write down of intangibles, bad
debt write-offs, group insurance, marketing and office rent costs approximating
$215,723.

Consolidated other expense increased $670,939 during the current year ended
March 31, 2005, as compared to the year ended March 31, 2004. This increase is
mainly comprised of costs associated with the beneficial conversion of debt and
issuance of call options.

For the year ended March 31, 2005, we incurred a consolidated net loss of
$1,036,355 or $0.02 per share as compared to a net loss of $485,296 or $0.01 per
share for the year ended March 31, 2004. The increased loss of $551,059 for the
current year ended is attributable solely to the increase in other expenses
incurred.

                                       16
<PAGE>
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 year ended March 31, 2005. Operations utilized $144,656 of cash
during the year. Additional liquidity was provided by the sale of common stock
and proceeds from granted call options. During this same period for the previous
reporting period, $223,297 was utilized by operations and was offset by proceeds
from notes payable, common stock subscriptions, and advances from a major
customer. As of March 31, 2005, we had no commitments for capital expenditures

To date we have been financing our business through loans from our main
distributor and principal shareholder, sales of common stock, and revenue
derived from sales of our products. Furthermore, in July 2005, our main
distributor exercised warrants yielding the Company an additional $150,000 in
cash. We believe because of increased sales and an increase in distributors, we
should be able to utilize cash flow to finance our business for another year
without the need for raising further monies. If we do not continue our trend of
increased sales nor have the ability to raise additional cash, then we may have
to consider curtailing or shutting down our current operations.

                                       17
<PAGE>


ITEM 7.  CONSOLIDATED FINANCIAL STATEMENTS

                                      INDEX
<TABLE>
<CAPTION>
<S>                                                                                                               <C>
         Report of Independent Registered Public Accounting Firm...................................................19

         Consolidated Balance Sheets at March 31, 2005 and 2004....................................................20

         Consolidated Statements of Operations for the Years Ended
         March 31, 2005 and 2004...................................................................................21

         Consolidated Statements of Comprehensive Loss for the Years Ended
         March 31, 2005 and 2004...................................................................................22

         Consolidated Statements of Stockholders' Deficit for the Years Ended
         March 31, 2005 and 2004...................................................................................23

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 2005 and 2004...................................................................................25

         Notes to the March 31, 2005 and 2004
         Consolidated Financial Statements.........................................................................27
</TABLE>
                                       18


<PAGE>
             Report of Independent Registered Public Accounting Firm



Board of Directors and Stockholders
Solpower Corporation


We have audited the accompanying consolidated balance sheets of Solpower
Corporation as of March 31, 2005 and 2004 and the related consolidated
statements of operations, comprehensive loss, stockholders' deficit, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Solpower Corporation
at March 31, 2005 and 2004, and the results of its operations 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 9 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
September 6, 2005


                                       19
<PAGE>
                              SOLPOWER CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 2005 and 2004
<TABLE>
<CAPTION>

                                     ASSETS
                                                                                             2005               2004
                                                                                        ---------------     --------------
<S>                                                                                         <C>                 <C>
Current Assets:
       Cash and cash equivalents                                                            $   97,371          $  96,487
       Accounts receivable                                                                     228,214            142,379
       Inventory                                                                                97,260            131,045
       Prepaid expenses                                                                         63,686              5,030
                                                                                        ---------------     --------------
                     Total Current Assets                                                      486,531            374,941

Property & Equipment, net                                                                       52,186             63,081


Other Assets:
       Deposit                                                                                     750                  -
       Intangibles, net                                                                          2,821                  -
       Goodwill                                                                                 75,291             75,291
                                                                                        ---------------     --------------
                     Total Assets                                                           $  617,579         $  513,313
                                                                                        ===============     ==============

                                         LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
       Current portion of long-term debt                                                     $  16,888         $   31,622
       Customer advances                                                                       287,253            351,030
       Accounts payable - trade                                                                334,417            347,801
       Accounts payable - related parties                                                      227,556            267,716
       Accrued interest - related party                                                              -             30,800
       Accrued expenses                                                                        249,587            169,436
                                                                                        ---------------     --------------
                     Total Current Liabilities                                               1,115,701          1,198,405

Long-Term Liabilities:
       Notes payable, less current portion                                                           -             12,267
       Loans payable to related party                                                                -            471,365
                                                                                        ---------------     --------------
                     Total Liabilities                                                       1,115,701          1,682,037
                                                                                        ---------------     --------------
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 69,309,727 and 50,912,127, respectively                       693,097            509,122
       Additional paid-in capital                                                           12,293,125         10,764,858
       Common stock subscribed                                                                       -              5,000
       Accumulated deficit                                                                 (13,486,767)       (12,450,412)
       Foreign currency translation adjustment                                                   2,423              2,708
                                                                                        ---------------     --------------
                     Total Stockholders' Deficit                                              (498,122)        (1,168,724)
                                                                                        ---------------     --------------
                     Total Liabilities and Stockholders' Deficit                            $  617,579          $ 513,313
                                                                                        ===============     ==============


 The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>

                                       20

<PAGE>
                              SOLPOWER CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED MARCH 31, 2005 and 2004
<TABLE>
<CAPTION>

                                                                                 2005                2004
                                                                            ---------------     ---------------
<S>                                                                            <C>                   <C>
Net Revenues                                                                   $ 1,128,111           $ 689,588

Cost of Revenues                                                                   492,880             264,254
                                                                            ---------------     ---------------

Gross Profit                                                                       635,231             425,334

Expenses
     General and administrative                                                    980,553             766,249
     Impairment of intangible asset                                                      -             119,700
                                                                            ---------------     ---------------
Operating Loss                                                                    (345,322)           (460,615)
                                                                            ---------------     ---------------

Other Income (Expense):
     Debt conversion expense                                                      (607,930)                  -
     Costs associated with call options issued                                     (63,000)                  -
     Interest income                                                                   438                   1
     Miscellaneous income - other                                                    1,359                   -
     Gain on disposition of fixed asset                                                551                   -
     Interest expense                                                              (22,451)            (29,780)
     Relief of debt                                                                      -               9,685
                                                                            ---------------     ---------------
         Total Other Income (Expense)                                             (691,033)            (20,094)
                                                                            ---------------     ---------------

Net Loss Before Provision for Income Taxes                                      (1,036,355)           (480,709)

Provision for Income Taxes - Subsidiary                                                  -              (4,587)
                                                                            ---------------     ---------------

Net Loss                                                                     $  (1,036,355)         $ (485,296)
                                                                            ===============     ===============
Basic and Diluted Loss Per Share:                                                   $(0.02)             $(0.01)
                                                                            ===============     ===============
Weighted Average Number
      of Common Shares Outstanding                                              58,632,252          50,103,930
                                                                            ===============     ===============

 The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>
                                       21
<PAGE>

                              SOLPOWER CORPORATION
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                   FOR THE YEARS ENDED MARCH 31, 2005 and 2004

<TABLE>
<CAPTION>

                                                              2005                 2004
                                                       -----------------     ---------------
<S>                                                         <C>                  <C>
Net Loss                                                    $(1,036,355)         $ (485,296)

Other Comprehensive Income (Loss), Net of Tax:
   Foreign currency translation adjustment                         (285)              2,520
                                                        -----------------     ---------------

Comprehensive Loss                                         $ (1,036,640)         $ (482,776)
                                                        =================     ===============

 The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>


                                       22
<PAGE>

                              SOLPOWER CORPORATION
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)
                   FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  Additional    Common       Cumulative
                                           Common Stock             Paid In      Stock      Accumulated   Translation
                                        Shares       Amount        Capital      Subscribed     Deficit       Account        Total
                                    -------------  ----------- -------------- ------------ ------------- ------------  -------------
<S>                <C>                 <C>          <C>         <C>            <C>         <C>                  <C>       <C>
Balance, March 31, 2003                49,212,127   $492,122   $10,712,158     $        -  $(11,965,116)        $ 188     $(760,648)

Issuance of restricted stock
   at $0.041 per share for
   marketing and consulting
   services                             1,700,000     17,000        52,700              -             -             -        69,700
Stock subscriptions received                    -          -             -          5,000             -             -         5,000
Change in translation account                   -          -             -              -             -         2,520         2,520
Loss, year ended March 31, 2004                 -          -             -              -      (485,296)            -      (485,296)
                                    -------------  ----------- -------------- ------------ ------------- ------------  -------------
Balance, March 31, 2004                50,912,127    509,122    10,764,858          5,000   (12,450,412)        2,708    (1,168,724)


Issuance of restricted stock at
    $0.05 per share
    for consulting services             2,042,166     20,422        81,686                            -             -       102,108
Issuance of restricted stock at
    $0.05 per share pursuant a
    private placements of securities    1,500,000     15,000        60,000         (5,000)            -             -        70,000
Issuance of restricted stock at $0.03
    per share in settlement of an
    accounts payable                      800,000      8,000        16,000              -             -             -        24,000
Issuance of restricted stock at $0.066
    per share pursuant a private
    placements of securities            1,500,000     15,000        84,000              -             -             -        99,000
Proceeds received from issuance call
    options                                     -          -        15,000              -             -             -        15,000
Costs associated with issuance of
    call options to non-employees               -          -        63,000              -             -             -        63,000
Employee stock-based compensation on
    call options granted to employees           -          -         4,000              -             -             -         4,000
Issuance of restricted stock at $0.10
    per share in settlement of an
    accounts payable                      260,000      2,600        23,400              -             -             -        26,000
Issuance of restricted stock at $0.15
    per share for services, pursuant
    to agreement                          650,000      6,500        91,000              -             -             -        97,500
Issuance of restricted stock at $0.15
    per share in settlement of an
    accounts payable                      120,000      1,200        16,800              -             -             -        18,000


 The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>
                                       23
<PAGE>
                              SOLPOWER CORPORATION
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)
                   FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

<TABLE>
<CAPTION>

                                                                   Additional    Common       Cumulative
                                            Common Stock             Paid In      Stock      Accumulated   Translation
                                         Shares       Amount        Capital      Subscribed     Deficit       Account        Total
                                      -------------  ----------- -------------- ------------ ------------- ------------ ------------
<S>                                        <C>           <C>            <C>        <C>           <C>            <C>           <C>
Issuance of restricted stock at $0.11
    per share pursuant a private
    placements of securities               516,000       5,159          51,601            -             -            -       56,760
Issuance of restricted stock at $0.31
    per share for consulting services        9,434          94           2,831            -             -            -        2,925
Induced conversion of note payable and
    accrued interest to a related party
    at $0.0474 per share including
    expense of $607,930                 11,000,000     110,000       1,018,949            -             -            -    1,128,949
Change in translation account                                                                                     (285)        (285)
Operating loss for the year ended
    March 31, 2005                               -           -               -            -    (1,036,355)           -   (1,036,355)
                                      -------------  ----------- -------------- ------------ ------------- ------------  -----------
Balance, March 31, 2005                 69,309,727   $ 693,097     $12,293,125      $     -  $(13,486,767)  $    2,423   $ (498,122)
                                      -------------  ----------- -------------- ------------ ------------- ------------  -----------

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>
                                       24
<PAGE>


                                            SOLPOWER CORPORATION
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                FOR THE YEARS ENDED MARCH 31, 2005 AND 2004
<TABLE>
<CAPTION>

                                                                                2005               2004
                                                                            --------------     --------------
<S>                                                                              <C>                 <C>
Cash Flows From Operating Activities:
      Net loss                                                                ($1,036,355)        $ (485,296)

      Adjustments to reconcile net loss to net cash provided (used) by
      operating activities:
          Impairment of intangible asset                                                -            119,700
          Depreciation and amortization                                            12,782             13,020
          Gain on disposition of fixed asset                                         (551)                 -
          Non-cash transactions                                                   964,317             92,584
          Changes in operating assets and liabilities:
              Accounts receivable                                                 (85,835)           (87,112)
              Prepaid expenses                                                    (58,656)             1,410
              Inventory                                                            33,785            (43,699)
              Receivable from related parties                                           -             (1,529)
              Deposit                                                                (750)                 -
              Accounts payable - trade                                            (13,384)            71,998
                     - related parties                                            (40,160)            51,519
              Accrued expenses                                                     80,151             20,475
              Accrued interest - related party                                          -             23,633
                                                                            --------------     --------------
                 Net Cash (Used) from Operating Activities                       (144,656)          (223,297)
                                                                            --------------     --------------

Cash Flows from Investing Activities:
      Capital expenditures                                                         (5,358)           (21,851)
      Proceeds from disposition of fixed asset                                      4,157                  -
      Intangibles                                                                  (2,956)                 -
                                                                            --------------     --------------
                 Net Cash  (Used) from Investing Activities                        (4,157)           (21,851)
                                                                            --------------     --------------

Cash Flows From Financing Activities:
      Proceeds from sale of common stock and call options                         240,760                  -
      Proceeds from stock subscriptions                                                 -              5,000
      Increase in installment notes payable                                             -             20,142
      Net customer increase (decrease) on advances                                (63,777)           272,767
      Payments on installment notes payable                                       (27,001)           (30,584)
                                                                            --------------     --------------
                 Net Cash Provided (Used) from Financing Activities               149,982            267,325
                                                                            --------------     --------------

Effect of Exchange Rate Changes on Cash                                              (285)             2,520
                                                                            --------------     --------------

Increase in Cash and Cash Equivalents                                                 884             24,697
Cash and Cash Equivalents, Beginning of Year                                       96,487             71,790
                                                                            --------------     --------------
Cash and Cash Equivalents, End of Year                                           $ 97,371           $ 96,487
                                                                            ==============     ==============

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>
                                       25
<PAGE>


                              SOLPOWER CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                   FOR THE YEARS ENDED MARCH 31, 2005 AND 2004

<TABLE>
<CAPTION>

                                                                                2005                2004
                                                                            --------------     ---------------
<S>                                                                                <C>                 <C>
SUPPLEMENTAL INFORMATION:
Cash Paid for:
     Interest                                                                    $      -           $      -
                                                                                 --------           --------
     Income taxes                                                                $      -           $      -
                                                                                 --------           --------
Non-cash Investing and Financing:
     Relief of debt                                                              $      -           $ (9,685)
                                                                                 --------           --------
     Write off receivables from related parties                                  $      -           $ 32,569
                                                                                 --------           --------
     Non-cash interest expense                                                   $ 18,854           $      -
                                                                                 --------           --------
     Stock issued for services                                                   $202,533           $      -
                                                                                 --------           --------
     Issuance of common stock for compensation                                   $      -           $ 69,700
                                                                                 --------           --------
     Employee stock-based compensation                                           $  4,000           $      -
                                                                                 --------           --------
     Cost associated with call options issued                                    $ 63,000           $      -
                                                                                 --------           --------
     Debt conversion expense                                                     $607,930           $      -
                                                                                 --------           --------
     Stock issued for induced conversion of note payable and accrued
         interest - related party                                                $502,165           $      -
                                                                                 --------           --------
     Stock issued for conversion of accounts payable                             $ 68,000           $      -
                                                                                 --------           --------

The Accompanying Notes are an Integral Part of the Consolidated Financial Statements
</TABLE>
                                       26
<PAGE>


                              SOLPOWER CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE YEARS ENDED MARCH 31, 2005 AND 2004


--------------------------------------------------------------------------------
                                     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 SP34ETM, 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 SP34ETM, SP22E-A, SP22E-B and SP22E-C, 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 products, SP34ETM,
SP22E-A, SP22E-B and SP22E-C, refrigerant gas products.

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

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, 2005, which have resulted in
a deficiency in working capital of approximately $629,000 and an accumulated
deficit of approximately $13,487,000 as of March 31, 2005. (See Note 9)

                                       27
<PAGE>

During our fiscal years ended March 31, 2005 and 2004, the Company has been in
the middle stages as a development company seeking to find the complementary mix
of products for future marketing and distribution. The Company continues to
explore the total distribution and marketing for its products through
established distributors, both wholesale and retail. The Company anticipates
that this methodology will enable it to cut costs, increase the revenue stream
and increase profits over the long range. Although sales may decrease initially
with certain revenues going to the benefit of the distributors, we believe that
the Company's revenues, profits and cash flow will increase in the long term as
a result of this methodology as more distributors penetrate and sell through the
end users of these products.

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

                         Significant Accounting Policies

Principles of Consolidation

The consolidated balance sheets of the Company at March 31, 2005 and 2004,
includes the accounts of Solpower Corporation and Virtual Technologies Pty Ltd
(Australia) ("Virtual"), a wholly-owned Australian subsidiary. All significant
inter-company transactions and accounts have been eliminated in consolidation.

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.

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. The Company had no consignment sales for the years
presented.

Cash and Cash Equivalents

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

Accounts Receivable

The Company follows the allowance method of recognizing uncollectible accounts
receivable. The allowance method recognizes bad debt expense as a percentage of
accounts receivable based on a review of the individual accounts outstanding and
the Company's prior history of uncollectible accounts receivable. At March 31,
2005 and 2004 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.

                                       28
<PAGE>
Concentration of Credit Risk

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

During the current and prior fiscal years, one customer accounted for 69% and
76% of the Company Soltron(R) revenues, respectively. The customer referred to
is a major distributor of Soltron(R) product.

Inventory

Inventory at March 31, 2005 and 2004 consists of the Soltron(R) fuel additive
concentrate, and is stated at the lower of cost or market using the first-in,
first-out (FIFO) method. The Company periodically reviews its inventory and
makes provisions for damaged or obsolete inventory, if necessary. No provision
for damaged or obsolete inventory has been included in the accompanying
financial statements.

Property and Equipment

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

Estimated useful lives of the assets are as follows:
         Computer and Office Equipment                  5 years
         Furniture                                    5-7 years
         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, 2005 and 2004.

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, 2004, management determined that the costs
associated with the marketing licenses for Soltron(R) became impaired when sales
for this product line decreased substantially for the year ended March 31, 2004,
as compared to the sales for the previous year ended. Accordingly, the Company
wrote-off the balance associated with this license at March 31, 2004. The
provision for impairment of this license amounted to $119,700 for the year ended
March 31, 2004.

Intangilbles

Intangibles consist of trademarks and domain name and are amortized on a
straight- line basis over their estimated useful lives ranging from five years
to eight years.

                                       29
<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, 2005 was purchased on January 31, 2003 and in management's
opinion there is no impairment of the fair value at March 31, 2005.

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, 2005 and
2004.

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.

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
Corporation's foreign operations are deferred and included as a separate
component of stockholders' equity.

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.

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, 2005 and
2004 diluted net loss per common share is not included, as the effect of
including these shares is anti-dilutive.

                                       30
<PAGE>
At March 31, 2005, potential dilutive securities consisted of stock options
representing 1,500,000 common shares which were outstanding with excise prices
ranging between $0.15 and $1.00. The weighted average exercise price for
outstanding options is $0.43. At March 31, 2005, stock warrants representing
1,567,500 common shares were outstanding with an exercise price of $0.20. On
July 29, 2005, 750,000 of these warrants were exercised and the remaining
warrants expired unexercised on July 30, 2005.

Stock-Based Compensation

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

The Company recognized stock-based employee compensation for options issued to
two employees during the year ended March 31, 2005, amounting to $4,000 and none
was incurred during the year ended March 31,2004.

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

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

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,
                                                                  2005           2004
                                                                  ----           -----
                                                                (Unaudited)  (Unaudited)
<S>                                                           <C>             <C>
Net loss, as reported                                         $(1,036,355)    $ (485,296)
Add: total stock-based employee compensation expense
         included in reported net loss                              4,000              -

Deduct - stock-based compensation expense determined
         under the fair value method, net of tax effect           (42,000)             -
                                                              ------------    -----------
Pro forma net loss                                            $(1,074,355)    $ (485,296)
                                                              ============    ===========
Loss per share:
    Net loss per share, as reported                                $(0.02)    $    (0.01))
    Net loss per share, pro forma                                  $(0.02)    $    (0.01))

</TABLE>
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

                                       31
<PAGE>
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. SFAS 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 nonmonetary 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 entities 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
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.

In May 2005, the FASD issued SFAS no. 154, "Accounting Changes and Error
Corrections ("SFAS No. 154") which replaces APB Opinion No. 20, "Accounting
Changes" and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
Statements-An Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance on
the accounting for and reporting of accounting changes and error corrections..
Specially, this statement requires "retrospective application" of the direct
effect foe a voluntary change in accounting principle to prior periods'
financial statements, if it is practical to do so. SFAS No. 154 also strictly
defines the term "restatement" to mean the correction of an error revising
previously issued financial statements. SFAS No. 154 is effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005 and is required to be adopted by the Company in the first quarter of
fiscal year 2007. Although we will continue to evaluate the application of SFAS
No. 154, management does not currently believe adoption will have a material
impact on our results of operations, financial position or cash flows.


                                       32
<PAGE>
--------------------------------------------------------------------------------
                                     NOTE 2
                             PROPERTY AND EQUIPMENT
--------------------------------------------------------------------------------

Property and equipment consists of the following at March 31, 2005 and 2004:

                                             2005                2004
Furniture and Fixtures                    $  3,181            $  3,181
Computer and Office Equipment               22,350              22,350
Plant Equipment                             77,417              76,216
                                          ---------           ---------
                                           102,948             101,747
Less: Accumulated Depreciation             (50,762)            (38,666)
                                          ---------           ---------
                                          $ 52,186            $ 63,081
                                          =========           =========

Depreciation expense charged to operations for the years ended March 31, 2005
and 2004 was $12,647 and $13,020, 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 additional cost outlay to
the Company for an additional five years.

On June 17, 1998, the Company acquired the exclusive sales, distribution,
marketing and manufacturing rights to the Solpower product, SP34ETM (a
refrigerant) encompassing the North American Market (United States, Mexico and
Canada

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 products, SP34ETM,
SP22E-A, SP22E-B and SP22E-C, refrigerant gas products.

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

--------------------------------------------------------------------------------
                                     NOTE 4
                                   COMMITMENTS
--------------------------------------------------------------------------------

Operating Leases

The Company currently leases office in Coral Springs, Florida on a twelve month
lease, and warehouse space in San Pedro, California on a month to month. Total
monthly lease payments approximate $843 per month.

                                       33
<PAGE>
Lease expense charged to operations for the years ended March 31, 2005 and 2004,
were $12,575 and $31,363, respectively.

Convertible Promissory Note

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

Other Commitments

Effective April 1, 2000, the Company entered into an employment agreement 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 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 ended March 31, 2001. 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 to be re-issued. Effective March 31,
2001 the stock grants to Mr. Hirst ceased.

Since April 1, 2003, Mr. Hirst has been working as an at-will employee and no
formal employment agreement is in place currently. The agreement for the year
ended March 31, 2004 provided for a base salary of $120,000 per annum, along
with automobile, medical and relocation expense reimbursement. Mr. Hirst has
been accruing part of his salary in order to minimize monthly cash outlay by the
Company. Effective April 1, 2004, his base salary was reduced to $72,000 per
annum and he continued to receive automobile and medical expense reimbursement.

--------------------------------------------------------------------------------
                                     NOTE 5
--------------------------------------------------------------------------------
                                  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, 2005 and 2004, deferred tax assets on United States reported losses
consist of the following:

                                       34
<PAGE>

                                                2005            2004

       Net operating loss carry-forwards    $ 1,906,000  $ 1,576,000
       Less: valuation allowance             (1,906,000)  (1,576,000)
                                            ------------ ------------
                                            $         -  $         -
                                            ============ ============

At March 31, 2005 and 2004, the Company had United States federal net operating
loss carry-forwards in the approximate amount of $13,482,000 and $11,975,000,
respectively, available to offset future taxable income expiring through 2025
and 2024, respectively. At March 31, 2005 and 2004, the Company had Arizona
state net operating loss carry-forwards in the approximate amount of $6,449,000
and $7,563,000 respectively, available to offset future taxable income expiring
through 2010 and 2009, 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
carry forward 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 loss approximating $10,400 (US) and related accrued corporate taxes of
approximately $7,888 (US) for the fiscal year ended March 31, 2005 and pre-tax
operating income approximating $5,600 (US) and related accrued taxes
approximating $4,600 (US) for the fiscal year ended March 31, 2004.

--------------------------------------------------------------------------------
                                     NOTE 6
                           RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

Convertible Loan Payable to Related Party

On September 18, 2000, the Company issued a $400,000 Convertible Promissory Note
to Dominion Capital Pty Ltd. The note was to mature on September 18, 2001, and
is convertible into common shares of the Company at the lesser of the market
price on the date conversion notice is given to the Company or $0.40 per share
for the amount of principal outstanding at conversion. The note beared interest
at 8% percent per annum, payable quarterly in arrears. The note was unpaid at
December 11, 2002, with accrued interest on the note amounting to $71,365 and
the note and accrued interest was assigned by Dominion Capital Pty Ltd. to
Australian Agriculture Management Pty Ltd. Pursuant to the provisions of the
Assignment and Amendment of Debt Agreement, the interest rate was reduced from
8% to 5%, quarterly payments of $64,813 were to be made, and the conversion rate
was reduced from $0.40 per common share to $0.10 per common share. The due date
of the note was also extended an additional twenty-four (24) months from the
date of the Agreement signing on November 22, 2002. As of November 30, 2004, no
payments had been made on this obligation. Subsequent to the amended due date of
the note, the Company negotiated with Australian Agriculture Management Pty Ltd.
to convert the loan obligation and accrued interest into common shares. On
January 18, 2005, the Company's Board of Directors agreed by unanimous consent
to settle the debt and accrued interest for the issuance of 11,000,000 shares of
restricted common stock to Australian Agriculture Property Management Pty Ltd.
The Company recognized induced debt conversion expense of $607,930 at the time
of conversion.

Purchase of Virtual Technologies (Australia) Pty Ltd.

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

                                       35
<PAGE>
Purchase of Soltron(R) Worldwide Rights

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

--------------------------------------------------------------------------------
                                     NOTE 7
                               SHAREHOLDER EQUITY
--------------------------------------------------------------------------------


Stock Issued for Services and Debt

On September 22, 2003, the Company issued 1,700,000 restricted shares of common
stock for services.

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

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

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

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

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

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

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

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

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

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

Common Stock Sold

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

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

                                       36
<PAGE>
On July 7, 2004, the Company issued 400,000 shares of restricted common stock at
$0.05 per share pursuant to the sale of common stock in a private placement.

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

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

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

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

Common Stock Grants

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
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 dates, March 31, 2005 and
2004, the Company has recorded a liability for the value of the shares due Mr.
Hirst that were returned.

Stock Warrants

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

On January 21, 2004, the Board of Directors of the Company extended the exercise
period of 1,567,000 warrants from January 31, 2004 to January 31, 2005. On
January 11, 2005, the Board of Directors approved an additional extension to
July 30, 2005.The warrants have an exercise price of $0.20.

                                       37
<PAGE>
A summary of total stock warrants outstanding is as follows:

                                                                     Weighted
                                                  Number of           Average
                                                  Warrants        Exercise Price
                                                  ----------      --------------
      Outstanding at March 31, 2003                1,567,500             0.20

      Granted                                              -                -
      Forfeited                                            -                -
                                                  ----------
      Outstanding at March 31, 2004                1,567,500             0.20

      Granted                                              -                -
      Forfeited                                            -                -
                                                  ----------
     Outstanding at March 31, 2005                 1,567,500            $0.20
                                                  ==========
<TABLE>
<CAPTION>

                    Warrants Outstanding                                      Warrants Exercisable
-------------------------------------------------------------        ---------------------------------------
                                                Weighted
                                                Average
    Exercise                                   Remaining
    Price Per              Number             Contractual                  Number               Exercise
     Share               of Shares          Life (In Years)              Exercisable              Price
-----------------     -----------------     -----------------        --------------------     --------------
<S>  <C>                 <C>                       <C>                   <C>                      <C>
     $0.20               1,567,500                 .3                    1,567,500                $0.20

</TABLE>
On July 29, 2005, 750,000 of these warrants were exercised and the remaining
817,500 warrants expired on July 30, 2005.

Stock Options

On June 1, 2004, the Company issued a call options to five individuals for the
option to purchase 1,000,000 shares of restricted common stock at $0.15 per
share. The options were valued using the Black-Scholes option pricing model.

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, 2005, there were 5,000,000 shares reserved for options to be granted under
the Plan.

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. Mr. Moffat III options expired unexercised on May 28, 2003.

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. Mr. Van Deren's remaining 150,000 options expired on January 4, 2004.

                                       38
<PAGE>
On April 1, 2000, the Company entered into an employment agreement with Mr.
James Hirst. The agreement provides for cancellation of all previously issued
options and the issuance of 500,000 options at an exercise price of $1.00 per
share, which expire April 7, 2006. The options vest based on minimum market
price and reported gross revenue levels. 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.

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

A summary of the option activity is as follows:
                                                                 Weighted
                                              Number of           Average
                                               Options        Exercise Price
                                           ----------------   --------------
     Outstanding at March 31, 2003            1,100,000         $    1.88

     Granted                                          -
     Forfeited                                 (500,000)        $   (3.09)
                                           ----------------   ----------------
     Outstanding at March 31, 2004              600,000         $    0.88

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

Additional information about outstanding options to purchase the Company's
common stock as of March 31, 2005 is as follows:
<TABLE>
<CAPTION>

                   Options Outstanding                                   Options Exercisable
-----------------------------------------------------------     ---------------------------------------
                                              Weighted
                                              Average                                      Weighted
    Exercise                                 Remaining                 Number               Average
    Price Per             Number            Contractual              of Shares             Exercise
      Share             of Shares         Life (In Years)           Exercisable              Price
------------------    ---------------     -----------------      -------------------     --------------
<S>                           <C>            <C>                 <C>                       <C>
      $1.00                  500,000             .4                               -          $1,00
      $0.15                1,000,000            2.2                       1,000,000          $0.15
                      ---------------                            -------------------
                           1,500,000            1.6                       1,000,000          $0.15
                      ===============                            ===================
</TABLE>

Stock options issued to employees with an exercise price not less than the fair
market value of the Company's common stock on the date of grant result in no
compensation expense charged to operations. If the exercise price of employee
stock options is under the market price of the underlying stock on the date of
grant, compensation expense is recorded for the price differential times the
quantity of options granted. In accordance with accounting for such options
utilizing the intrinsic value method, the Company recorded compensation expense
in the Company's financial statements of $4,000 and $-0- for the years ended
March 31, 2005 and 2004, respectively. Had compensation cost for stock-based
compensation been determined based on the fair value of any options at the grant
dates consistent with the method of SFAS 123, the Company's net loss for the
years ended March 31, 2005 and 2004 would have been as presented in the pro
forma amounts in Note 1. No options were granted to employees for the year ended
March 31, 2004.

                                       39
<PAGE>
--------------------------------------------------------------------------------
                                     NOTE 8
                                 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 are readily available from a variety
of manufacturers worldwide.

--------------------------------------------------------------------------------
                                     NOTE 9
                                  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, 2005, which have resulted in
a deficiency in working capital of approximately $629,000 as of March 31, 2005,
and an accumulated deficit of approximately $13,487,000.

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.

                                       40

--------------------------------------------------------------------------------
                                     NOTE 10
                                SEGMENT REPORTING
--------------------------------------------------------------------------------

Information concerning operations by industry segment is as follows:

                                                             Year Ended
                                                               March 31,
       Revenues:
                                                           2005         2004
                                                           ----         ----
             Fuel additive                               $734,738    $ 324,285
             Refrigerant                                  393,373      365,303
                                                        ---------    ---------
                Total Revenues                          1,128,111      689,588
                                                        =========    =========
       Gross Profit:
             Fuel additive                                415,560      186,055
             Refrigerant                                  219,671      239,279
                                                        ---------    ---------
                   Total Gross Profit                     635,231      425.334
                                                        =========    =========
       Gross Profit Percent:
              Fuel additive                                 56.6%        57.3%
              Refrigerant                                   55.8%        65.5%
                   Total Gross Profit Percent               56.3%        61.7%

                                       41
<PAGE>
       General , Administrative & Other Expenses:
              Fuel additive                               751,439      657,778
              Refrigerant                                 229,114      228,171
                                                        ---------    ---------
                   Total Operating Expenses               980,553      885,949
                                                        ---------    ---------
       Operating( Loss) Profit:
              Fuel additive                             (335,879)    (471,723)
              Refrigerant                                 (9,443)      11,108
                                                        ---------    ---------
                  Total Operating Loss                  (345,322)    (460,615)
                                                        ---------    ---------
       Other Income (Expense):
            Fuel additive                               (940,796)     (14,630)
            Refrigerant                                     (957)      (5,464)
                                                        ---------    ---------
                   Total Other Income (Expense)         (941,753)     (20,094)
                                                        ---------    ---------
       Provision for Income Taxes:
            Fuel additive                                       -           -
            Refrigerant                                         -      (4,587)
                                                        ---------    ---------
                   Total Income Taxes                           -      (4,587)
                                                        ---------    ---------

       Net Income (Loss):
                Fuel additive                          (1,276,675)    (486,353)
                Refrigerant                               (10,400)       1,057
                                                        ---------    ---------
                   Total Net (Loss)                   $(1,287,075)   $(485,296)
                                                        =========    =========
       Depreciation and Amortization:
                Fuel additive                               $ 798        $ 532
                Refrigerant                                11,984       12,488
                                                        ---------    ---------
                  Total Depreciation & Amortization       $12,782      $13,020
                                                        =========    =========
       Accounts Receivable:
                Fuel additive                             $91,848      $30,500
                Refrigerant                               136,366      111,879
                                                        ---------    ---------
                   Total Accounts Receivable             $228,214     $142,379
                                                        =========    =========
       Inventory:
                Fuel additive                             $97,260     $131,045
                Refrigerant                                     -            -
                                                        ---------    ---------
                   Total Inventory                       $ 97,260     $131,045
                                                        =========    =========
       Total Assets:
                Fuel additive                            $391,496     $249,593
                Refrigerant                               226,083      263,720
                                                        ---------    ---------
                   Total  Assets                         $617,579     $513,313
                                                        =========    =========
       Capital Expenditures:
                Fuel additive                                $  -        $   -
                Refrigerant                                 5,358       21,851
                                                        ---------    ---------
                   Total Capital Expenditures              $5,358      $21,851
                                                        =========    =========

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

         None.

                                       42
<PAGE>

                                    PART III

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

(a)      Directors and Executive Officers

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

Name                                Age                Positions Held(1)
----                                ---                --------------

Fraser M. Moffat III                75                 Director, Chairman
James H. Hirst                      58                 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,
2004. This information is based on a review of Section 16(a) reports furnished
to Solpower.

Fraser M. Moffat III failed to timely file a report on Form 4 related to 500,000
shares on September 22, 2003. A Form 5 to report the delinquent filing was also
not timely filed. The required report was filed in May 3, 2005.

James H. Hirst failed to timely file a report on Form 4 related to 775,500
shares acquired by his wife. A Form 5 to report the delinquent filing was also
not timely filed. The required report was filed in April 29, 2005.

                                       43
<PAGE>
Peter Voss failed to timely file a report on Form 4 related to the disposition
of 140,000 shares by BioEngineering Pty Ltd on December 15, 2003. A Form 5 to
report the delinquent filing was also not timely filed. The required report was
filed in May 5, 2005.

AUDIT COMMITTEE FINANCIAL EXPERT

We have not appointed an audit committee and, accordingly, do not have an audit
committee financial expert. Due to the small size of our Board of Directors, the
audit committee function is performed by the full board. We have determined to
defer creation of an audit committee and engagement of an audit committee
financial expert until such time as our business operations have grown and an
increase to the size of the board of directors is warranted.
CODE OF ETHICS
In February of 2005, the Board of Directors adopted a Code of Ethics meeting the
requirements of Section 406 of the Sarbanes-Oxley Act of 2002. Our Code of
Ethics is publicly available on our web site at www.solpower.com. If we make
substantive amendments to the Code of Ethics or grant any waiver, including any
implicit waiver, we will disclose the nature of such amendments or waiver on our
web site or in a report on Form 8-K. We will provide to any person without
charge, upon request, a copy of such Code of Ethics. Persons wishing to make
such a request should contact Robert Kohn, Interim CEO, 11555 Heron Bay
Boulevard, Suite 200, Coral Springs, Florida, 33076 or contact by telephone at
(954) 603-0520.

ITEM 10.   EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for the fiscal years
ended March 31, 2005, 2004 and 2003 for the sole officer. No other person
received salary or bonus in excess of $100,000 for any of these fiscal years.
<TABLE>
<CAPTION>
                           Summary Compensation Table

--------------------------------- ----------------------------------------------------- ----------------------
                                                                                              Long Term
                                                  Annual Compensation                       Compensation
--------------------------------- ----------------------------------------------------- ----------------------
                                                                         Other                  Stock
Name and Principal Position          Fiscal                              Annual                Options
                                      Year           Salary           Compensation            (Shares)
--------------------------------- -------------- ---------------- --------------------- ----------------------
<S>                                   <C>              <C>                  <C>                    <C>
James H. Hirst                        2005              -               $ 72,000               $21,000
Chief Executive Officer               2004              -               $104,100                  -
  & President                         2003                              $130,820                  -
--------------------------------- -------------- ---------------- --------------------- ----------------------
</TABLE>
Other compensation is compensation paid and reported to Internal revenue Service
on Form 1099. ]

Option Grants

The following table sets forth information regarding the grants of options to
executive officers for the fiscal year ended March 31, 2005. There was a grant
of 200,000 call options to the executive officer for the fiscal year ended March
31, 2005.

                                       44
<PAGE>
<TABLE>
<CAPTION>
                        Option Grants in Fiscal Year 2001

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

<S>                            <C>                          <C>                    <C>                       <C>
James H. Hirst                 500,000                      40%                    $1.00               April 1, 2006
--------------------- --------------------------- ------------------------ ----------------------- -----------------------

                                         Option Grants in Fiscal Year 2005

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

James H. Hirst                 200,000                      23%                    $0.15                May 31,2007
--------------------- --------------------------- ------------------------ ----------------------- -----------------------

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, 2004.

                                           Aggregate Option Exercises In
                                Last Fiscal Year and Fiscal Year-End Option Values
 ------------------------ ------------------------ ---------------------- ----------------------- ----------------------
                                                                                                  Value of Unexercised
                                                                           Number of Unexercised  In-the-Money Options
                                                                            Options at March 31,    at March 31, 2005
                                                                                    2005
 ------------------------ ------------------------ ---------------------- ----------------------- ----------------------
                            Shares Acquired on                                  Exercisable/          Exercisable/
           Name                  Exercise             Value Realized           Unexercisable          Unexercisable
  ----------------------- ------------------------ ---------------------- ----------------------- ----------------------

  James H. Hirst                     0                       0                200,000/500,000             $0/$0
  ----------------------- ------------------------ ---------------------- ----------------------- ----------------------
</TABLE>
Employment Agreements

We had an employment agreement with Mr. Hirst effective in fiscal year 2001.
This agreement was to be for an initial term of three years. Base salary has
been set at $126,000. In addition, Mr. Hirst received options to purchase
500,000 shares at $1.00 per share, subject to vesting, and stock grants
initially of 10,000 shares per month thereafter. The stock grant 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 under his contract during the fiscal year
ended March 31, 2003 and was an at-will employee during the years ended March
31, 2005 and 2004.

Director Compensation

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

Stock Option Plan

In November 1997, the Board of Directors adopted a Stock Option and Incentive
Plan (the "Plan"), which the shareholders approved on November 22, 1997. The
purpose of the Plan is to provide a means to attract employees and service
providers and to reward persons responsible for the successful administration
and management of Solpower. Another purpose of the Plan is to provide such
persons with additional incentive and reward opportunities designed to enhance
profitable growth. So that the appropriate incentive can be provided, the Plan


                                       45
<PAGE>
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 common stock. As of March 31, 2005, 500,000 options had been committed
at an exercise price of $1.00.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 31, 2005, the ownership of each
person known by us to be the beneficial owner of five percent or more of our
Common Stock, each officer and director individually, and all officers and
directors as a group. We have been advised that each person has sole voting and
investment power over the shares listed below unless otherwise indicated.

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

Fraser M. Moffat III                           500,000                  .7%
18 Lake Avenue
Montrose, Pennsylvania

James H. Hirst (2)                           3,105,600 (3)             4.5%
102-1350 view Cresent
Delta, British Columbia, Canada

Naoya Yoshikawa                              6,000,100 (4)             8.6%
2-16-42 Takanawa
Minato-Ku, Japan

Power Business Co Ltd.                       3,000,000                 4.3%
2-16-42 Takanawa
Minato-Ku, Japan

A-1 Financial Planners Pty Ltd. (5)            666,666                 1.0%
C/o 39 Dehavilland Road
Mordialloc 3195
Victoria, Australia

Australian Native Estates Pty Ltd (5)        4,000,000                 5.8%
Australia


Pastoral Heights Pty Ltd (5)                 3,000,000                 4.3%
C/o Davis Coster Accountants
13 Malcom Court
Mt. Waverly, Australia

Marino Investment Services Limited (5)       4,143,600                 6.0%
C/o Warwick Int Services Ltd
Smith Street
St Peter Port
Guernesy Channel

                                       46
<PAGE>
Name and Address                           Amount and Nature    Percent of Class
of Beneficial Owner                          of Ownership             (1)
-------------------                          ------------             ---

Greg Stewart                                 7,547,082 (6)            10.9%
307 East 22nd Street
San Pedro, CA 90731

Dominion Capital Pty Ltd. (5)                   70,000                   0%
39 De Havilland Road
Mordialloc 3195
Victoria, Australia

Peter Voss (5)                              15,862,041 (5)            22.5%
39 De Havilland Road
Mordialloc 3195
Victoria, Australia

K. M. Voss (5)                               3,000,000                 4.3%
39 De Havilland Road
Mordialloc 3195
Victoria, Australia

Intavest Pty Ltd (5)                           681,775                 1.0%
C/o 7 North Road Brighton
Victoria, Australia

Les Woolridge (7)                            3,000,000                 4.3%
Victoria
Australia

All Directors and Officers                   3,605,600                 5.2%
as a Group (2 persons)
--------------------------------

(1) Based upon 69,309,727 shares of common stock being issued and outstanding on
June 30, 2005.
(2) Mr. Hirst has been granted options to purchase up to an additional 500,000
shares of common stock at $1.00 per share upon the market price of the common
stock attaining certain levels. . These options have not vested, are not
exercisable until vested and are not included in the total above. Mr. Hirst has
also been granted call options for 200,000 shares of common stock at $0.15 per
share and are included in the above total above.
(3) Includes 130,000 shares issuable under a deferred compensation arrangement
and 775,500 shares held by Mr. Hirst's wife in which Mr. Hirst disclaims all
beneficial ownership.
(4) Includes 3,000,000 shares held by Power Business Co Ltd. and is a Japan
corporation controlled by Mr. Yoshikawa.
(5) Mr. Voss controls Dominion Capital Pty Ltd., which holds 70,000 shares, A1
Financial Planners Pty Ltd., which holds 666,666 shares, Intavest Pty Ltd.,
which holds 681,775 shares, Marino Investments Services Limited., which holds
4,143,600 shares, Pastoral Heights Pty Ltd., which holds 3,000,000 shares and
Australian Native Estates Pty Ltd., which holds 4,000,000 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.
(6) Mr. Stewart controls Purse Seine Soma, Inc., which holds 550,000 shares. The
total includes warrants to purchase 250,000 common shares at $0.20 per share.
(7) Mr. Woolridge is the sole director the Company's subsidiary, Virtual
Technologies (Australia) Pty Ltd.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective January 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
entity is controlled by Mr. Peter Voss.

                                       47
<PAGE>
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. This entity is controlled by Mr. Peter Voss.

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

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

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

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K
     (a)          Exhibits

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

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

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

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

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

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

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

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

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

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


                                       48
<PAGE>
     10.17(2)       Addendum to June 17, 1998 Acquisition Agreement effective
                    January 1, 1999.

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

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

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

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

     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.
_____________________________________
(1) Incorporated by reference from Solpower's Form 10-SB as filed on August 21,
1998.
(2) Incorporated by reference from Solpower's Form 10-KSB as filed on September
24, 1999.
(3) Incorporated by reference from Solpower's Form 10-QSB as filed on February
20, 2001.
(4) Incorporated by reference from Solpower's Form 10-KSB as filed on May 26,
2005.

         (b)      Reports on Form 8-K.

                  None.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The following table summarizes the aggregate fees billed by Semple &
Cooper, LLP for the fiscal years ended March 31, 2005 and 2004:

                                          Year Ended March 31,
                                                 2005             2004
                                                 ----             ----
          Audit Fees (1)                     $   15,000         $   15,000
          Audit-Related Fees (2)                 16,400                  -
          Tax Fees                                    -                  -
                                             -----------        -----------
          Total                              $   31,400         $   15,000
                                             ===========        ===========
________________________
(1) Fees for audit services billed or accrued in fiscal years 2005 and 2004
consisted of audit of Solpower Corporation's annual financial statements.
(2) Fees for review services for quarterly security filings accrued for fiscal
year 2005.

                                       49
<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:   September 19, 2005         By: /s/ James H. Hirst
                                        ----------------------------------------
                                        James H. Hirst, Chief Executive Officer

                                    BOARD OF DIRECTORS
Dated:   September 19, 2005         By: /s/ Fraser M Moffat III
                                        ----------------------------------------
                                       Fraser M. Moffat III, Chairman

Dated:   September 19, 2005         By: /s/ James H. Hirst
                                        ----------------------------------------
                                        James H. Hirst


                                       50