UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

x

For the quarterly period ended March 31, 2010

 ̈
          TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number:       000-51256

POWER AIR CORPORATION(Exact name of registrant as specified in its charter)





|Nevada                                                                            |  | 98-0433974                          
|--------------------------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization )                   |  | (I.R.S. Employer Identification No.)
|                                                                                  |  |                                     
|Suite 125-9 Burbidge StreetCoquitlam, British Columbia, Canada                    |  | V3K 7B2                             
|(Address of principal executive offices)                                          |  | (Zip Code)                          
|                                                                                  |  |                                     
|(604) 468-7771                                                                    |  |                                     
|(Registrant's telephone number, including area code)                              |  |                                     
|                                                                                  |  |                                     
|Not Applicable                                                                   
|(Former name, former address and formal fiscal year, if changed since last report

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  £
   No  £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.





|Large accelerated filer  ̈                                              | Accelerated filer     ̈     
|---------------------------------------------------------------------- | ---------------------------
|Non-accelerated filer  ̈
 (Do not check if a smaller reporting company) | Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
                                                                                                                                                               Yes  ̈
 No x

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  15,741,487 shares of common stock as of May 14, 2010.





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POWER AIR CORPORATION
Quarterly Report On Form 10-Q
For The Quarterly Period Ended
March 31, 2010



INDEX





|FORWARD-LOOKING STATEMENTS     | 3       
|------------------------------ | --------
|PART I - FINANCIAL INFORMATION | 4       
|                               | Item 1. 
|                               | Item 2. 
|                               | Item 3. 
|                               | Item 4. 
|PART II - OTHER INFORMATION    | 29      
|                               | Item 1. 
|                               | Item 1A.
|                               | Item 2. 
|                               | Item 3. 
|                               | Item 4. 
|                               | Item 5. 
|                               | Item 6. 







2



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FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this quarterly report under "Risk Factors". These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this quarterly report. Forward-looking statements in this quarterly report include, among others, statements regarding:









While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Some of the risks and assumptions include:

- our need for additional financing;
- our limited operating history;
- our history of operating losses;
- the competitive environment in which we operate;
- changes in governmental regulation and administrative practices;
- our dependence on key personnel;
- conflicts of interest of our directors and officers;
- our ability to fully implement our business plan;
- our ability to effectively manage our growth; and
- other regulatory, legislative and judicial developments.

We advise the reader that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Important factors that you should also consider, include, but are not limited to, the factors discussed under "Risk Factors" in this quarterly report.

The forward-looking statements in this quarterly report are made as of the date of this quarterly report and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.





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PART I - FINANCIAL INFORMATION

Item 1.            Financial Statements

The following unaudited interim financial statements of Power Air Corporation (sometimes referred to as "we", "us" or "our Company") are included in this quarterly report on Form 10-Q:





|                                           | Page
|------------------------------------------ | ----
|Consolidated Balance Sheets                | 5   
|Consolidated Statements of Operations      | 6   
|Consolidated Statements of Cash Flows      | 7   
|Notes to Consolidated Financial Statements | 8   













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Power Air Corporation
(A Development Stage Company)
Consolidated Balance Sheets
(Unaudited)



|                                                                                                                                          | March 31, 2010 | September 30, 2009
|----------------------------------------------------------------------------------------------------------------------------------------- | -------------- | ------------------
|ASSETS                                                                                                                                    |                |                   
|Current assets                                                                                                                            |                |                   
|Cash                                                                                                                                      | $36,898        | $424,235          
|Other current assets                                                                                                                      | 30,293         | 27,263            
|Total current assets                                                                                                                      | 67,191         | 451,498           
|Equipment (Note 2)                                                                                                                        | 270,219        | 247,574           
|Total Assets                                                                                                                              | $337,410       | $699,072          
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                     |                |                   
|                                                                                                                                          |                |                   
|Current liabilities                                                                                                                       |                |                   
|Accounts payable                                                                                                                          | $239,200       | $482,895          
|Accrued liabilities (Note 6)                                                                                                              | 311,373        | 396,929           
|Advance from related party                                                                                                                | -              | 500,000           
|Total Current Liabilities                                                                                                                 | 550,573        | 1,379,824         
|Stockholders deficit                                                                                                                      |                |                   
|Common stock (Note 3)
37,500,000 shares authorized, $0.001 par value; 14,470,378 and 9,845,378 shares issued and outstanding respectively | 14,470         | 9,845             
|Additional paid-in capital                                                                                                                | 23,635,514     | 22,687,639        
|Shares to be issued (Note 3)                                                                                                              | 315,333        | 62,500            
|Deficit accumulated during the development stage                                                                                          | (24,178,480)   | (23,440,736)      
|Total Stockholders' Deficit                                                                                                               | (213,163)      | (680,752)         
|Total Liabilities and Stockholders' Deficit                                                                                               | $337,410       | $699,072          

The accompanying notes are an integral part of the consolidated financial statements



5



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Power Air Corporation
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)



|                                    | Three Months 
Ended March 31, 2010 | Three Months 
Ended March 31, 2009 | Six Months 
Ended 
March 31, 2010 | Six Months 
Ended 
March 31, 2009 | From October 
15, 1997 (Date 
of Inception) 
March 31, 2010
|----------------------------------- | ---------------------------------- | ---------------------------------- | --------------------------------- | --------------------------------- | -----------------------------------------------------------
|Expenses                            |                                    |                                    |                                   |                                   |                                                            
|Depreciation and amortization       | $26,950                            | $26,145                            | $52,452                           | $52,321                           | $306,976                                                   
|Development and engineering         | 109,132                            | 170,787                            | 266,619                           | 293,422                           | 5,895,550                                                  
|General and administrative (Note 4) | 215,671                            | 346,897                            | 385,900                           | 686,350                           | 12,191,946                                                 
|License fees                        | -                                  | 3,425                              | -                                 | 28,425                            | 650,297                                                    
|Marketing and selling               | -                                  | 14,954                             | 11,985                            | 30,432                            | 1,668,078                                                  
|Interest and finance fees           | 19,642                             | 477                                | 20,788                            | (1,726)                           | 3,461,202                                                  
|Total Expenses                      | 371,395                            | 562,685                            | 737,744                           | 1,089,224                         | 24,174,049                                                 
|Loss before other items             | (371,395)                          | (562,685)                          | (737,744)                         | (1,089,224)                       | (24,174,049)                                               
|                                    |                                    |                                    |                                   |                                   |                                                            
|Other items                         |                                    |                                    |                                   |                                   |                                                            
|Write down of equipment             | -                                  | -                                  | -                                 | -                                 | 48,968                                                     
|Write down of inventory             | -                                  | -                                  | -                                 | -                                 | 13,945                                                     
|Gain on debt settlement             | -                                  | -                                  | -                                 | -                                 | (13,556)                                                   
|Interest and other income (expense) | -                                  | (350)                              | -                                 | 750                               | (44,926)                                                   
|                                    | -                                  | (350)                              | -                                 | 750                               | 4,431                                                      
|Net Loss                            | $(371,395)                         | $(563,035)                         | $(737,744)                        | $(1,088,474)                      | $(24,178,480)                                              
|                                    |                                    |                                    |                                   |                                   |                                                            
|Net Loss Per Share                  | $      (0.03)                      | $      (0.07)                      | $      (0.05)                     | $         (0.13)                  |                                                            
|Weighted Average Shares Outstanding | 13,799,182                         | 8,145,368                          | 14,131,092                        | 8,145,368                         |                                                            

The accompanying notes are an integral part of the consolidated financial statements



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Power Air Corporation
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

|                                                   | Six Months 
Ended March 31, 2010 | Six Months 
Ended March 31, 2009 | From October 
15, 1997 (Date of 
Inception) to March 31, 2010
|-------------------------------------------------- | -------------------------------- | -------------------------------- | -------------------------------------------------------------
|Operating Activities:                              |                                  |                                  |                                                              
|Net Loss                                           | $(737,744)                       | $(1,088,474)                     | $(24,178,480)                                                
|Non-cash items                                     |                                  |                                  |                                                              
|Amortization of deferred financing costs           | -                                | -                                | 3,281,323                                                    
|Amortization of property and equipment             | 52,452                           | 52,321                           | 306,975                                                      
|Write down of equipment                            | -                                | -                                | 48,968                                                       
|Write down of inventory                            | -                                | -                                | 13,945                                                       
|Shares and warrants issued for consulting services | -                                | -                                | 196,772                                                      
|Shares issued for employee bonus                   | -                                | -                                | 288,000                                                      
|Stock based compensation                           | -                                | -                                | 2,497,534                                                    
|Expenses settled with issuance of common shares    | -                                | -                                | 2,195,114                                                    
|Changes in operating assets and liabilities        |                                  |                                  |                                                              
|Other current assets                               | (3,030)                          | 55,498                           | (19,238)                                                     
|Accounts payable and accrued liabilities           | (133,918)                        | 468,075                          | 877,236                                                      
|Net Cash Used in Operating Activities (822,240)    | (822,240)                        | (512,580)                        | (14,491,851)                                                 
|Investing Activities:                              |                                  |                                  |                                                              
|Purchases of equipment                             | (75,097)                         | (30,036)                         | (626,162)                                                    
|Net Cash Used in Investing Activities              | (75,097)                         | (30,036)                         | (626,162)                                                    
|Financing Activities:                              |                                  |                                  |                                                              
|Proceeds from related party loans                  | -                                | -                                | 4,398,090                                                    
|Repayment of related party loans                   | -                                | -                                | (157,094)                                                    
|Proceeds from promissory notes                     | -                                | -                                | 2,190,000                                                    
|Repayments of promissory notes                     | -                                | -                                | (2,190,000)                                                  
|Proceeds from issuance of common stock             | 515,000                          | -                                | 11,574,926                                                   
|Debt issuance costs                                | -                                | -                                | (357,317)                                                    
|Deferred financing costs                           | -                                | -                                | (28,047)                                                     
|Share issuance costs                               | (5,000)                          | -                                | (275,647)                                                    
|Net Cash Used in Financing Activities              | 510,000                          | -                                | 15,154,911                                                   
|Increase (Decrease) in Cash                        | (387,337)                        | (542,616)                        | 36,898                                                       
|Cash, Beginning of Period                          | 424,235                          | 543,941                          | -                                                            
|Cash, End of Period                                | $36,898                          | $1,325                           | $36,898                                                      
|Cash paid for interest                             | $-                               | $-                               | $-                                                           
|Cash paid in income taxes                          | $-                               | $-                               | $-                                                           

Non-cash Investing and Financing Activities - Note 5

The accompanying notes are an integral part of the consolidated financial statements



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Power Air Corporation (A Development Stage Company)Notes to Consolidated Financial StatementsMarch 31, 2010(Unaudited)

``

1.       Accounting Policies

a)     Basis of Presentation



The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and the rules and regulations of the Securities and Exchange Commission.  They may not include all information and footnotes required by United States generally accepted accounting principles ("U.S. GAAP") for complete financial statements.  However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the audited consolidated financial statements for the year ended September 30, 2009 included in the Company's Form 10-K filed with the Securities and Exchange Commission.  The unaudited interim financial statements should be read in conjunction with the information included in the Form 10-K filed on January 13, 2010.  In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples include: estimates of loss contingencies, product warranties, product life cycles, product returns, and stock-based compensation forfeiture rates;. Actual results and outcomes may differ from management's estimates and assumptions. Operating results for the six months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending September 30, 2010



We evaluated events occurring between the end of our fiscal quarter, March 31, 2010 to the date of filing.



b)     Recent accounting pronouncements with future effective dates are not expected to have an impact on the Company's financial statements.



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2.       Property and Equipment





3.       Common stock

a)     On October 13, 2009, the Company issued 2,000,000 units at a subscription price of $0.20 per unit for proceeds of $400,000from a director of the company. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.20 per share until October 7, 2011.

b)     On October 13, 2009, the Company issued 2,500,000 units at a subscription price of $0.20 per unit in  repayment of a $500,000 advance from a related party received prior to September 30, 2009. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.20 per share until October 7, 2011

c)     On October 26, 2009, the Company issued 125,000 common shares according to the terms of a settlement agreement signed before the September 30, 2009.

d)     During January 2010, the Company received total proceeds of $105,000 by subscriptions for 233,333 units at $0.45 per unit. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.45 per share until March 31, 2011. The Company agreed to issue 11,111shares with a market value of $0.45 per share and to pay $5,000 cash as finder's fees. As at March 31, 2010, the proceeds and finder's fees were recorded as shares to be issued. All shares were subsequently issued on April 1, 2010.

e)     During January 2010, the Company received proceeds of $10,000 by subscription for 50,000 units at $0.20 per unit. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.20 per share until March 31, 2011. As at March 31, 2010 the proceed was recorded as shares to be issued. All shares were subsequently issued on April, 2010.

f)     During March 2010 the Company signed debt settlement agreements with former and current directors. The Company agreed to issue 976,665 shares at $0.20 per share to settle all debt payable to the directors. As at March 31, 2010, total $195,333 was recorded as shares to be issued. All shares were subsequently issued on April 1, 2010.



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``

g)       Stock Options

A summary of the Company's stock option activity is as follows:



|`                                               | Number of Options |  | Weighted
Average
Exercise
Price$
|----------------------------------------------- | ----------------- |  | --------------------------------
|Balance, March 31, 2010 and  September 30, 2009 | 50,000            |  | 1.60                            



The following table summarizes stock options outstanding at March 31, 2010:

``



|Outstanding and Exercisable
|---------------------------
|Number of Shares           
|50,000                     

h)       Warrants

A summary of the Company's common share purchase warrant activity is as follows:



|                            | Number of Warrants |  | Weighted Average
Exercise
Price
$
|--------------------------- | ------------------ |  | ---------------------------------
|Balance, September 30, 2009 | 3,200,000          |  | 1.28                             
|Issued                      | 4,500,000          |  | 0.20                             
|Balance, March 31, 2010     | 7,700,000          |  | 0.65                             



The following table summarizes warrants outstanding at March 31, 2010:



|Number 
of Warrants |  | Exercise Price$ |  | Expiry Date      
|------------------- |  | --------------- |  | -----------------
|                    |  |                 |  |                  
|1,500,000           |  | 2.50            |  | May 14, 2010     
|1,300,000           |  | 0.20            |  | May 12, 2011     
|400,000             |  | 0.20            |  | September 4, 2011
|2,500,000           |  | 0.20            |  | October 7, 2011  
|2,000,000           |  | 0.20            |  | October 7, 2011  
|7,700,000           |  |                 |  |                  



Warrants outstanding have a weighted average remaining life of 1.18 years.



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4.       Related Party Transactions and Balances

a)     Director fees of $33,000 (2009-$50,000) were charged to general and administration expense. Unpaid director's fees of $8,000 at March 31, 2010 (September 30, 2009-$170,000)was included in accrued liabilities.

b)     Management fees of $15,518 (2008-$Nil) charged to general and administration expense was incurred to an former officer of the Company. As at March 31, 2010, $Nil (September 30, 2009-$8,860) payable to the former officer was included in accounts payable.

c)      Management fees of $3,724 (2008 - $Nil) charged to general and administration expense was incurred to an officer of Power Air (Canada) Corp ("PACC"), 50% owned by the Company.

d)      Refer to Note 3 (f).

5.       Non-cash Investing and Financing Activities

a)     During the quarter ended December 31, 2009, the Company issued 125,000 common shares according to the terms of settlement agreement signed with former director for $62,500.

b)     During the quarter ended December 31, 2009, the Company issued 2,500,000 units on repayment of a $500,000 advance from a related party.

c)      During the quarter ended March 31, 2010, the Company committed to issue 976,665 common shares according to the terms of settlement agreement signed with five directors for $195,333.

d)     During the quarter ended March 31, 2010, the Company committed to issue 11,111 common shares at $0.45 per share for finder's fee.

6.       Commitment

During March 2010, the Company signed a consulting agreement with an officer of PACC and agreed to pay $7,843 (CDN$8,000) per month until December 31, 2010 and $9,804 (CDN$10,000) per month commencing January 1, 2011 as consulting fees.  The Company also agreed to pay bonus of $49,020 (CDN$50,000) in cash if PACCC received government funding.

7.       Subsequent Events

a)     Subsequent to the quarter ended March 31, 2010, the Company received total of $100,000 as proceeds for private placements.

b)      Refer to Notes 3(d ) to (f).



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Item 2.             Management

The following discussion of our financial condition, changes in financial condition and results of operations for the six months ended March 31, 2010 and 2009 should be read in conjunction with our unaudited interim financial statements and related notes for the six months ended March 31, 2010 and 2009. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth below under the heading "Risk Factors".

Our Corporate History

Our Company was formed under the laws of the State of Nevada on August 26, 2004 under the name "Fortune Partners, Inc." By an amendment to our Articles of Incorporation we changed our name to "Power Air Corporation" effective on December 22, 2005.

Our principal business offices are located at Suite 125-9 Burbidge Street, Coquitlam, British Columbia, Canada, V3K 7B2. Our telephone number is (604) 468-7771.

We own 100% of the issued and outstanding shares of Power Air Tech, Inc., which was formed under the laws of the State of Delaware in October of 1997, together with 50% of the issued and outstanding shares of Power Air (Canada) Corp. ("Power Air Canada"), which was formed under the laws of the Province of British Columbia, Canada, on December 12, 2005. Power Air (Canada) Corp. is considered a variable interest entity due to our Company's control over the operations and 100% funding of costs to date, and thus is considered a 100% consolidated subsidiary.

On September 30, 2005, we acquired all of the issued and outstanding shares of Power Air Tech, Inc. As a result of such acquisition, we are a development stage company engaged in the business of developing, manufacturing and marketing of fuel cell based commercial products.

This acquisition represented a change in control of our Company. The change in control, for accounting purposes, constitutes a re-capitalization of our Company and, therefore, the transaction has been accounted for as a reverse merger whereby Power Air Corporation is considered the acquired entity and the operations of Power Air Tech, Inc. have become the continuing operations of our Company.

Prior to the completion of the acquisition, the operations of Power Air Tech, Inc. focused on raising funds through a reverse merger with a public company, settling outstanding debt and maintaining its license with Lawrence Livermore National Laboratory ("LLNL") in Livermore, California.

Our Business

Until recently, we held the exclusive world-wide license for the development and commercialization of the zinc air fuel cell ("ZAFC") technology developed through an extensive joint collaboration effort with Lawrence Livermore National Laboratory ("LNLL") and the United States Department of Energy ("DOE"). We also held exclusive world-wide rights to a second LLNL patent pertaining to a low-cost process for recovering zinc and converting it to pellet form for reuse in the ZAFC system. LLNL is a leading United States Government research and development facility located in Livermore, California.  Our agreement with LLNS terminated on November 3, 2009.  Since then we have developed new, next generation ZAFC designs.

Our ZAFC technology is a metal oxide fuel cell using simple physical chemistry. It uses a combination of atmospheric oxygen and zinc pellets in a liquid alkaline electrolyte mixture referred to as an "electrolyte" to generate electricity. The by-products from the chemical reaction are zinc oxide and potassium zincates. The electrolyte used in the ZAFC fuel cells is potassium hydroxide, a chemical which is readily available in commercial quantities. In operation, the fuel cell consumes all of the zinc; and is operationally quiet, providing instantaneous stable electrical energy with zero greenhouse gas emissions.



12



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Our objective is to commercialize the ZAFC technology to the stage where the technology can be incorporated into ZAFC products that can be manufactured and sold or leased for use as the power supply for commercial applications. We have completed initial development work on prototype zinc air fuel cells incorporating our technology. We plan to continue this development work in order to develop products incorporating our ZAFC technology that can be commercially marketed to consumers and businesses. In pursing this objective, we plan to undertake strategic relationships with original equipment manufacturers ("OEMs") who would incorporate our ZAFC technology into fuel cell powered products to be manufactured and sold by the OEM. As well, we plan to develop and design end-user commercial products that will be manufactured by third party contract manufacturers, and marketed and distributed by Power Air directly.

We will continue technology development to develop a ZAFC based portable emergency generator designed for back-up or emergency use in homes and small businesses. We have developed prototypes of both of these products using our ZAFC technology. In order to complete development of commercial products, we will have to complete the following phases of development:

- completion of technology development required to complete a "technology transfer" to product development
- completion of the design, manufacture and testing of engineering prototypes;
- completion of the design, manufacture, testing and certification of manufacturing prototypes; and
- pilot production of commercial products.

We anticipate that we will require additional financing to enable us to complete the design and testing of engineering prototypes and to complete the certification and pilot production of commercial ZAFC generators. We intend to raise additional equity financing to continue our technology and product development projects, to fund the manufacturing and packaging of our initial ZAFC Series inventories, to test and certify our auxiliary power packs, and to expand our engineering and sales/marketing headcount. However, we do not currently have such financing in place.

Our long-term goal is to be a commercially viable fuel cell company, powering low cost, silent, zero emission fuel cell based products developed with OEM partners for portable, stationary, light mobility and transportation markets. However, we have not yet completed the development of any products incorporating our ZAFC fuel cell technology that can be commercially marketed and sold. Further, we have not achieved any revenues to date and we are currently considered a development stage company. We anticipate achieving initial product revenues beginning in the fourth quarter of calendar 2010, and growing over the 2011 and 2012 calendar years, although there is no guarantee that we will achieve these results.  We will require substantial additional financing for us to achieve our business objectives.

Industry Background

Generic Fuel Cells

A fuel cell is an electrochemical device, which cleanly converts chemical energy of a fuel and oxidant directly into low voltage direct current (DC) electricity. A fuel cell produces electricity and heat using a "fuel source" and oxygen. There is no conversion into heat by combustion of the fuel, and no conversion into mechanical energy, as is the case of a heat driven generator system. Thus, the efficiency of fuel cells is not a function of operating temperature.

The principal components of a fuel cell are catalytically activated electrodes for the fuel (anode) and the oxidant (cathode) plus an electrolyte to conduct between the two electrodes. In its operation the fuel cell creates DC power, which can be converted to AC power through an inverter. The fuel cell offers an alternative to existing power plants as a source of electrical power.

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Commercialization of Fuel Cells

While generic fuel cells have been in existence for over a century, a recent expansion in demand for more efficient, stable and continuous supply of power, which can operate cleanly and quietly, has led to attempts to commercialize fuel cells as a source of power. Currently, batteries and engines provide reasonable power solutions in a broad number of markets and applications. However, each of these power solutions has its own inherent disadvantages. Engines are not suitable for many applications as they are noisy, polluting and unreliable as a power source. Batteries are not suitable for many applications as they are heavy, have to be recharged, have a variable life span and gradually lose power.

Fuel cells have been presented as an alternative technology for power solutions as they do not possess some of the limitations of batteries and engines. Fuel cells offer an alternative solution as they can operate without the noise and emissions associated with hydrocarbon combustion and can provide a continuous source of electrical power.

Initial commercialization efforts have focused on polymer electrolyte membrane ("PEM") fuel cells that use hydrogen as a source of fuel. While PEM fuel cell prototypes have been tested in a variety of applications, conventional PEM fuel cells are costly to produce and operate, and the fuel (hydrogen) is difficult to distribute and store. These limitations have made commercialization of products powered by conventional PEM fuel cells difficult at present.

Our ZAFC Technology Solution

We believe that fuel cells incorporating our ZAFC technology offer the opportunity to deliver a fuel cell solution without the limitations of commercial products powered by conventional PEM fuel cells. We believe that our ZAFC technology offers the ability to develop and manufacture a fuel cell that has lower manufacturing and operating cost than conventional PEM fuel cells and that uses inexpensive, abundant and non-volatile zinc as its fuel, rather than hydrogen which is volatile and is difficult to distribute and store. Accordingly, our business objective is to develop ZAFC fuel cells that we will target for those segments of the power generation market that we believe will be most ready to accept a ZAFC fuel cell as an acceptable alternative to conventional sources of power. Based on our initial mapping of market opportunities, two markets show an immediate need that can be addressed in the short (next 24 months) to medium (24 to 48 months) term:

- Mobile electronic devices are an emerging $6.5 Billion application opportunity for fuel cells. As devices increase in functionality, the larger screens, faster processors and extended RAM all require more power. This applies to cell phones, smart phones, laptop PCs and almost every portable device. For the more than 50 Million mobile workers in the US, these energy hungry devices have become mission critical and running out of power is not an option.
- Power outages are becoming more and more frequent and widespread. Too often we are witnessing apartment and home occupants inconvenienced and in fact put into dangerous situations due to power outages caused by storms and technical failures. Residents are forced to cope with no lights, no heat, no information, spoiled food, and no working appliances for hours, days or even weeks at a time. Back-up generators are the current solution, but these generators cannot be used indoors, are noisy and polluting, heavy and messy. No back-up solution is offered whatsoever for apartment residents unless the whole building is backed up with a large diesel or natural gas generator.

In the medium to long term (48 to 72 months), we anticipate the steady emergence of hybrid electric vehicles which will require low cost, safe, rechargeable batteries or powerpacks, and the long term eventual emergence of fuel cell powered vehicles requiring safe, reliable, cost effective fuel cells. Currently, hybrid vehicles are using nickel metal hydride batteries, and much development is being done to improve lithium based batteries to make them safer and less costly for this application. Zinc air offers an excellent alternative to lithium as zinc is abundant, relatively inexpensive, intrinsically safe, and sustainable (recyclable for use over and over again). Recent publications by independent third parties have identified zinc air as the most logical choice for hybrid electric vehicles. We recognize this long term opportunity and we are positioning to participate in this market with technology development initiatives which are intended to result in rechargeable zinc air powerpacks and batteries for this application.

Anticipated Markets for Fuel Cells

Fuel cells have not yet reached the stage where they have achieved widespread commercial adoption. As such, we believe that the market for fuel cells is in its early stages and is still developing. Based on industry experience to date, and learning from the experience of other fuel cell manufacturers, particularly PEM fuel cell based companies where prototypes have been tested in a variety of applications, we believe that the markets for fuel cell based products will evolve as follows:

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First-to-Market:  Occasional use products, such as generator and battery substitutes for industrial, residential, and personal back-up power solutions, with low operating lifetime requirements:

| | Emergency and mobile power packs
Emergency generators for residential and small business
Uninterruptible Power Supply ("UPS") back-up (PC's, Servers, Data Centres)
Telecom, Utility, Cable TV and Commercial Building back-up
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Next-to-Market:

| | Alternate Power Units ("APUs") that power non-drive train functions for trucks, boats, RV's, and Military vehicles.
Seasonal (i.e.: cabins, cottages) and special events power supply units.
Light mobility fleet units such as forklifts, golf carts, scooters, airport ground support vehicles, military vehicles, small hybrid vehicles.
Hybrid electric vehicles.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Last-to-Market:

| | Co-Generation - residential or commercial heating and electricity supply using the existing natural gas (or other) infrastructure and reformers.
Grid replacement and "peaker" products.
Fuel cell automobiles
Large and Heavy Vehicles - e.g. Buses
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our Fuel Cell Technology

Until recently, we held rights to the ZAFC technology pursuant to a limited exclusive patent license agreement between Power Air Tech and Lawrence Livermore National Security, LLC ("LLNS") dated October 15, 2007 (the "License Agreement"). Under the terms of the License Agreement, LLNS granted to Power Air Tech an exclusive, non-transferable, royalty-bearing license to make, use, sell, offer for sale and import products that incorporate the licensed patents in the United States and worldwide where the patent rights to the technology exist. The license rights were limited to a "field of use" described as the zinc air fuel technology for stationary and mobile applications. LLNS also granted to Power Air Tech the right to issue royalty-bearing sublicenses to third parties to the zinc air fuel technology for stationary and mobile applications. Our agreement with LLNS terminated on November 3, 2009.  Since then we have developed new, next generation ZAFC designs.  We have a patent pending with respect to this new design, as follows:

United States and Canada Patent Pending



|Invention Disclosure Number | Patent Number | Title                                         | Inventors                        | Issue Date
|--------------------------- | ------------- | --------------------------------------------- | -------------------------------- | ----------
|5334                        | P5910005/4    | Electrolyte  Management in Zinc / Air Systems | Gregory Roberts / Rehmanji Irfan | Pending   



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Our Fuel Cell Technology

The Zinc Air Fuel Cell

Our fuel cell technology is a metal oxide fuel cell using simple physical chemistry. It uses a combination of atmospheric oxygen and zinc pellets in a liquid alkaline electrolyte mixture referred to as an "electrolyte" to generate electricity. The by-products from the chemical reaction are zinc oxide and potassium zincates. The electrolyte used in the ZAFC fuel cells is potassium hydroxide, a chemical which is readily available in commercial quantities. In operation, the fuel cell consumes all of the zinc and is operationally quiet, providing instantaneous stable electrical energy with zero greenhouse gas emissions.

Power Air Corp engineers achieved significant breakthroughs in the designing of a new, second generation ZAFC which we believe will patentable by Power Air Corp. The current, self-feeding design incorporates a hopper from which the zinc pellets, less than one millimeter in size, feed through a restricted opening into a cell to react with the flowing electrolyte during operation. The size of the lightweight fuel cell stack determines power (measured in kilowatts); the electrolyte reserve tank (together with the amount of zinc in the hopper) determines the total energy capacity (measured in kilowatt-hours) and operational cycle of the device.

The ZAFC Stack

The zinc-air fuel cell is constructed in a modular form of unit cells known as a ZAFC stack. The ZAFC stack forms the base platform component of our planned products. The ZAFC stack incorporates individual unit cells into a stack of fuel cells in a configuration that will enable us to specifically design, engineer, and package and brand a range of products that can be targeted at a range of applications suitable for the customers' requirements. By designing and incorporating ZAFC stacks into our products, we will be able to provide customized power/energy requirements.

The ZAFC stack is constructed in a modular form of unit cells, each of which is made up of a hopper, a self-feeding galvanic cell with air and refueling ports. The hoppers in each cell act as buffers to protect the air electrodes during refueling and handling. The cells are joined or molded together in a fuel stack module that is connected to an electrolyte storage tank that contains the electrolyte and discharge products. Each cell contains a lightweight plastic frame, a current collector, and a paper-thin air electrode. The plastic frame extends upwards to create a hopper which can hold additional zinc pellets that are fed into the cell as the zinc is used up in the cell. The lightweight cells generate the power from the ZAFC stack. The size of the lightweight fuel cell stack determines power (measured in kilowatts); and the electrolyte reserve tank (together with the amount of zinc in the hopper) determines, the total energy capacity (measured in kilowatt-hours) and operational cycle of the device.

The ZAFC system components are divided into five categories:

- air cathodes;
- cell frames and stand-offs;
- current collector, metal plates and discs;
- controllers, pumps and blowers; and
- containers and filters.

The stack module is connected to an electrolyte storage tank containing electrolyte and discharge products, a blower to circulate air, a pump to circulate the electrolyte through the cells and over the zinc, and several other ancillary components depending on the specific application.

In operation zinc pellets are pushed along the base of horizontal fill tubes by the flowing electrolyte. The zinc pellets flow through slots to load each individual cell situated above the reaction cell.

The very narrow cell openings allow the particles to feed informally into the cell to form an open, loosely packed structure, which permits the oxidation of the zinc and easy flow of electrolyte. The electrolyte flows upward through the cell and hopper to remove heat and reaction by products.

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The ZAFC based devices are self-contained and the electric power required to drive the ancillary air and electrolyte pumps is negligible, consuming less than four percent of the fuel cell stacks gross output.

The ZAFC has refueling capability in that the invariant materials (zinc and electrolyte) can be replaced during the discharge cycle. Topping up of ZAFC's electrolyte storage tank and zinc hopper can be performed in minutes. The residual zinc oxide can be recycled.

Recycling and Recovery of Fuel

During operation, zinc is converted into zinc oxides that are retained in the electrolyte. At any period during discharge zinc can be recovered from the electrolyte and recycled for later re-use. The zinc is not consumed, in the sense of gasoline or diesel; rather, it operates as a carrier of electrical energy. Residual zinc oxide created during this process can be recycled back into reusable zinc (via electrolysis) so that it can again be processed into pellets and fed into the ZAFC stack.

Zinc oxides can be recycled to form new zinc by electrolysis using a simple process, which may be incorporated in the overall system or sited at a central or service station location.

There are zinc recovery systems using other processes that may be adaptable to our purposes with less development.

Advantages of our Zinc Air Fuel Cell Technology

We believe that our ZAFC technology offers a unique combination of advantages over alternative competing technologies and power solutions. These advantages include:

- Economical Energy Source. We currently estimate that fuel cell products based on our ZAFC technology offer can be manufactured and marketed at lower costs than can be achieved for conventional PEM fuel cell power solutions. We believe that lower manufacturing and marketing costs will result in products based on our ZAFC technology being able to be competitively priced against incumbent technologies. The low capital cost of the ZAFC is as a result of its simple design and low operating temperature which allow the majority of components to be conventionally sourced and combined with low-cost fabrication techniques. In addition, the consumables used comprise zinc and potassium hydroxide, both of which are inexpensive and easily sourced.
- High Specific Energy. The ZAFC has an energy output of approximately five to six times that of lead acid batteries of the same weight.
- Rapid Refueling and Continuous Use. Products incorporating our ZAFC technology can be designed to be rapidly refuelable through an exchange of electrolyte and addition of zinc pellets, rather than being slowly recharged using electricity. This will allow products incorporating our ZAFC technology to be used for applications requiring near continuous use.
- Environmental - Zero Airborne Emissions. Products incorporating our ZAFC technology will not produce any significant airborne emissions. The reaction by-product, zinc-oxide, is retained in the electrolyte and can be recycled via electrolysis.
- Technology Safety Issues. Products incorporating our ZAFC technology will not face the safety, distribution, storage and sitting issues inherent in competing technologies, such as PEM fuel cells and generators that rely on flammable and explosive fuel types such as hydrogen orgasoline.

Development of our Zinc Air Fuel Cell Technology

Historical Development

Our ZAFC technology development started with a joint collaboration effort between Lawrence Livermore National Laboratory (LLNL) and the United States Department of Energy. LLNL is a leading United States Government research and development facility located in Livermore, California. LLNL created the ZAFC using internal support and additional support from the International Lead Zinc Research Organization and the U.S. Department of Energy. Prior to September 30, 2005, over $6.0 million had been invested in the technology. From 1992 to 1997, LLNL and the DOE spent over $1 million on the original research concept and development of the ZAFC. Between 1998 and 2005, our now largest shareholders invested a further $5 million to bring the ZAFC to the prototype level. In the fiscal years ended September 30, 2006, 2007 and 2008, approximately $772,000, $1,316,000 and $1,352,000 was spent, respectively, in the development, engineering and testing of the technology. In our fiscal year ended September 30, 2009, we spent approximately $251,000 the further development, engineering and testing of this technology.

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Current State of Development

The following development of the technology and product concepts for ZAFC has been ongoing or completed to date:

|Phase | Description                                                      | Development Work
Completed by:                                                       | Dates Work Completed
|----- | ---------------------------------------------------------------- | ------------------------------------------------------------------------------------ | --------------------
|0     | Initial Development of Zinc Air unit                             | LLNL, the Department of Energy and the International Lead Zinc Research Organization | 1995                
|1     | Patenting of cell design                                         | LLNL                                                                                 | 1995 and 1996       
|2     | Experimentation with various air cathodes and sealants           | LLNL and PAT                                                                         | 1998                
|3     | Completion of multi-cell ZAFC unit for demonstration             | LLNL and PAT                                                                         | 2000                
|4     | Proof of Power Curve - successful testing of ZAFC                | LLNL, PAT and Argonne National Laboratories                                          | 2001                
|5     | Product Concept 
-   ZAFC-based Emergency 
     Backup Generator | Power Air Corporation                                                                | 2006 / Q3           
|6     | Program Concept 
-   ZAFC-based Emergency 
     Backup Generator | Power Air Corporation                                                                | Ongoing             
|7     | New 2nd &3rd generation of ZAFCs                                 | Power Air Corporation                                                                | 2009 / Q4 ~ On Going
|8     | Manufactured Catalysts for Air Cathode                           | Power Air Corporation                                                                | 2009 / Q4~ On Going 
|9     | Inventing Catalysts & Air Cathode Testers                        | Power Air Corporation                                                                | 2009 / Q4           
|10    | Developing Electrolyte filtering systems                         | Power Air Corporation                                                                | 2009 / Q4~ On Going 

As a result of the completion of this development work, we have developed and configured initial prototypes based on individual ZAFC cell stacks (with an electrolyte storage tank to form a six-cell or twelve-cell basic unit). We have established in principal that a single cell can be configured with off-the-shelf electronics to provide 5V output at up to 2W and with a 40Wh capacity. In addition, stacks of six or twelve full-size ZAFC cells can be linked together (or scaled) to provide the desired power and energy capacity for a particular application. We have not experienced any adverse chemical or electrical side-effects as a result of combining fuel cells into stacks; however, we plan to continue testing and monitoring of these issues as we proceed with further development.

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ZAFC Portable Emergency Generator

We will continue to focus technology resources on the development of our core ZAFC product as capital permits. We envision ZAFC products would be manufactured and marketed by an original equipment manufacturer or contract manufacturer under agreement with us. Our initial ZAFC product will initially be targeted to OEMs delivering power solutions to the business and residential backup and emergency power segment.

We will design our initial prototype for OEM integration into a ZAFC-based portable emergency generator designed for back-up or emergency use in homes and small businesses. This generator will be designed to be suitable for use both indoors (as it will not generate emissions) and outdoors. The generator will be designed to generate AC power at a rated power output of 1.25 or 2.5 Kilowatts, and to run for four to six hours continuously at fully rated power when fully fuelled.

We plan to complete the following development work in order to achieve this objective:

|Phase | Description of 
Development Phase | Description of Development Work                                                                                                                                                                                                                               | Planned Timing
|----- | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------
|11    | Program Concept                   | We plan to complete the matching of engineering requirements and performance on key areas including electrolyte capacity and air cathode life - in parallel market opportunities with less stringent requirements will be evaluated and pursued if attractive | 2010 / Q1-Q2  
|12    | Engineering Prototype             | With input of an OEM, we plan to complete the design, manufacture and testing of an engineering prototype incorporating our ZAFC fuel cell technology                                                                                                         | 2010 / Q3     
|13    | Engineering Verification          | This phase will consist of further construction and field testing of engineering prototypes                                                                                                                                                                   | 2010 / Q4     
|14    | Manufacturing Prototype           | With input from a manufacturing partner, we plan to design a commercial product with product design freeze and quality plan                                                                                                                                   | 2010 / Q4     
|15    | Manufacturing Verification        | This phase will consist of the construction and beta testing of manufacturing prototypes and completion of plan for launching the product into the market-place (Certification-UL/ CSA)                                                                       | 2011 / Q1     
|16    | Pilot Production                  | This phase will consist of manufacturing pilot units of the product and confirmation that our initial required cost and quality targets have been met                                                                                                         | 2011 / Q2     
|17    | Develop 5KW Generator             | This phase will consist of R&D and manufacturing 5KW Generator                                                                                                                                                                                                | 2011 / Q4     
|18    | Develop 20KW Generator            | This phase will consist of R&D and manufacturing of 20KW Generator that can be incorporate into electric vehicle.                                                                                                                                             | 2012 / Q4     



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The above timetable is an estimate prepared by our management based on our plans and objectives as they presently exist, and there are a number of contingencies that could cause our timetable not to be met.

It should be noted that certain core technology development projects will be conducted in parallel with the core ZAFC stack commercialization to ensure the ongoing development of intellectual property, reduce the reliance on third party suppliers for key components, and extend the potential applications for ZAFC technology. One such project that has been identified is the "Zinc Air Cathode" project. The output of such projects may be two to three years in the future but will open up additional market sectors through extended lifetime and lower costs. In all cases, we will make best efforts to ensure that our direct spending on such projects will be minimized through the use of government grants, tax incentives and co-development with other parties.

Zinc Air Cathodes

Historically, air cathodes for all of our developments have been sourced from various third party vendors. The air cathode is a critical component in terms of performance, reliability and cost of any zinc air system. To date, we have found at least two vendors whose initial performance and projected costs meet target specifications. Concerns arise when looking at lifetime operating requirements, and being dependent on third parties for supply of a critical component of our end-user products. It is therefore seen as strategic to invest in the design of an air cathode specifically suited to our zinc air environment. In addition, this air cathode would be a product unto itself, giving us intellectual property protection and an additional revenue stream through licensing or product sales.

As such, we have established an air cathode development project in collaboration with the National Research Council's Institute for Fuel Cell Innovation in Vancouver. This project was announced in December, 2007, and project work began in January, 2008. The two-year project will be partially subsidized by the NRC, the Industrial Research Assistance Program (IRAP) and Scientific Research & Experimental Development tax credits. The project is designed to deliver a specialized electrode design (catalyst and support structure) that meets all target product specifications for Portable Emergency and UPS & Telecoms backup and also represents "patentable" intellectual property. Ideally a lower cost, better performing, and longer lifetime primary air cathode would result, suitable for use in our Indoor Generator.

At the end of 2009, we developed and manufactured our own catalyst that we believe is an improvement over what is currently available on the market. Over the next few months, we intend to test and collaborate with a Gas Diffusion Layer (GDL) manufacturer to create custom air cathode for our specific needs.

Subsequent Product Development

Assuming successful implementation of the 1.25 and 2.5 kW Portable Emergency Generator units, work will begin on a parallel path to develop UPS & Telecoms as well and Small Fleet products, as per OEM specifications/requirements.

Our ability to complete our current development work and this future development work will be subject to our ability to obtain the necessary financing to fund this development work. Further, our success in developing our initial product will be critical in enabling us to proceed to future development work. We may be forced to abandon plans for future development work if our initial product is not successful or we do not achieve the required financing.

In undertaking our development work, our intention is to continuously enhance our product range and to develop new generations of products. However, we do not plan to divert resources from the initial OEM module development unless significant investment in an alternative application is provided by an OEM. We plan to retain a strategic role in the assembly and distribution of products, which will ensure continuity of product service and quality for customers.

In undertaking our development work, we plan to outsource materials handling and manufacturing of components to existing component manufacturers. The aim of this strategy is to minimize capital costs in the setting up of manufacturing plants and to provide us with flexibility in sourcing of components and compliance of design specification rules in each country.

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Prototyping and Testing

As we update the ZAFC design and complete our development work, we anticipate that many of the core components and materials will change. Each variation will require extensive single-cell and unit testing as well as forensic work. While it is reasonable to acquire some test and lab apparatus (load banks, etc.), we believe that many of the environmental tests may be more cost effectively undertaken in conjunction with a third party.

Manufacturing

We anticipate that manufacturing of any commercial products incorporating our core ZAFC cell or stack technology will be undertaken by an OEM or a contract manufacturer under agreement with us. At the same time, design of the products, especially design of the core ZAFC stack for the manufacturing prototype, will require extensive input from not only experienced designers and engineers, but also from experienced production staff. On September 27, 2006, we entered into a four phase Development and Pre-Manufacturing Agreement (the "Mid States Agreement") with Mid States Tool and Machine Inc. of Decatur, Indiana ("Mid States"). Mid States is an established plastics tooling and machining company that has advanced computer aided design and manufacturing capability to allow for the easy iteration of designs during the prototyping phase. Pursuant to the Mid States Agreement, Mid States will re-design, cost-reduce, tool and manufacture the ZAFC. It is still intended that Mid States will be one of our contract manufacturers for the initial ZAFC cells for use in our ZAFC commercial products in North America.

Development, Engineering and Testing Facilities

In the third quarter of 2009, we moved our primary research and development facility to Vancouver, B.C., Canada from Livermore, California.  We believe that we will have access to a very talented pool of engineers at greater value in Vancouver. This facility accommodates personnel required to implement the application design, development and commercialization phases of the ZAFC system. We plan to carry out the majority of our development and engineering work at our Vancouver facility.

Marketing & Sales

We plan to focus on delivering ZAFC based products and systems to the market in collaboration with OEMs and/or contract manufacturers. Our plan is to identify and enter into strategic relationships with OEMs and/or contract manufacturers that are interested in pursuing the commercialization of products incorporating our ZAFC technology. Partnering is expected to reduce the time required to commercialize our technology as it offers the ability to:

- leverage market intelligence, specifications requirements, systems integration and product development expertise;
- leverage the customer base for field trial activities and feedback;
- leverage product design, certification and regulatory approval expertise; and
- leverage marketing, sales, distribution, installation and service capabilities.

By partnering, our objective will be to avoid duplicating costly, already existing tooling, manufacturing, distribution, service and support infrastructures, thus enabling us to focus on cost reduction and improvement of our core technology offering.

For the ZAFC products, we plan to support the OEM systems integration, product development, codes and standards, and testing activities and participate with OEMs in end-user field trials.

We also plan to continue developing strategic relationships with a fuel solution business partner, and to collaborate with this partner to implement a fuel supply, distribution, siting, re-fueling logistics, and re-cycling business model. Commercialization of our zinc based product may be an important development for the zinc industry. Our product may represent a substantial new fuel market for zinc that zinc companies could supply to. The process of recycling the zinc, through electrolysis, could also offer a major sustainable revenue producing opportunity to companies in the zinc industry.

We also plan to develop market awareness for the ZAFC through identifiable brand imaging by introducing our new  logo (with or without text) on all systems, similar to "INTEL inside".



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We plan to focus our marketing efforts on establishing relationships with major organizations, and we intend to pursue a Business 2 Business approach and target trade press in order to promote these relationships. We also plan to promote our technology via press releases and editorial write-ups in trade publications. We anticipate that the primary promotional and marketing effort will be performed in conjunction with our OEM, contract manufacturer, distributor, and zinc strategic partners.

Patents and Licenses

Power Air Corporation will not patent any patentable technologies until we are ready to commercialize our products. We have one patent that is pending in the USA and in Canada. Also, we have identified several additional patentable designs in the course of developing our core ZAFC technology and are in the process of filing additional provisional patent applications, but there can be no assurance that any of these provisional patents will be issued or that the provisional patent applications will not be challenged.

Government Approvals

One of our objectives will be to establish relationships with relevant regulators, government and industry agencies in regard to the endorsement of our technology and products. In particular, we plan to seek to align our technology and products in order to qualify for grants and assistance programs directed at end-users wishing to adopt clean power alternatives.

Government Regulation

If we are to introduce products incorporating our ZAFC designs into the marketplace, we will have to obtain Underwriters Laboratory and/or CSA International certifications for North America, and CE certifications for Europe and Asia prior to being able ship or install any product. Accordingly, we plan to design all products that we develop so that they will be able to pass all major certifications (North America, Europe, Asia) with the same design. The expense associated with this government regulatory compliance will be incorporated into the costs for the design and development of our products.

At this time, we do not know what additional requirements, if any, each jurisdiction will impose on our product or its installation. We also do not know the extent to which any new regulations may impact our ability to distribute, install and service our product. Once our product reaches the commercialization stage and we begin distributing our systems to our early target markets, the federal, state or local government entities may seek to impose regulations.

Competition

We face competition from a number of companies, some of which are larger and have greater resources than we do.  Our competitors in the fuel cell industry include, among others, Medis, Plug Power, Revolt, Fuel Cell Energy, Inc., Electric Fuel Corporation, and PowerZinc Corporation. In addition, we will be attempting to displace established technology such as alkaline, lithium and lead-acid batteries and internal combustion engines in many of the markets we enter; however, many other companies are established in these markets with greater resources than we have.

ZAFC Emergency Generator Competition

Incumbent portable generators from McCullough, Briggs & Stratton, Coleman and Honda are well priced at between $120 and $600 per kW for the end-user product.  However, the higher end, quieter models such as the Honda EU3000 are premium priced and in greatest demand for home use. In addition to virtually silent operation, Power Air's ZAFC-based products will have the advantages of indoor siting, no emissions, no fire hazard, no explosion hazard, no burn hazard (i.e.: to touch it when in operation), and recyclable fuel. To compete against incumbent portable generators, the OEM will have to offer the end-user a product at a reasonable premium, considering the advantages above, compared to the higher end portable generator price.

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To compete against higher end fossil fuel portable generators, at an average of about $600 per kW, we believe a "Green" OEM alternative needs to deliver 1500+ hours of lifetime, 4 to 6 hours run-time at full load, and an end user price of:

- Introduction:                      $1000 - $1200 per kW
- Market Penetration:           $800 - $1000 per kW
- Mass Market:                    $600 - $800 per kW

Employees

As of March 31, 2010, we had eight full-time employees and no part-time employees.

Subsidiaries

We own 100% of the issued and outstanding share capital of Power Air Tech, Inc., which was formed under the laws of the State of Delaware in October of 1997. We also own 50% of the issued and outstanding shares of Power Air (Canada) Corp., which was formed under the laws of the Province of British Columbia, Canada, on December 12, 2005. Power Air (Canada) Corp. is considered a variable interest entity due to our control over the operations and 100% funding of costs to date, and thus is considered a 100% consolidated subsidiary.

Plan of Operations

As more fully described under Item 1 "Business" above, our objective is to commercialize the ZAFC technology to the stage where the technology can be incorporated into ZAFC products that can be manufactured and sold for use as the power supply commercial applications.  Smaller and shorter run-time products are, in general, easier to bring to market provided that miniaturization is not required.

Subject to receipt of sufficient financing, our specific plan of operations over the next twelve months is to continue improve the design of, and to manufacture ZAFC prototypes that can be commercialized with OEM partners. We plan to continue development work on a ZAFC based portable emergency generator designed for back-up or emergency use in homes and small businesses.

In order to complete development of commercial products, we will have to complete the following phases of development:

- completion of technology development required to complete a "technology transfer" to product development ;
- completion of the design, manufacture and testing of engineering prototypes ;
- completion of the design, manufacture, testing and certification of manufacturing prototypes ; and
- pilot production of commercial products.

Subject to the receipt of sufficient financing, we plan to spend approximately $3 million over the next twelve months in carrying out our plan of operations.  At March 31, 2010, we had cash of $36,898 and a working capital deficit of $483,382.  As such, we will need significant financing to pursue our plan of operations.  We intend to raise additional equity financing to continue our technology and product development projects, to fund the manufacturing and packaging of our initial inventories, and to expand our engineering and sales/marketing headcount.  However, we do not currently have such financing in place and there is no assurance we will be obtain to obtain sufficient financing.

Results of Operations

The following sets table sets out our consolidated losses for the periods indicated:

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|                              | Three Months 
Ended March 31, 2010 | Three Months 
Ended March 31, 2009 | Six Months 
Ended 
March 31, 2010 | Six Months 
Ended March 31, 2009 | From October 
15, 1997 (Date 
of Inception) 
March 31,2010
|----------------------------- | ---------------------------------- | ---------------------------------- | --------------------------------- | -------------------------------- | ----------------------------------------------------------
|Expenses                      |                                    |                                    |                                   |                                  |                                                           
|Depreciation and amortization | $26,950                            | $26,145                            | $52,452                           | $52,321                          | $306,976                                                  
|Development and engineering   | 109,132                            | 170,787                            | 266,619                           | 293,422                          | 5,895,550                                                 
|General and administrative    | 215,671                            | 346,897                            | 385,900                           | 686,350                          | 12,191,946                                                
|License fees                  | -                                  | 3,425                              | -                                 | 28,425                           | 650,297                                                   
|Marketing and selling         | -                                  | 14,954                             | 11,985                            | 30,432                           | 1,668,078                                                 
|Interest and finance fees     | 19,642                             | 477                                | 20,788                            | (1,726)                          | 3,461,202                                                 
|Total Expenses                | 371,395                            | 562,685                            | 737,744                           | 1,089,224                        | 24,174,049                                                
|Loss before other items       | (371,395)                          | (562,685)                          | (737,744)                         | (1,089,224)                      | (24,174,049)                                              
|Other items                   |                                    |                                    |                                   |                                  |                                                           
|Write down of equipment       | -                                  | -                                  | -                                 | -                                | 48,968                                                    
|Write down of inventory       | -                                  | -                                  | -                                 | -                                | 13,945                                                    
|Gain on debt settlement       | -                                  | -                                  | -                                 | -                                | (13,556)                                                  
|Interest and other income     | -                                  | (350)                              | -                                 | 750                              | (44,926)                                                  
|                              | -                                  | (350)                              | -                                 | 750                              | 4,431                                                     
|Net Loss                      | $(371,395)                         | $(563,035)                         | $(737,744)                        | $(1,088,474)                     | $(24,178,480)                                             

Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

We recorded a net loss of $371,395 for the three months ended March 31, 2010 as compared to a net loss of $563,035 for the three months ended March 31, 2009.  The decrease in net loss was primarily due to a decrease in general and administrative expenses between these two periods.

Development and engineering expenses decreased to $109,132 for the three months ended March 31, 2010 from $170,787 during the three months ended March 31, 2009.  This decrease was due to our reduced operations between these two periods.

General and administrative expenses totaled $215,671 for the three months ended March 31, 2010 as compared to $346,897 for the three months ended March 31, 2009.  This decrease was the result of fewer employees and lower professional fees.

Six Months Ended March 31, 2010 Compared to the Six Months Ended March 31, 2009

We recorded a net loss of $737,744 for the six months ended March 31, 2010 as compared to a net loss of $1,088,474 for the six months ended March 31, 2009.  The decrease in net loss was primarily due to a decrease in general and administrative expenses and marketing and selling expenses between these two periods.

Development and engineering expenses decreased to $266,619 for the six months ended March 31, 2010 from $293,422 during the six months ended March 31, 2009.  This decrease was due to our reduced operations between these two periods.

General and administrative expenses totaled $385,900for the six months ended March 31, 2010 as compared to $686,350for the six months ended March 31, 2009.  This decrease was the result of fewer employees and lower professional fees.

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Liquidity and Capital Resources

The following table sets forth our cash and working capital as of March 31, 2010 and September 30, 2009:



|                          | As of March 31, 2010(Unaudited) | As of September 30, 2008(Audited)
|------------------------- | ------------------------------- | ---------------------------------
|Cash reserves             | $36,898                         | $424,235                         
|Working capital (deficit) | $(483,382)                      | $(928,326)                       

We must be able to raise additional working capital in order to have enough working capital to restart our various projects to then become a revenue generating company.

Going Concern

We currently have no sources of revenue to provide incoming cash flows to sustain future operations. Our ability to emerge from the development stage with respect to any planned principal business activity is dependent upon whether we are successful in efforts to enter into OEM joint venture agreements, to raise additional equity financing and generate revenue, cash flow and attain profitable operations. There can be no assurance that we will be able to complete any of the above objectives. In particular, if we are not able to raise additional capital, these objectives will not be met. These factors raise substantial doubt regarding our ability to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis, which implies that we will continue to realize assets and discharge liabilities in the normal course of business. As at March 31, 2010 we had accumulated net losses of $24,178,480 since inception with $36,898 cash on hand and a $483,382 working capital deficit. Our financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Net Cash Used In Operating Activities

Operating activities for the six months ended March 31, 2010 used cash of $822,240, compared to $512,580 for the six months ended March 31, 2009, which reflects our recurring losses. Operating activities have primarily used cash as a result of the development and engineering of our technology, marketing and trade shows and administrative and fund raising activities.

Net Cash Used In Investing Activities

Investing activities used $75,097 for the six months ended March 31, 2010, as compared to $30,036 for the six months ended March 31, 2009.  This cash was used to purchase equipment.

Net Cash Provided by Financing Activities

As we have had virtually no revenues since inception, we have financed our operations primarily by using existing capital reserves, entering into settlements with debtors, obtaining debt financing and through private placements of our common shares.  Net cash provided by financing activities during the six months ended March 31, 2010 was $510,000, as compared to $Nil during the six months ended March 31, 2009, as a result of proceeds from the issuance of our common stock.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

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We believe that our critical accounting policies and estimates include the accounting for accounts receivable, marketable securities and long-lived assets reclamation costs, and accounting for legal contingencies.

Variable Interest Entity

On May 31, 2006 the Company's inactive Canadian subsidiary, Power Air (Canada) Corp. was 50% owned by a Canadian resident individual and 50% owned by the Company. On June 1, 2006 this subsidiary became active and Power Air (Canada) Corp. began conducting scientific research and experimental development activities in Canada ("SR&ED") and claiming for Canadian Scientific Research and Experimental Development tax credits. The Company funds 100% of the expenditures and is at risk for 100% of its losses, and as a result is the party with the controlling financial interest and the primary beneficiary. Power Air (Canada) Corp. has no other financing other than amounts received from Power Air Corporation. The Company has controlling financial interest and is the primacy beneficiary of Power Air (Canada) Corp., which is determined to be a variable interest entity.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, the reported amounts of fair value of stock based compensation and other stock based payments. Actual results could differ from those estimates.

Development and Engineering Expenditures

Due to the Company's lack of revenues and forecast of significant capital required to develop products and a market for its products, the net realizable value of prototype material and intangible assets is not reasonably determinable. Accordingly, all research and development expenditures including the costs of prototype material and the cost of obtaining intangible assets such as patents, have been charged to operations.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. At March 31, 2010, the Company had no cash equivalents.

Financial Instruments

Financial instruments, which include cash, other current assets, accounts payable and advance from related party were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Currently, the Company operates in Canada therefore it exposed to foreign exchange risk.

Income Taxes

Deferred income taxes are provided for tax effects of temporary differences between the tax basis of asset and liabilities and their reported amounts in the financial statements. The Company uses the liability method to account for income taxes, which requires deferred taxes to be recorded at the statutory rate expected to being in effect when the taxes are paid. Valuation allowances are provided for a deferred tax asset when it is more likely than not that such asset will not be realized.

Management evaluates tax positions taken or expected to be taken in a tax return. The evaluation of a tax position includes a determination of whether a tax position should be recognized in the financial statements, and such a position should only be recognized if the Company determines that it is more likely than not that the tax position will be sustained upon examination by the tax authorities, based upon the technical merits of the position. For those tax positions that should be recognized, the measurement of a tax position is determined as being the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

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Stock-Based Compensation

The Company has estimated the fair value of each award as of the date of grant or assumption using the Black-Scholes option pricing model, which was developed for use in estimating the value of traded options that have no vesting restrictions and that are freely transferable. The Black-Scholes option pricing model considers, among other factors, the expected life of the award and the expected volatility of the Company's stock price.

Foreign Currency Translation

The Company's functional and reporting currency is the United States dollar. Foreign currency transactions mainly occur in Canadian currency. Monetary assets and liabilities denominated in Canadian dollars are translated into United States dollars at rates of exchange in effect at the balance sheet date. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in Canadian currencies are translated at rates of exchange in effect at the date of the transaction. Any gain or loss on foreign currency translation is included in operations. To date, such amounts have not been significant.

Property and Equipment

Depreciation is provided on all property and equipment utilizing the straight-line method over their estimated useful lives of five years, except leasehold improvements, which are amortized over the term of the lease.

Recently Adopted Accounting Standards

In June 2009, the FASB issued the Accounting Standards Codification, which establishes a sole source of U.S. authoritative generally accepted accounting principles (GAAP). The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into approximately ninety    accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance.  The Company adopted the Codification in the quarter ended September 30, 2009.

Recent Accounting Standards Not Yet Adopted

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for the Company beginning July 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. We believe adoption of this new guidance will not have a material impact on our financial statements.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3.             Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.             Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Dr. Kwang Seop Jung, our principal executive officer, and Seidal Bae, our principal financial officer, have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report, based on their evaluation of these controls and procedures required by paragraph (b) of Rules 13a-15 and 15d-15, due to the material weakness in our internal control over financial reporting as reported in our Annual Report on Form 10-K for our year ended September 30, 2009, as previously filed with the SEC, specifically:  1) inadequate segregation of duties consistent with control objectives; (2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of certain US GAAP and SEC disclosure requirements; and (3) ineffective controls over period end financial disclosure and reporting processes.

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As previously disclosed in our Annual Report on Form 10-K for our year ended September 30, 2009, we are committed to improving our financial organization. As funds become available, we will undertake to: (1) create a position to segregate duties consistent with control objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function, and (3) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

There have been no changes in our internal controls over financial reporting that occurred during our most recent quarterly period that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1.             Legal Proceedings

We currently are not a party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

Item 1A.           Risk Factors

Not required because we are a smaller reporting company.

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

Pursuant to a private placement approved by our Board of Directors on March 8, 2010, on April 1, 2010 the Company issued 233,333 units at a subscription price of $0.45 per unit for proceeds of $105,000 to two subscribers. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.45 per share until March 8, 2011. The units were issued to the subscribers under an exemption from the registration requirements of the U.S. Securities Act pursuant to Regulation S based on representations and warranties made by the subscribers in their respective subscription agreements with the Company.

On March 8, 2010 our Board of Directors also approved the issuance of 11,111 shares at a deemed issuance price of $0.45 per share for total deemed proceeds of $5,000 to one subscriber as a finder's fee in connection with the $0.45 unit private placement described in the preceding paragraph.  The shares were issuedon April 1, 2010 to the subscriber under an exemption from the registration requirements of the U.S. Securities Act pursuant to Regulation S based on representations and warranties made by the subscriber in its subscription agreement with the Company.

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Pursuant to a private placement approved by our Board of Directors on March 8, 2010, on April 1, 2010 the Company issued 50,000 units at a subscription price of $0.20 per unit for proceeds of $10,000 to one subscriber. Each unit consists of one share of common stock and one non-transferable share purchase warrant. Each warrant entitles the holder to purchase an additional share of common stock at an exercise price of $0.20 per share until March 8, 2011. The units were issued to the subscriber under an exemption from the registration requirements of the U.S. Securities Act pursuant to Regulation S based on representations and warranties made by the subscriber in its subscription agreement with the Company.

On March 8, 2010 our Board of Directors approved the issuance of 976,665 shares at a deemed issuance price of $0.20 per share for total deemed proceeds of $195,333 to five subscribers in settlement of outstanding debt to such subscribers.  The shares were issued on April 1, 2010.  The shares were issued to four of the subscribers under an exemption from the registration requirements of the U.S. Securities Act pursuant to Regulation S and to the remaining subscriber under an exemption from the registration requirements of the U.S. Securities Act pursuant to Rule 506 for accredited investors, in each case based on representations and warranties made by the subscribers in their respective subscription agreements with the Company.  Four of the subscribers were directors of the Company at the time the issuancewas approved by the Board of Directors.  The remaining subscriber was a former director of the Company.

Item 3.             Defaults Upon Senior Securities

None.

Item 4.              (Removed and Reserved)

Not Applicable.

Item 5.             Other Information

None.

Item 6.             Exhibits



|Exhibit
Number | Description of Exhibit                                                                                                                                                                                                                                                                                                    
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | Articles of Incorporation, as amended. (1)                                                                                                                                                                                                                                                                                
|3.2            | Bylaws. (2)                                                                                                                                                                                                                                                                                                               
|10.1           | Share Exchange Agreement among the Company, the Vendor, Power Air, the HDH Group and Dean Haley, dated for reference effective on August 22, 2005. (3)                                                                                                                                                                    
|10.2           | Limited Exclusive Patent License Agreement between the Regents of the University of California and Power Air Tech, Inc., dated March 2001. (4)                                                                                                                                                                            
|10.3           | Development and Pre-Manufacturing Agreement dated September 27, 2006 between the Company and Mid States Tool and Machine Inc. (5)                                                                                                                                                                                         
|10.4           | 2006 Stock Incentive Plan. (6)                                                                                                                                                                                                                                                                                            
|10.5           | Financing Agreement dated March 4, 2007 among the Company, Paulson Investment Company, Inc. and High Capital Funding, LLC (including the form of the Secured Promissory Note, the form of the Equity Consideration Certificate, the form of the Security Agreement and the form of the Security and Pledge Agreement). (7)
|10.6           | Form of the Subscription Agreement between the Company and each of the purchasers for the April 2007 Note and the Equity Consideration Certificates. (7)                                                                                                                                                                  
|10.7           | Form of the $0.35 Unit Private Placement Subscription Agreement between the Company and each of the purchasers of the Units under the June 2007 Private Placement Offering. (8)                                                                                                                                           
|10.8           | Form of the Non-U.S. Share Purchase Warrant Certificate utilized with the June 2007 Private Placement Offering. (8)                                                                                                                                                                                                       
|10.9           | Form of the $0.10 Unit Private Placement Subscription Agreement between the Company and the purchaser of the Units under the May 2008 Private Placement Offering. (9)                                                                                                                                                     



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|10.10 | Form of the Share Purchase Warrant Certificate utilized with the May 2008 Private Placement Offering. (9)                                                                                      
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|21.1  | Subsidiaries of the Company:
     Power Air Tech, Inc. (Delaware) (100%) 
     Power Air (Canada) Corp. (British Columbia) (50%)                                                               
|31.1  | Certification of Chief Executive Officer. (filed herewith)                                                                                                                                     
|31.2  | Certification of Chief Financial Officer. (filed herewith)                                                                                                                                     
|32.1  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)

(1)  Previously filed with the SEC as an exhibit to our Form 10-K as originally filed with the SEC on January 13, 2010.
(2)  Previously filed with the SEC as an exhibit to our Registration Statement on Form SB-2 as originally filed with the SEC on December 2, 2004.
(3)   Previously filed with the SEC as an exhibit to our Current Report on Form 8-K as originally filed with the SEC on October 7, 2005.
(4)   Previously filed with the SEC as an exhibit to our Form SB-2 as originally filed with the SEC on June 12, 2006.
(5)   Previously filed with the SEC as an exhibit to our Form 10-KSB as originally filed with the SEC on January 10, 2007.
(6)   Previously filed with the SEC as an exhibit to our Form S-8 as originally filed with the SEC on July 3, 2006.
(7)   Previously filed with the SEC as an exhibit to our Form 8-K as originally filed with the SEC on April 16, 2007.
(8)   Previously filed with the SEC as an exhibit to our Form 8-K as originally filed with the SEC on June 11, 2007.
(9)   Previously filed with the SEC as an exhibit to our Form 8-K as originally filed with the SEC on May 20, 2008.





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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



POWER AIR CORPORATION

By:  /s/ Kwang Seop JungKwang Seop Jung
President Chief Executive Officer and a director
Date: May 14, 2010





By:  /s/ Seidal BaeSeidal Bae
Secretary, Chief Financial Officer and a director
Date: May 14, 2010