UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K



[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

for the year ended April 30, 2011



[ ]Transition report Pursuant to Section 13 or 15(d) of
the Exchange  Act



Commission File Number:   333-116324



ROTOBLOCK CORPORATION

(Name of Small Business Issuer In Its Charter)



Nevada                                                                             20-08987999

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



300 B Street, Santa Rosa, CA.                      
         95401

(Address of principal executive offices)            
    (Zip Code)



(707) 578-5220

(Issuer's Telephone Number)



Securities registered under
Section 12(b) of the Exchange Act:

Title of each class registered:  None                               
Name of each exchange on which registered:   None



Securities registered under Section 12(g) of the Exchange
Act:

Common Stock, par value $.001

(Title of class)





Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.    YES       NO [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.    YES      NO 
[X]





Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§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  [X]





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



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



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



Indicate by check mark whether the registrant is a shell company as defined
in Rule 12b-2 of the Exchange Act.

Yes  [  ]   No [ X ]



We had no revenues for the fiscal year ended April 30, 2011.



As of April 30, 2011, there were 5,710,311 shares of the Registrant's
$0.001 par value common stock issued and outstanding. Our common stock is listed and traded on the NASD OTC Bulletin Board
under the symbol RTBC. The aggregate market value of  voting common stock held by non-affiliates of the Registrant (2,555,978
shares), computed by reference to the closing price on April 30, 2011 ($2.00 per share), is approximately $5,111,956.



Some exhibits required to be filed hereunder, are incorporated herein by reference
to Issuer's original Form 10-SB Registration Statement, filed under CIK No. 0001295923 on July 6, 2004, on the SEC website at
www.sec.gov.





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Available Information



Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports that we file with the U.S. Securities and Exchange Commission (SEC) are available
at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation
of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.



































2











TABLE OF CONTENTS





|         | PART I                                                                                                               | Page
|-------- | -------------------------------------------------------------------------------------------------------------------- | ----
|ITEM 1.  | Description of Business                                                                                              | 4   
|         |                                                                                                                      |     
|ITEM 1A. | Risk Factors                                                                                                         | 9   
|         |                                                                                                                      |     
|ITEM 1B. | Unresolved Staff Comments                                                                                            | 11  
|         |                                                                                                                      |     
|ITEM 2.  | Description of Properties                                                                                            | 11  
|         |                                                                                                                      |     
|ITEM 3.  | Legal Proceedings                                                                                                    | 11  
|         |                                                                                                                      |     
|         | PART II                                                                                                              |     
|ITEM 5.  | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
    Purchases of Equity Securities | 12  
|         |                                                                                                                      |     
|ITEM 6.  | Selected Financial Data                                                                                              | 16  
|         |                                                                                                                      |     
|ITEM 7.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                | 16  
|         |                                                                                                                      |     
|ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk                                                           | 18  
|         |                                                                                                                      |     
|ITEM 8.  | Financial Statements and Supplementary Data                                                                          | 18  
|         |                                                                                                                      |     
|ITEM 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                 | 18  
|         |                                                                                                                      |     
|ITEM 9A. | Controls and Procedures                                                                                              | 19  
|         |                                                                                                                      |     
|ITEM 9B. | Other Information                                                                                                    | 19  
|         |                                                                                                                      |     
|         | PART III                                                                                                             |     
|ITEM 10. | Directors, Executive Officers and Corporate Governance                                                               | 20  
|         |                                                                                                                      |     
|ITEM 11. | Executive Compensation                                                                                               | 21  
|         |                                                                                                                      |     
|ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                       | 22  
|         |                                                                                                                      |     
|ITEM 13. | Certain Relationships and Related Transactions, and Director Independence                                            | 23  
|         |                                                                                                                      |     
|ITEM 14. | Principal Accounting Fees and Services                                                                               | 23  
|         |                                                                                                                      |     
|         | PART IV                                                                                                              |     
|ITEM 15. | Exhibits                                                                                                             | 24  
|         |                                                                                                                      |     
|         | Signatures                                                                                                           | 24  
|         |                                                                                                                      |     
|         | Consolidated Financial Statements                                                                                    | 25  





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PART I

Item 1.  Description of Business



General



Rotoblock Corporation was incorporated in the State of Nevada on March 22,
2004. We were formed to engage in the development and licensing of an Oscillating Piston Engine (OPE) and are still in the development
stage. We have not yet generated any revenues since inception and have incurred net operating losses of $8,090,959 since inception.
We do not own any real estate. Our auditors have raised substantial doubt about our ability to continue as a going concern. We
cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or be able to raise
additional equity capital if and when needed; however, based on our prior demonstrated ability to raise capital, we believe that
our capital resources will be adequate to continue operating maintaining our business operations for the fiscal year ending April
30, 2012. However, if we are unable to raise additional capital in the near future, due to our liquidity problems, we may have
to curtail our operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.



We maintain our statutory registered agent's office in Carson City, Nevada
and our business offices and testing laboratory in Santa Rosa, California.



Acquisition of Patented Rights and Technology



On March 30, 2004, we acquired Rotoblock, Inc., a privately-held Canadian corporation
(the Subsidiary), which holds an option entitling it to acquire all of the  rights, title and interest in and to a patented
technology and prototype engine in exchange for shares of our restricted common stock, valued at $0.001 per share. The terms
of the Option are as follows:



We acquired all of the issued and outstanding shares of Rotoblock Inc. by issuing
300,000 shares of our common stock. Since the transaction resulted in the former shareholders of  Rotoblock Inc. owning all
of the issued shares of Rotoblock Corporation, the transaction has been treated for accounting purposes as an acquisition by Rotoblock
Inc. of the net assets and liabilities of Rotoblock Corporation. Under this purchase method of accounting, the results of operations
of Rotoblock Corporation are included in the consolidated financial statements.



For a consideration of $100,000, plus interest at the rate of 24% per annum
calculated from January 31, 2004 to the date of payment, paid on May 31, 2004, the inventor and an unrelated third party, Dr.
Monti Farrell granted us, through our wholly-owned subsidiary, Rotoblock, Inc., an option to acquire the patent rights to the
engine technology. The option grants us the rights to further develop, market and sell the final engine product or to license
the technology to third-party manufacturers. In addition, the option grants us the right and option to purchase the patents for
$1,000,000, if purchased by December 2, 2005 (not paid), or for $1,500,000, if purchased within 36 months after payment of the
initial deposit (June 2, 2007). On October 25, 2006, we negotiated an extension to exercise the Option by 37 months. Pursuant
to the terms of the amended option agreement, we must pay a royalty of $50 per engine on the sale of up to 10,000 engines, a 
royalty of $20 per engine on the sale of up to 100,000 engines and a royalty of $2 per engine thereafter. At April 30, 2011, no
engines have been sold.



We currently do not own the patents or rights underlying the patents, but rather,
have been granted the use thereof and an option to purchase the rights. Pursuant to the terms of the agreement, the option may
also be assigned to a third party without consent of the Estate of the Optionor.



Rotoblock Corporation had a net asset deficiency at the acquisition date, therefore,
the 300,000 common shares issued on acquisition were issued at a fair value of $Nil with the net asset deficiency of $138 charged
to deficit. Rotoblock Inc. is deemed to be the purchaser for accounting purposes.  Accordingly, its net assets are included
in the consolidated balance sheet at their previously recorded amounts.



All of our operations relating to the development and marketing of the OPE
technology are conducted by Rotoblock, Inc., incorporated on September 2, 2003 under the laws of Canada.  We are currently
in the process of improving on the technology to make the engine more efficient, economical and environmentally friendly in an
effort to make it attractive to engine manufacturers to either acquire the technology or negotiate license agreements to use the
technology. We have made several changes to the prototype engine.  All parts except the crankshaft and engine block have
been redesigned.



We are continuing our research, development and testing efforts until we are
certain we have completed the best, most efficient model.  This goal will be considered to be reached when the engine demonstrates
a power to weight ratio of 2:1.



The Oscillating Piston Engine Technology (OPE)



The OPE patented internal combustion engine is different than conventional
reciprocating engine technology in that the current oscillating piston design incorporates four pairs of pistons. Each of these
eight pistons is alternately attached, through two oppositely rotating adjacent discs, to two coaxial drive shafts extending from
the center of one face of the cylinder block. Each piston is attached to a single disc such that four non-adjacent pistons are
rigidly affixed to the upper disc and the remaining four to the lower. Each concentric shaft is attached, respectively, to the
connecting discs. The discs, in turn, couple the motion of the oscillating pistons to a single crankshaft, via a dual scotch yoke
mechanism. Each piston is a segmented toroidal section traveling within the closed toroidal chamber of the cylinder block.





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The round cylinder block containing the pistons, connecting discs and coaxial
output shafts is free to continuously rotate in a counter clockwise direction. It is caused to revolve ninety degrees for every
complete revolution of the rotating crankshaft. This action is accomplished by a four-to-one ratio gear reduction mechanism which
couples the two components together.



Rotation of the cylinder block causes a pair of intake and exhaust ports, as
well as two diametrically positioned spark plugs, to regularly appear in the intervening spaces formed between the faces of the
pistons as they oscillate backwards and forwards between the limits of allowed travel within the toroidal cylinder. When in operation,
the diametrically opposed inlet ports in the cylinder block are supplied with a combustible fuel/air mixture through an attached
intake manifold, such that the separating opposing piston pairs each draws in a fresh charge mixture as the rotating cylinder
block passes through the first of four combustion cycles.



The second cycle begins as the same piston pairs reach their limits of travel,
reverse direction and proceed to compress the charge mixture captured between their faces. Compression continues until the approaching
piston faces reach their closest point at the end of their range of travel.



The third cycle starts with the appearance of the spark plugs in the intervening
space between the moving pistons just at the point in the cycle when they make their closest approach to each other.  At
this juncture, timed firing of the spark plugs ignites the compressed charge mixture confined between the faces of each of the
two piston pairs. The exploding fuel/air mixture is rapidly heated and expands, thereby forcing the opposing piston pair faces
apart and, by so doing, produces the power cycle. The force applied to the separating pistons by the expanding gas is coupled,
through the two connecting discs, to the scotch yokes, which, in turn cause the continuous rotation of the crankshaft and output
shaft.



As the cylinder block continues to rotate, the fourth cycle begins. Next, exhaust
ports appear between the piston pairs coincident with their change of direction at the end of the power stroke. The approaching
piston faces now expel the burnt exhaust gases through the exhaust ports. This brings to a close the final cycle of the four cycle
sequence.



The endless repetition of these four combustion cycles produces sixteen power
strokes for each revolution of the cylinder block. Momentum stored in the inertial mass of the rotating cylinder block substitutes
for the action of the flywheel found in conventional reciprocating engine designs.



Simplicity of Design, Assembly and Repair



The OPE engine is comprised of four major mechanical sub-assemblies. Each sub-assembly
can be easily removed from the engine, allowing for rapid factory assembly and easy replacement or field servicing. We believe
this feature should permit the engine to be totally field maintainable, to the degree that a major overhaul should be able to
be completed by a qualified mechanic using only conventional hand tools in just a few hours. The simple design of the engine should
also help reduce the costs of manufacturing because of the reduced parts count. In addition, the elimination of a valve train
and liquid cooling system components in the oscillating piston engine design should lessen the engine's complexity, which could
further reduce costs to achieve overall engine efficiency. We are currently still in the testing and development stages of the
engine design and as a result, have not yet completed the final prototype for further testing.



Departure from conventional engine design, resulting in fewer moving parts,
has allowed us to produce an engine with reduced frictional losses, which if proven in testing, could lead to increased reliability,
improved performance and longer engine life. As is typical with mechanical systems, simplicity is the key to a successful design.
In keeping with this philosophy, the OPE engine uses standardized components, common to the  industry, wherever possible.



There is no certainty, however, that our research and development activities
will result in a marketable engine that:



- can be assembled more quickly than a conventional engine;





5







- is easier to service in the field;



- is totally field maintainable; or



- will reduce the costs of manufacturing.



Versatility of Use



The OPE engine has been specifically designed to maximize versatility of use.
The engine's extreme horsepower to weight ratio, when finally tested and proven, could lend itself useful to a wide variety of
both industrial and consumer applications. The advantage of having high power-to-weight ratio and air-cooled design fits perfectly
with the specialized requirements of many recreational vehicles and portable power tools. Here, engines in the range of several
hundred to several thousand horsepower are employed to power electric generators, pumps and compressors, as well as a wide variety
of other industrial and agricultural types of machinery.  If we are successful in completing our proposed model and technology,
it could be an ideal choice for applications such as these.



Environmental Impact



The OPE design is totally valve-less. As such, there are no moving intake or
exhaust valves to limit combustion temperature, as with typical internal combustion engines.  If we are successful in developing
an operational engine on this basis, it would  allow the engine to be operated with a leaner fuel/air mixture and a consequent
higher combustion temperature. The result would be  increased Carnot cycle efficiency when used with gasoline or similar
hydrocarbon fuels. Carnot cycle efficiency is the ratio of the output work to the input heat.  Leaner mixture and higher
combustion temperature promotes more complete oxidation of the burning fuel, which would reduce carbon monoxide emission, while
increasing efficiency and reducing fuel consumption for a given equivalent power output.  While there is no guarantee we
will be successful in developing an operational engine on this basis, we will attempt to make the engine's environmental impact
minimal.



Research, Development and Testing Since Acquisition



We have conducted a number of test runs with the engine and are continuing
to improve upon the technology. The milestones we have set for ourselves have been reached and we are in the process of discussing
potential joint ventures and/or co-development arrangements with qualified manufacturers. We are researching technologies that
could be used in conjunction with the OPE, therefore enhancing the uses for this unique engine. The market has a need for technologically
advanced and efficient propulsion systems, be they straight mechanical or hybrid in nature. One of the greatest challenges when
incorporating hybrid technology into a vehicle is space limitation. Due to the projected high power-to-weight ratio of the OPE,
at a given horsepower output OPE technology will result in a smaller, more compact engine, hence being ideally suited for such
applications. We have also been contacted by manufacturers in the following areas who feel that the OPE exhibits attributes and
characteristics that would benefit their product lines:



|-      High power marine outboard motors
|----------------------------------------



|-      Auxiliary-power units for the trucking industry
|------------------------------------------------------



Patents and Trademarks



On March 30, 2004, we acquired Rotoblock, Inc., a privately-held Canadian corporation,
which holds an option entitling it to acquire all of the rights, title and interest in and to the following patents:



|Name of Patent                                                                   | Patent #  | Issue Date | Expiration Date
|-------------------------------------------------------------------------------- | --------- | ---------- | ---------------
|                                                                                 |           |            |                
|Oscillating Piston Engine -                                                      | 5,222,463 | 6/29/1993  | 6/28/2010      
|This patent covers the basic Oscillating Piston Engine OPE,
    all of its parts |           |            |                
|and functionality                                                                |           |            |                
|                                                                                 |           |            |                
|Oscillating Piston Engine for Driving a Ducted Fan -                             | 5,303,546 | 4/19/1994  | 4/18/2011      
|This patent covers the application of the OPE as a
    means of driving a        |           |            |                
|ducted fan (e.g., aircraft, boat, hovercraft, etc.)                              |           |            |                
|                                                                                 |           |            |                
|Oscillating Piston Engine for an Electrical Charging System                      | 5,323,737 | 6/28/1994  | 6/27/2011      
|for Electrically Powered Vehicles -                                              |           |            |                
|This patent covers any applications for an OPE powering an
    electric          |           |            |                
|charging system for an electrically powered vehicle (e.g.,
    a hybrid vehicle) |           |            |                
|                                                                                 |           |            |                
|Oscillating Piston Engine for Pumping System -                                   | 5,324,176 | 6/28/1994  | 6/27/2011      
|This patent covers applications for the OPE being used to
    power              |           |            |                
|pumping systems.                                                                 |           |            |                
|                                                                                 |           |            |                
|Oscillating Piston Engine for Helicopters -                                      | 5,467,744 | 11/28/1995 | 11/20/2012     
|This patent covers applications for the OPE as a power source
    to power       |           |            |                
|helicopters                                                                      |           |            |                
|                                                                                 |           |            |                





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Competition



The industry in which we operate is intensely competitive with respect to new
and evolving technologies on a continuous basis. In addition, there are many well-established competitors with substantially greater
financial and other resources, including but not limited to established businesses with loyal customers. We will rely heavily
on our new and developing engine technology to acquire a competitive edge.  We have determined that some of our largest competitors
will be Honda, Briggs & Stratton, Tecumseh, Kawasaki, Kohler and Stihl, the major producers of general purpose engines. 
Because of our intensive battle for market share among these companies, we will also be contacting these manufacturers anticipating
that they will want to include our OPE technology in their product lines. There are always new and emerging technologies in the
industry in which we compete; however, we are unaware of any other new types of engines being developed with our OPE products
and technology will compete at this time.



Marketing of Technology and/or Rights



Our marketing efforts will be focused on selling manufacturing licenses or
rights to use the technology. Sale of the technology rights would be preferred, as the administration and enforcement of licensing
agreements can be very complex and costly.



The combustion engines we see today have experienced years of relentless development.
Manufacturers have aimed to make engines more efficient, more durable, and in some cases lighter. Also, recently, great efforts
are being made in reducing environmentally damaging emissions.



We consider it important that a new engine concept be introduced in a low-key
manner and in applications that are not mission-critical in order to build a reputation of reliability over time. We intend to
pursue a marketing strategy that primarily targets manufacturers of general purpose engines and secondarily, manufacturers of
engines used in recreational vehicles, such as outboard motors and other weight critical uses. A review of the general purpose
engine market is presently underway. To date it has been determined that several large companies, such as Honda, Briggs &
Stratton, Tecumseh, Kawasaki, Kohler and Stihl, dominate the industry. Initially, we intend to focus our marketing efforts on
these 6 largest manufactures of general purpose engines. The manufacturers produce engines for a large variety of applications,
including portable chain saws, weeding machines, portable turbo generators, portable crushers, portable arc welders and generators,
snow blowers, lawn mowers and air and gas compressors, among others.



Because of the anticipated high power to weight ratio and the intensive battle
for market share, we are hopeful that we will be successful in convincing one or more of these and other not so well known small
engine manufacturers to include our OPE technology in their product offerings.



Articles in appropriate trade journals, prominent newspapers and direct marketing
campaigns will be used to promote the OPE technology. We will also send out special invitations, solicit inquiries and encourage
visits to our laboratory and testing facilities for the purpose of demonstrating the engine and its technology to potential customers
to demonstrate the engine and its unique technology, educate the potential buyer/licensee and establish essential relationships.



We intend to expand our marketing efforts to the marine outboard motor industry,
as well as other small engine applications used in the recreational and other markets, such as snowmobiles, small water craft
such as Seadoos and all-terrain vehicles.  We are confident that a high power to weight ratio engine, similar to our proposed
product design will fit into a large area of applications.



With the successful test run of the OPE, we have conclusively proven the viability
of the engine concept. Current events and the needs of international markets to capitalize on technological advances in propulsion
technology immediately have necessitated an expansion of our mission. Global supply issues of conventional fuels and rapid advances
of software and electric control, measurement and communication techniques have changed the competitive environment. Thus, we
are concentrating on licensing the OPE technology to all available markets. Concurrently we are inviting new technologies that
may be used in conjunction with the OPE in order to be able to eventually offer complete propulsion and/or power generating systems
to the market.





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Government and Industry Regulation



Since it is our intention to develop the engine to a point where the
technology can be sublicensed to a third party manufacturer for production, we don't anticipate being subject to any
government or industry regulations in our testing and development processes. We have not yet been required to obtain any
licenses and/or permits and are not aware of any health or environmental rules and/or regulations that apply to our
development activities. However, new laws, rules and/or regulations may be implemented in the future that we are currently
unaware of and we may be required to comply with such laws, rules and/or regulations. Difficulties in obtaining or failure to
obtain required licenses and approvals could result in delays in the development of our final prototypes in each
phase.



Employees and Employment Agreements



At present, we have 3 full time employees, which include all of our officers
and directors, who work on a full time or as-needed basis. We presently do not have pension, health, annuity, insurance, 
profit sharing or similar benefit plans; however, we may adopt such plans in the future.  There are presently no personal
benefits available to any officers, directors or key employees. However, the Company has issued stock and share purchase warrants
to directors and officers for their services.



Significant Events Subsequent to Fiscal Year Ended April 30, 2011







On May 10, 2011, we entered into a share exchange agreement
with daifuWaste Management Holding Limited (“Daifu”), a limited liability company incorporated in the Cayman
Islands and headquartered in Beijing, China. Pursuant to the terms of the agreement, we issued 52,922,812 common shares of
Rotoblock to the stockholders of Daifu in exchange for all of the issued and outstanding common shares of Daifu. As a result
of the exchange, Daifu became our wholly-owned subsidiary.





Daifu is a leading provider of medical waste disposal management in China,
supplying advanced medical waste equipment, systems, disposal and management.  Founded in 2003 by Dr. Michael Choy with
offices in Beijing, Shanghai, Shenzhen and Hong Kong, daifuWaste operates through its direct Chinese subsidiaries marketing Daifu
brand medical waste treatment systems, with ten systems currently in operation throughout China. Daifu’s client base consists
of hospitals and non-hospital medical establishments, including Hospital No. 302 in Beijing, a major medical institution in China.  In
2008, Daifu donated a mobile medical waste treatment system to aid Sichuan province after the area suffered a massive earthquake.
Daifu’s medical waste treatment non-incinerated systems offer a safer and more efficient alternative to managing medical
waste. Unlike incinerators, which can release dangerous substances into the air, Daifu’s system eliminates the risk of dioxins
and consumes less energy.  The equipment works under high-pressure and high-temperature and uses recycled steam to sterilize
and disinfect the medical waste. After treatment, the medical waste is non-recognizable and harmless, ready for landfill.  The
technology is also more efficient and environmentally-friendly with lower maintenance costs and fully compliant with international
health standards.



On July 14, 2011, we cancelled a total of 3,334 shares of common stock
previously issued in error and we are in the process of obtaining another 3,334 common shares to be returned to treasury for
cancellation.



On August 4, 2011, we cancelled a total of 1,818,181 common shares previously
issued in error.









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Item 1A. Risk Factors



Our securities are highly speculative and involve a high degree of risk, including
among other items the risk factors described below. You should carefully consider the following risk factors and other information
in this 10-K before deciding to invest in our securities.



RISKS RELATED TO OUR BUSINESS:



Due to Our History of Operating Losses, We are Uncertain That We Will Be
Able to Maintain Sufficient Cash to Accomplish Our Business Objectives.



The consolidated financial statements included herein have been prepared assuming
that we will continue as a going concern. During the fiscal year ended April 30, 2011, we suffered net losses of $946,223, or
$0.18 per share. There is no assurance that we can successfully complete our prototype OPE engine or that we will ever generate
revenues. The consolidated financial statements do not include any adjustments relating to the recoverability and classification
of assets or the amounts and classification of liabilities that might be necessary should we be unsuccessful in implementing our
plans.



The small engine industry is highly competitive and our technology may not
be well received or successful.



The small engine industry is highly competitive with respect to technology,
performance, quality and availability of service/parts. There are numerous well-established competitors, including national, regional
and local small engine manufacturers and distributors who have substantially greater financial, marketing, personnel and other
resources than our company.  There can be no assurance that we will be able to respond to various competitive factors affecting
our industry and technology. The need for small engine equipment is also generally affected by changes in consumer preferences,
national, regional and local economic and environmental regulations and demographic trends.  Prior to our acquisition of
the engine and technology, it experienced a critical mechanical failure and was disassembled to investigate the cause of the problem.
Failure analyses showed metal fatigue to be the cause of the critical component having failed. It was subsequently determined
that choice of materials specified in the original design was ultimately the cause of the failure. A replacement component was
re-specified and fabricated from a more suitable material. There can be no assurance that we will be able to successfully develop
our proposed technology sufficient to create our planned model or, that if developed, it will suitably pass future testing and
not fail again. If we are unable to successfully compete in the development and marketing of our finished product, we may be unable
to generate any revenues and you could suffer a total loss of any investment you make in our securities.



We may be unable to protect the proprietary rights to the technologies,
patents and intellectual property, which may hamper our ability to license and/or sell the manufacturing rights to the technology,
thereby impacting our ability to earn revenues and become profitable.



Our success and ability to compete depend in part on the protection of the
patents to the technology. We rely on patent and copyright laws to protect the intellectual property that was developed and have
an option to acquire several patents on the technology. However, such laws may provide insufficient protection. Moreover, other
companies may develop products that are similar or superior to our prototype engine,  or may copy or otherwise obtain and
use proprietary information we develop or use without our authorization. If a third party were to violate one or more of the patents
or the new technology we develop, we may not have the resources to bring suit or protect the intellectual property underlying
the patents. In the event of such a violation or if a third party appropriated any of our unpatented technology, such party may
develop and market technology and/or products which we intend to develop and/or market. We would lose any revenues, which we would
otherwise have received from the sale or licensing of that technology or those products. This could prevent our ever making a
profit on any licensing and/or sale of any technology or products we develop.



We do not currently own the intellectual property underlying the engine's technology,
but rather, have an option agreement to use the technology. Our business plans are to develop the technology and build a prototype
engine that can be sub-licensed to third party manufacturers for amounts sufficient to generate the funds to purchase the patent
rights subject of the option agreement;  however, if we are unable to do so prior to the expiration date of the option, we
would need to raise additional capital through loans or equity sales. We cannot guarantee that we will ever develop a successful
prototype or that, if successfully developed, we will be able to sublicense the rights to any manufacturer for production and
sale. As a result, we may never have the funds to purchase the patents, which would result in a total failure of our business
and a complete loss of any investment you make in our securities.







9







Policing unauthorized use of the patents, proprietary and other intellectual
property rights could entail significant expense and could be difficult or impossible. In addition, third parties may bring claims
of copyright or trademark infringement against us or claim that certain of our processes or features violate a patent, that we
have misappropriated their technology, or formats or otherwise infringed upon their proprietary rights. Any claims of infringement,
with or without merit, could be time consuming to defend, result in costly litigation, divert management attention and/or require
us to enter into costly royalty and/or licensing arrangements to prevent further infringement on the technology we develop or
use, any of which could increase our operating expenses and thus prevent us from becoming profitable.



Our competitive position also depends upon unpatented trade secrets. Trade
secrets are difficult to protect. Our competitors may independently develop proprietary information and techniques that are substantially
equivalent to the technology we use, or otherwise gain access to trade secrets we develop surrounding the engine development,
such as through unauthorized or inadvertent disclosure of our trade secrets. If this occurs, our competitors may use our processes
or techniques to develop competing products and bring them to market ahead of us. This could prevent us from becoming profitable. 
As a result of any of the aforementioned circumstances, you could suffer a total loss of any investment you make in our securities.



We may not be able to successfully develop a marketable product.



We cannot guarantee that we will be able to successfully complete an engine
that meets the specifications we have set forth and are attempting to develop. Our final product may not function as we believe
it will; its projected potential applications may be limited; and it may never be a viable product. If we are unable to successfully
develop the engine technology as planned and it is not functional or commercially attractive to third parties, we may never be
able to license the technology or sell the rights to manufacture our products. In such event, we would not be able to generate
any revenues and any investment you made in our securities would be a total loss.



The loss of our current management would make it very difficult for us to
continue our proposed business plans.



Investors must rely upon the ability, expertise,  judgment, discretion,
integrity and good faith of our management and directors. Our success is highly dependent on our current management, key personnel
and key consultants. The unexpected loss or departure of any of these parties could be detrimental to our future success. We do
not maintain key man insurance on our management.



RISKS RELATING TO OUR COMMON STOCK:

We have numerous outstanding warrants which may adversely affect the price of our common stock.



We have reserved 9,281,160 shares of our common stock for issuance upon
exercise of outstanding warrants at prices between $0.25 and $12.50 per share.  Any sale into the public market of our
common stock purchased privately at prices below the current market price could be expected to have a depressive effect on the
market price of our common stock.



Future sales of our common stock may cause our stock price to decline.



Our stock price may decline by future sales of our shares or the perception
that such sales may occur. If we issue additional shares of common stock in private financings under an exemption from the registration
laws, then those shares will constitute "restricted shares", as defined in Rule 144 under the Securities Act of 1933
(the "Act"). The restricted shares may only be sold if they are registered under the Act, or sold under Rule 144, or
another exemption from registration under the Act.



Some of our outstanding restricted shares of common stock are either eligible
for sale pursuant to Rule 144 or have been registered under the Act for resale by the holders. We are unable to estimate the amount,
timing or nature of future sales of outstanding common stock. Sales of substantial amounts of our common stock in the public market
may cause the stock's market price to decline.



We do not expect to pay dividends.



We have not paid dividends since inception on our common stock and we do not
contemplate paying dividends in the foreseeable future in order to use all of our earnings, if any, to finance expansion of our
business plans.





10









Lack of trading market may make it difficult to sell our common stock.



Our common stock is only traded on the NASD OTC Bulletin Board and
is defined as a "penny stock" by rules adopted by the U.S. Securities and Exchange Commission. As such, brokers and
dealers effecting transactions in our common stock with or for the account of a customer must obtain the written consent
of the customer prior to purchasing the common stock, must obtain certain information from the customer, and must provide certain
disclosures to such customer. These requirements may have the effect of reducing the level of trading in the secondary market,
if any, of our common stock and reducing the liquidity of the common stock.



Our stock price can be extremely volatile.



Since our common stock is only traded on the NASD OTC Bulletin Board, an investor
may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, the common stock. There
can be no assurance that an active public market will continue for our common stock, or that the market price for our
common stock will not further decline below its current price. Such price may be influenced by many factors, including, but not
limited to, investor perception of us and our industry and general economic and market conditions. The trading price of our
common stock could be subject to wide fluctuations in response to announcements of our business developments or those of our competitors,
quarterly variations in operating results, and other events or factors. In addition, stock markets have experienced extreme price
volatility in recent years. This volatility has had a substantial effect on the market prices of companies, at times for reasons
unrelated to their operating performance. Such broad market fluctuations may adversely affect the price of our common stock.



Item 1B. Unresolved Staff Comments



None.



Item 2. Properties



We do not own any property.



We currently are using office space located at 300 B Street in Santa Rosa,
California. The space consists of approximately 1,000 sq ft.  We currently have a lease agreement with Schellinger Brothers,
an unrelated third party, for corporate office space. The lease term is renewable annually. We believe that this arrangement is
suitable given the nature of our current operations, and also believe that we will not need to lease additional space for at least
the next 12 months.



Item 3. Legal Proceedings





None.





Item 4. Removed and Reserved



11





PART II



Item 5.   Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.



Market Information



Our common stock is traded on the NASD OTC Bulletin Board under the symbol
RTBC. The following table sets forth the high and low closing prices of the common stock during the periods indicated for the
fiscal years ended April 30, 2011 and 2010, as reported by Nasdaq. The quotations below reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.





|               |  | Fiscal 2011     |      |                |  | Fiscal 2010   |      |                
|-------------- |  | --------------- | ---- | -------------- |  | ------------- | ---- | ---------------
|               |  | High Sale Price |      | Low Sale Price |  | Closing Price |      | High Sale Price
|               |  |                 |      |                |  |               |      |                
|Fourth Quarter |  | $               | 2.00 |                |  | $             | 1.01 |                
|Third Quarter  |  | $               | 2.20 |                |  | $             | 0.55 |                
|Second Quarter |  | $               | 2.50 |                |  | $             | 0.60 |                
|First Quarter  |  | $               | 2.99 |                |  | $             | 0.78 |                







The closing price of our common stock as reported by the
OTCBB on August 11, 2011 was $0.55 per share.



Common Stock and Preferred Stock

Common Stock



Our authorized capital stock consists of 200,000,000 shares of common stock,
par value $0.001 per share and 50,000,000 shares of preferred stock, par value $0.001 per share.



The holders of our common stock (i) have equal ratable rights to dividends
from funds legally available therefor, when, as and if declared by our Board of Directors; (ii) are entitled to share ratably
in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our
affairs; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions
or rights; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.



Non-cumulative Voting



Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of
the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect
any of our directors.



12









Supermajority Quorum



Section 3.8 of our Bylaws allow our Board of Directors to establish supermajority
voting provisions. A supermajority quorum is a requirement that more than a majority of the directors in office constitute a quorum;
and a voting requirement is one which requires the vote of more than a majority of those directors present at a meeting at which
a quorum is present to be the act of the directors. As a result, because our current affiliates control the Board and have a majority
of the voting power of the securities outstanding, those affiliates could amend our Bylaws to make it more difficult for other
stockholders to assert influence over corporate decision making.



Dividends



We have not declared or paid cash or other dividends on our common stock
since inception. We currently have no plans to pay any dividends, although we may do so if our financial position changes.



Share Purchase Warrants



On July 15, 2009, we filed a Form S-8 Registration Statement with the SEC to
register 100,000 shares of our common stock for future issuances to consultants, employees, attorneys, officers and directors
at a proposed maximum offering price of $7.50 per common share; a complete copy of the S-8 can be found on the SEC website at
www.sec.gov under our SEC File Number 333-116324.



Appropriate adjustments were made to the outstanding, unexercised warrants,
exercise prices and in the number of shares subject to each outstanding warrant as a result of our reverse stock split (1:50) effective
February 3, 2009.



The following share purchase warrants were outstanding at April 30, 2011:





|         |  | Exercise
    price |  | Number
        of warrants |  | Remaining
        contractual life (years)
|-------- |  | ------------------ |  | -------------------------- |  | ------------------------------------------
|         |  | $                  |  |                            |  |                                           
|         |  |                    |  |                            |  |                                           
|Warrants |  | 7.50               |  | 50,000                     |  | 0.61                                      
|Warrants |  | 12.50              |  | 7,600                      |  | 1.36                                      
|Warrants |  | 7.50               |  | 20,000                     |  | 1.92                                      
|Warrants |  | 7.50               |  | 16,000                     |  | 2.03                                      
|Warrants |  | 12.50              |  | 3,333                      |  | 2.18                                      
|Warrants |  | 0.25               |  | 25,000                     |  | 3.21                                      
|Warrants |  | 0.25               |  | 25,000                     |  | 3.23                                      
|Warrants |  | 0.50               |  | 200,000                    |  | 3.23                                      
|Warrants |  | 2.50               |  | 57,144                     |  | 3.23                                      
|Warrants |  | 0.25               |  | 2,181,750                  |  | 3.79                                      
|Warrants |  | 1.00               |  | 50,000                     |  | 3.79                                      
|Warrants |  | 0.25               |  | 333,333                    |  | 3.83                                      
|Warrants |  | 1.00               |  | 300,000                    |  | 3.88                                      
|Warrants |  | 0.25               |  | 12,000                     |  | 3.96                                      
|Warrants |  | 0.25               |  | 6,000,000                  |  | 8.89                                      
|         |  |                    |  |                            |  |                                           
|         |  |                    |  | 9,281,160                  |  |                                           







13





The following is a summary of warrant activities for the fiscal years ended April 30, 2011 and 2010:



|                                                                    |  | Number of warrants |  | Weighted average exercise
    price
|------------------------------------------------------------------- |  | ------------------ |  | -----------------------------------
|                                                                    |  |                    |  | $                                  
|                                                                    |  |                    |  |                                    
|Outstanding and exercisable at May 1, 2009                          |  | 169,467            |  | 15.97                              
|Granted                                                             |  | 9,192,227          |  | 0.30                               
|Exercised                                                           |  | -                  |  | -                                  
|Expired                                                             |  | -                  |  | -                                  
|                                                                    |  |                    |  |                                    
|Outstanding and exercisable at April 30, 2009                       |  | 9,361,694          |  | 0.58                               
|                                                                    |  |                    |  |                                    
|Weighted average fair value of warrants granted
    during the year |  | 0.12              
|                                                                    |  |                    |  |                                    
|Outstanding and exercisable at May 1, 2010                          |  | 9,361,694          |  | 0.58                               
|Granted                                                             |  | 30,000             |  | 0.25                               
|Exercised                                                           |  | (51,334)           |  | 0.25                               
|Expired                                                             |  | (59,200)           |  | 12.50                              
|                                                                    |  |                    |  |                                    
|Outstanding and exercisable at April 30, 2011                       |  | 9,281,160          |  | 0.38                               
|                                                                    |  |                    |  |                                    
|Weighted average fair value of warrants granted
    during the year |  | 1.10              







The weighted average grant date fair value of warrants issued during the year
ended April 30, 2011 amounted to $1.10 per warrant (April 30, 2010 - $0.12 per warrant), The fair value of each warrant granted
was determined using the Black-Scholes warrant pricing model and the following assumptions:



|                        |  |  | As
                                                       at April 30, 2011 |  |  |  | As
                                                              at April 30, 2010 | 
|----------------------- |  |  | --------------------------------------------------------------------------- |  |  |  | ---------------------------------------------------------------------------------- | 
|                        |  |  |                                                                             |  |  |  |                                                                                    | 
|Risk free interest rate |  |  | 2.47%                                                                       |  |  |  | 1.49% - 2.36%                                                                      | 
|Expected life           |  |  | 5.0 years                                                                   |  |  |  | 5.0 - 10.0 years                                                                   | 
|Annualized volatility   |  |  | 603%                                                                        |  |  |  | 580% - 596%                                                                        | 
|Expected dividends      |  |  | -                                                                           |  |  |  | -                                                                                  | 









14







Recent Sales of  Unregistered Securities



Following are descriptions of all unregistered equity securities canceled,
issued and/or sold during the fiscal year ended April 30, 2011:





i.             During
the year ended April 30, 2011, we issued 30,000 warrants valued at $33,000 for services rendered. Each whole common stock warrant entitles the holder to purchase one share of our common stock at a price of $0.25 per share for a period of
five years. During the year ended April 30, 2011, we issued 18,000 shares of common stock, valued at $0.25 per share, for
cash of $4,500 upon exercise of the purchase warrants. These shares were restricted from trading for a period of one
year as defined by Rule 144 of the United States Securities Act of 1933. At April 30, 2011, 12,000 warrants in this
series remain outstanding.



ii.             During
the year ended April 30, 2011, we issued 13,336 shares of common stock, valued at $0.25 per  share, for proceeds of
$3,333 upon exercise of warrants. These shares were restricted from trading for a period of one year as defined by Rule 144
of the United States Securities Act of 1933.



iii.           
During the year ended April 30, 2011, we issued 1,818,181 shares of common stock, valued at $1.10 per share, upon the
conversion of a Subordinated Convertible Promissory Note, dated February 11, 2010, held by Samyang Optics Co., Ltd., a South
Korean corporation (“Samyang”). As a result of a miscommunication with representatives of Samyang, it was
determined that the shares should not have been issued because Samyang did not wish to exercise its conversion rights under
the Note at the time the shares were issued. Consequently, with the cooperation of Samyang, we are in the process of
cancelling these 1,818,181 shares issued in error.



iv.           During
the year ended April 30, 2011, we issued 1,000,000 shares of common stock, valued at $0.25 per share, related to
share subscriptions received in advance in the amount of $250,000. These shares were restricted from trading for a period of
one year as defined by Rule 144 of the United States Securities Act of 1933.



v.             During
the year ended April 30,2011,we  issued 30,000 shares of common stock, valued at $1.02 per share, for $30,600 in
consulting fees. These shares were restricted from trading for a period of one year as defined by Rule 144 of the United
States Securities Act of 1933.



vi.           During
the year ended April 30, 2011, a total of 59,200 previously outstanding  warrants expired.



vii.           During
the year ended April 30, 2011,we issued 3,334 shares of common stock, valued at $0.25 per share, in error. We are in the process
of obtaining the 3,334 shares to be returned to treasury for cancellation.



viii.          During
the year ended April 30, 2011,  we issued 3,334 shares of common stock, at no value per share,  in error. We are in the
process of obtaining the 3,334 common shares to be returned to treasury for cancellation.



vix.          During
the year ended April 30, 2011, we issued 20,000 shares of common stock, valued at $0.25 per share, for proceeds of
$5,000 upon exercise of warrants. These shares were restricted from trading for a period of one year as defined by Rule 144
of the United States Securities Act of 1933.









These recent sales of unregistered securities are considered exempt from registration
pursuant to the exemption for transactions not involving a public offering at Section 4(2) of the Securities Act of 1933, as amended.







15









Share Subscriptions Received in Advance



During the year ended April 30, 2010, we received $250,000 for the purchase of shares.  As of the date of the filing of this annual report, these shares were issued on
October 18, 2010.





Stock Option Grants



There were no stock options granted, issued or outstanding as of April 30,
2011.



Stockholders



As of April 30, 2011, there were 135 holders of record of our issued
and outstanding common stock.



Item 6.  Selected Financial Data



We are a smaller reporting company as defined by Rule 12b-2 of the Exchange
Act and are not required to provide the information required under this item. Please see our audited consolidated financial statements
included in this annual report on Form 10-K for detailed financial information.



Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations



Forward-Looking Statements



THIS ANNUAL REPORT, INCLUDING THE FOLLOWING MANAGEMENT'S DISCUSSION AND
ANALYSIS, AND OTHER REPORTS FILED BY THE REGISTRANT FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION (COLLECTIVELY
THE "FILINGS") CONTAIN FORWARD-LOOKING STATEMENTS WHICH ARE INTENDED TO CONVEY OUR EXPECTATIONS OR PREDICTIONS REGARDING
THE OCCURRENCE OF POSSIBLE FUTURE EVENTS OR THE EXISTENCE OF TRENDS AND FACTORS THAT MAY IMPACT OUR FUTURE PLANS AND OPERATING
RESULTS. THESE FORWARD-LOOKING STATEMENTS ARE DERIVED, IN PART, FROM VARIOUS ASSUMPTIONS AND ANALYSES WE HAVE MADE IN THE CONTEXT
OF OUR CURRENT BUSINESS PLAN AND NFORMATION CURRENTLY AVAILABLE TO US AND IN LIGHT OF OUR EXPERIENCE AND PERCEPTIONS OF HISTORICAL
TRENDS, CURRENT CONDITIONS AND EXPECTED FUTURE DEVELOPMENTS AND OTHER FACTORS WE BELIEVE TO BE APPROPRIATE IN THE CIRCUMSTANCES.
YOU CAN GENERALLY IDENTIFY FORWARD-LOOKING STATEMENTS THROUGH WORDS AND PHRASES SUCH AS "SEEK", "ANTICIPATE",
"BELIEVE", "ESTIMATE", "EXPECT", "INTEND", "PLAN", "BUDGET", "PROJECT",
"MAY BE", "MAY CONTINUE", "MAY LIKELY RESULT", AND SIMILAR EXPRESSIONS. WHEN READING ANY FORWARD-LOOKING
STATEMENT YOU SHOULD REMAIN MINDFUL THAT ALL FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN AS THEY ARE BASED ON CURRENT
EXPECTATIONS AND ASSUMPTIONS CONCERNING FUTURE EVENTS OR FUTURE PERFORMANCE OF OUR COMPANY, AND ARE SUBJECT TO RISKS, UNCERTAINTIES,
ASSUMPTIONS AND OTHER FACTORS RELATING TO OUR INDUSTRY AND RESULTS OF OPERATIONS, INCLUDING BUT NOT LIMITED TO THE FOLLOWING FACTORS:



-    WHETHER THE ALTERNATIVE
ENERGY FOR OUR PRODUCTS CONTINUES TO GROW AND, IF IT DOES, THE PACE AT WHICH IT MAY GROW;

-    OUR ABILITY TO ATTRACT
AND RETAIN THE PERSONNEL QUALIFIED TO IMPLEMENT OUR GROWTH STRATEGIES,

-    OUR ABILITY TO OBTAIN
APPROVAL FROM GOVERNMENT AUTHORITIES FOR OUR PRODUCTS;

-    OUR ABILITY TO PROTECT
THE PATENTS ON OUR PROPRIETARY TECHNOLOGY;

-    OUR ABILITY TO FUND OUR
SHORT-TERM AND LONG-TERM FINANCING NEEDS;

-    OUR ABILITY TO COMPETE
AGAINST LARGE COMPETITORS IN A RAPIDLY CHANGING  MARKET;

-    CHANGES IN OUR BUSINESS
PLAN AND CORPORATE STRATEGIES; AND

-    OTHER RISKS AND UNCERTAINTIES
DISCUSSED IN GREATER DETAIL IN VARIOUS SECTIONS OF THIS REPORT.



16









SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD
THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED,
EXPECTED, INTENDED OR PLANNED. EACH FORWARD-LOOKING STATEMENT SHOULD BE READ IN CONTEXT WITH, AND WITH AN UNDERSTANDING OF, THE
VARIOUS OTHER DISCLOSURES CONCERNING OUR COMPANY AND OUR BUSINESS MADE IN OUR FILINGS. YOU SHOULD NOT PLACE UNDUE RELIANCE ON
ANY FORWARD-LOOKING STATEMENT AS A PREDICTION OF ACTUAL RESULTS OR DEVELOPMENTS. WE ARE NOT OBLIGATED TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENT CONTAINED IN THIS REPORT TO REFLECT NEW EVENTS OR CIRCUMSTANCES UNLESS AND TO THE EXTENT REQUIRED BY
APPLICABLE LAW.



Restatement of Consolidated Financial Statements



Our consolidated financial statements for the fiscal year ended
April 30, 2010 included in this annual report have been restated to reflect the correct amount of consulting fees, salaries
and wages paid. The restatement resulted in a decrease to consulting fees in the amount of $41,644, a decrease in salaries
and wages in the amount of $137,859 and a decrease in accounts payable and accrued liabilities in the amount of $179,503.



Results of
Operations



Fiscal year ended April 30, 2011 compared to the fiscal year ended April
30, 2010



For the fiscal year ended April 30, 2011, we incurred a net operating loss
of $946,223, or $0.18 per share, as compared to a net loss of $1,732,439, or $(0.94) per share, for the fiscal year ended
April 30, 2010.



We incurred total expenses of $946,223 for the fiscal year ended April
30, 2011, as compared to total expenses of $1,732,439 for the fiscal year ended April 30, 2010. The majority of
these expenses were attributed to $332,598 for consulting fees (2010 - $221,124, cumulative - $1,419,399); $162,049
for travel and entertainment expense (2010 - $149,253, cumulative - $435,579); $138,004 in salaries and wages (2010 -
$436,148, cumulative - $574,162); $120,085 in interest expense (2010 - $26,624, cumulative - $163,342; and $100,000 in
investor relations for the preparation and dissemination of shareholder information (2010 - $50,000, cumulative
- $389,878). Our other expenses included $72,099 in professional fees (2010 - $78,877, cumulative -
$558,249), generally consisting of fees for legal, accounting and outside services paid in connection with the preparation
and filing of our periodic reports with the SEC; $15,962 in depreciation expense (2010 - $3,098, cumulative - $24,442);
$5,322 for listing, filing and transfer agent fees (2010 - $7,581, cumulative $60,816);  $4,811 in miscellaneous office/sundry expenses (2010 - $8,319, cumulative - $73,651);
and $813 for  public relations (2010 - $9,409, cumulative - $191,659).



Our expenses increased during the fiscal year ended April 30, 2011
primarily due to payment of consulting fees, interest expense and travel and entertainment expenses in
connection with our continued efforts to enter into agreements with companies to market our products.



Liquidity and Capital Resources



We currently have $340,892 in cash in the bank. It is expected
we will continue to need further funding until we complete a final prototype to bring to market for sale and generate revenues
or enter into an agreement with a joint venture partner to complete our plans. We currently plan to fund future operations by
public offerings or private placement of equity and/or debt securities as we have done in the past. However, there can be no assurance
that debt or equity financing will be available to us on acceptable terms to meet these requirements, as and when needed. Our
auditors have expressed substantial doubt about our ability to continue as a going concern.



As of the date of this annual report, we have not yet generated any revenues.



We do not intend to purchase any significant property or equipment, nor incur
any significant changes in employees during the next 12 months.





17











Total cash from financing activities for the fiscal year ended April 30, 2011
was $12,833, resulting from the exercise of outstanding warrants.



At April 30, 2011, the amount due to a related party was $702, payable
to a former director and stockholder of the Company.  This balance is non-interest bearing, unsecured, and has no fixed
terms of repayment.





Recent Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements
on our consolidated financial statements, see Note 2 of the Notes to Consolidated Financial Statements included in our audited
consolidated financial statements for the year ended April 30, 2011 at the end of this Annual Report.

Commitments and Contingencies





We are committed to issuing 25,000 shares of our common stock, valued at $3,750,
pursuant to a one-year consulting agreement for consulting services entered into with an unrelated third party.



During the year ended April 30, 2011, we issued 3,334 shares of common stock,
valued at $0.25 per share, and 3,334 shares of common stock, valued at $Nil per share, in error. We are in the process of obtaining
the 6,668 shares to be returned to treasury for cancellation.



Also during the year ended April 30, 2011, we issued 1,818,181 shares of
common stock, valued at $1.10 per share, in error in contemplation of the conversion of the Promissory Note by
Samyang. These shares have been returned to treasury and we are currently in the process of cancelling these
1,818,181 shares issued in error .





We anticipate no material commitments for capital expenditures in the near
term.





Management is not aware of any trend in its industry or capital resources,
which may have an impact on its income, revenue or income from operations.



Off-Balance Sheet Arrangements



We have no off-balance sheet arrangements or contractual or commercial commitments.



Item 7A. Quantitative and Qualitative Disclosures About Market Risk



As a smaller reporting issuer (as defined in Item 10(f)(1) of Regulation S-K), we
are not required to report quantitative and qualitative disclosures about market risk specified in Item 305 of Regulation
S-K.

Item 8. Financial Statements and Supplementary Data



Please see our audited consolidated financial statements immediately following
the signature page of this Annual Report.



Item 9.  Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures



There have been no disagreements with our accountants on accounting or other
financial disclosures since inception.





18











Item 9A. Controls and Procedures





We maintain disclosure controls and procedures designed
to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of
1934 (“Exchange Act”) is recorded, processed, summarized and reported within the specified time periods. Our
Chief Executive Officer and our Principal Financial Officer (collectively, the “Certifying Officers”) are
responsible for maintaining our disclosure controls and procedures. Prior the filing of this report, our Certifying Officers
evaluated the effectiveness of our disclosure controls and procedures for the period covered by this report. Based on the
evaluation, our Certifying Officers concluded that our disclosure controls and procedures were effective to provide
reasonable assurance that (a) information required to be disclosed by us in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and
(b) that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow
timely decisions regarding required disclosure. We have conducted a review of the effectiveness of our internal controls over
financial reporting as disclosed herein.



Our management is also responsible for establishing and
maintaining a system of adequate internal controls over financial reporting. Internal controls over financial reporting is defined
as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons
performing similar functions, and effected by our board of directors, management and other personnel, to provide assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principals and includes those policies and procedures that: (1) pertain to the maintenance of records that
in reasonable detail accurately and fairly reflect the transactions and dispositions of the our assets; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles, and receipts and expenditures are being made only in accordance with authorizations of management
and our directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on our financial statements. We believe our internal controls
over financial reporting are effective to provide reasonable assurance that our financial statements are fairly presented in conformity
with generally accepted accounting principals. Since our most recent evaluation, there have been no changes in our internal controls
or in other factors that could significantly affect our internal controls, nor were any corrective actions required with regard
to significant deficiencies and material weaknesses. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect every misstatement and instance of fraud. Controls are susceptible to manipulation, especially in instances
of fraud caused by the collusion of two or more people, including our senior management. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.



Under the supervision and with the participation of
our Certifying Officers, our management conducted an evaluation of the effectiveness of our internal controls over financial
reporting based upon the framework in Internal Control  - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on the results of our evaluation, our management concluded that our
internal control over financial reporting was effective as of April 30, 2011 and the date of the filing of the annual report. Since
our most recent evaluation, there have been no change in our internal controls of financial reporting that has materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.



This report does not include an attestation report of
our registered public accounting firm regarding internal controls over financial reporting. Management’s report was not
subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission
that permit us to provide only management’s report in this annual report.





Item 9B. Other Information



None.





19







PART III



Item 10.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act



Management



The following table sets forth the names, positions and ages of the executive
officers and directors. Directors are elected at the annual meeting of stockholders and serve for one year or until their successors
are elected and qualify. Officers are elected by the Board of Directors and their terms of office are, except to the extent governed
by employment contract, at the discretion of the Board of Directors.





|Name of Director or Officer and Position in the Company                          | Officer or Director
    Since   |  | Age |  |  | Office(s)
                                                   Held and Other Business Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  | 
|-------------------------------------------------------------------------------- | ------------------------------- |  | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
|                                                                                 |                                 |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 
|Chien Chih Liu, Chief Executive
    Officer and Director (1)                     | November 1,
    2007 to present |  | 39  |  |  | Mr.
                                                       Liu has over 15 years of experience in international trade and project management. From 2002 to 2007, he was Vice President
                                                       of Tianyi Group, a company engaged in the business of international trade and project management in California.  Prior to
                                                       Tianyi Group, he was in the real estate investment business in both the US and China. Mr. Liu received a BS in Chemical Engineering
                                                       from the University of California-Berkeley. He devotes his time as required to the business of our company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |  | 
|                                                                                 |                                 |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 
|Richard Di Stefano, Chief Financial Officer
    and Principal Accounting Officer | June 5, 2008 to present         |  | 34  |  |  | Mr. DiStefano is a business
                                            strategist with over 13 years experience managing multiple product lines in both the corporate and entrepeneurial environments.
                                            From 2004 to the present, he has been the owner/operator of Premier Wireless, a retail multi-carrier phone sales and service outlet
                                            business. He grew the company from one outlet to 12 in 36 months in premium mall locations and formed dealer relationships with
                                            Sprint, Verizon, Cingular, T-Mobile and Metro PCS.  In addition, from 2004 to the present, Mr. DiStefano is a Director
                                            of Product Mobile for Match.com, where he has developed and launched SMS alerts, an integrated WAP site and Brew downloadable
                                            client applications with ATT, Sprint, Virgin, Alltel and Telefonica in Spain. He has led the global on-deck expansion of Match.com
                                            into the UK and Spain with Vodafone and Orange,  and created and launched the model for Match and MSN dating and personals
                                            in the US and 14 other countries, including contract negotiations.  He received a BS Degree in Rhetoric and Communications
                                            from the University of California-Davis in 1998 and a Law Degree from Lincoln Law School in Sacramento, CA. in 2004. Mr. DiStefano
                                            devotes his time as required to the business of our company. |  |  | 
|                                                                                 |                                 |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 
|Michael H. Choy, D.P.M., F.A.A.C.F.S., Director                                  | March 28, 2011 to present       |  | 58  |  |  | Dr. Choy has been the Chairman and Chief Executive Officer of Asia
Pacific Medical Group, a privately-held health care services company, since 1993. He graduated from the University of
California, Berkeley, with a Bachelor of Arts Degree in 1974 and from the California College of Podiatric Medicine with a
Doctor of Podiatric Medicine (D.P.M.) degree in 1980.. He holds a Diplomat Certification from the American Board of Podiatric
Surgery and a Fellow Certification from the American College of Foot Surgery. Dr. Choy devotes his time as required to the
business of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |  | 
|                                                                                 |                                 |  |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 
|Chu Keung Andrew Chow                                                            | March 28, 2011 to present       |  | 45  |  |  | Since 1996,  Mr. Chow has been  the Director and Senior Vice
President of Finance for American Pacific Medical Group, a privately-held medical group owning 10 hospitals in China, started
by 35 medical doctors. He is Fellow of the Chartered Association of Certified Accountants, as well as an associate of the
Chartered Institute of Management Accountants in the United Kingdom and an Associate of the Hong Kong Institute of Certified
Public Accountants. Mr. Chow received his Diploma in Accountancy from Morrison Hill Technical Institute in Hong Kong in 1987.
He devotes his time as required to the business of our company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  | 





During the fiscal year ended April 30, 2011, the Company accepted the
resignations of Mariya Petrovska and Ching Chuen Chan and appointed Chu Keung Andrew Chow and Michael H. Choy as
Directors.







The officers and directors listed above are expected to hold their
offices/positions until the next annual meeting of our stockholders. The officers and directors are our only officers,
directors and control persons.







20









Section 16(a) Beneficial Ownership Reporting Compliance





Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than ten percent of our common stock, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership of our common stock. Officers, directors and greater
than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To
the best of our knowledge, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent
beneficial owners were complied with. In making these disclosures, we have relied solely on a review of the copies of such reports
furnished to us and written representations by our directors, executive officers and greater than ten percent stockholders.



Code of Ethics



At this time, we have not adopted a formal Code of Ethics that applies to the
Chief Financial Officer.  We have, however, followed an informal Code of Ethics requiring Board of Director approval of any
material transaction involving our Chief Financial Officer. We believe this procedure reasonably deters material wrongdoing and
promotes honest and ethical conduct from our executive officers.



Nominating Committee

At the present time, we do not have a standing nominating committee
or a committee performing similar functions. At the present stage of our business development, it is the view of our Board of
Directors that such a committee would be of little assistance in recommending nominations for director-nominees. In addition,
at the present time we do not have a defined policy or procedure for shareholders to submit recommendations or nominations for
directors. The Board of Directors believes that, given the current stage of our development, a specific nominating policy would
be premature and of little assistance until the Company’s operations develop to a more advanced level. We do not currently
have any specific or minimum criteria for the selection of nominees to the Board of Directors and the Board does not have any
specific process or procedure for evaluating such nominees. The Board of Directors assesses all candidates, whether submitted
by management or shareholders and makes recommendations for election or appointment.



Item 11.  Executive Compensation



The following table sets out the compensation received for the fiscal years
ended April 30, 2011 and 2010 with respect to each of the individuals who were our principal executive officers at any time during
the last fiscal year and the  most highly compensated executive officers whose total salary and bonus exceeded $100,000.



|SUMMARY COMPENSATION
    TABLE                 
|-----------------------------------------------
|                                               
|                                               
|Name and Principal Position                    
|                                               
|                                               
|Chien Chih Liu, Principal Executive Officer (1)
|                                               
|                                               
|Richard Di Stefano,Principal Financial Officer 
|                                               
|                                               



(1)  During the fiscal year ended April 30, 2010, on July 1, 2009, we
entered into an Employment Agreement with Mr. Chien Chih Liu. The terms of the agreement provide that Mr. Liu will receive an
annual base salary of $125,000 per year, as well as a one-time bonus of $75,000 in restricted common stock. The term of the Employment
Agreement is for 36 months, beginning July 1, 2009.







21









There are no other employment agreements, arrangements or understandings between
any executive officer and any director or other person pursuant to which any person was selected as a director or an executive
officer.





OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END



We have granted no equity awards since inception.



None of our officers or directors exercised any warrants during the fiscal
year ended April 30, 2011.





No pension or retirement benefit plan has been adopted and none is proposed
at this time. There is no arrangement for compensation with respect to termination of the directors in the event of change of
control of the Company.



ITEM 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters



The following table sets forth certain information regarding common stock beneficially
owned on the date of this filing for (i) each shareholder known by us to be the beneficial owner of five (5%) percent or more
of our issued and outstanding common stock, (ii) each executive officers and directors, and (iii) all executive officers and directors
as a group. As of the date of the filing of this annual report, there were 7,528,492 shares of common stock issued and outstanding.





|Name and Address of Beneficial Owner  | Position(s) Held                     | Nature and Amount of Beneficial Ownership (1) | Percent of Outstanding Common Stock
|------------------------------------- | ------------------------------------ | --------------------------------------------- | -----------------------------------
|                                      |                                      |                                               |                                    
|                                      |                                      |                                               |                                    
|Chien Chih Liu                        | Chief Executive Officer and Director | 768,164                                       | 10%                                
|300 B Street                          |                                      | Direct                                        |                                    
|Santa Rosa, CA.  95401                |                                      |                                               |                                    
|                                      |                                      |                                               |                                    
|Samyang Optics (2)(3)                 | None                                 | 1,818,181                                     | 24%                                
|974-6 Yangdug-dong                    |                                      | Direct                                        |                                    
|Heawon-gu                             |                                      |                                               |                                    
|Mason, South Korea                    |                                      |                                               |                                    
|                                      |                                      |                                               |                                    
|Yaya Jiang (2)                        | None                                 | 1,000,000                                     | 13%                                
|125 Mt. Baldy                         |                                      |                                               |                                    
|Roseville, CA. 95747                  |                                      |                                               |                                    
|                                      |                                      |                                               |                                    
|Steven Schneider                      | None                                 | 996,750                                       | 13%                                
|501 Fourth Street                     |                                      |                                               |                                    
|Santa Rosa, CA. 95401                 |                                      |                                               |                                    
|                                      |                                      |                                               |                                    
|All Officers and Directors as a group |                                      | 768,164                                       | 10%                                



(1) In general, a person is considered a beneficial owner of a security if
that person has or shares the power to vote or direct the voting of such security, or the power to dispose of such security. A
person is also considered to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership
within (60) days.



(2) Samyong Optics and Yaya Jiang are both unrelated third parties and neither
are related to each other or to any of the other shareholders.



(3)   As a result of a miscommunication with representatives of Samyang,
it was determined that the shares were issued in error and we are in the process of cancelling them.



Changes in Control





On May 10, 2011, we entered into a share exchange agreement with
daifuWaste Management Holding Limited (“Daifu”), a  medical waste treatment company headquartered in Beijing,
China and incorporated as a limited liability company in the Cayman Islands, whereby we issued 52,922,812 shares of our
common stock to the stockholders of Daifu in exchange for all of their issued and outstanding shares. As a result of
the transaction, Daifu became our wholly-owned subsidiary.











22









Item 13.  Certain Relationships and Related Transactions



At April 30, 2011, a total of $702 was due and payable to a former director
and stockholder of the Company. This balance is non-interest bearing, unsecured and has no fixed terms of repayment.





Item 14. Principal Accountant Fees and Services



Audit Fees



The aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements for the fiscal year ended April 30, 2011 were $13,500.
The reviews for the financial statements included in our quarterly reports on Form 10-Q during the fiscal year ended April 30,
2011 were $9,281.



Audit Related Fees



We incurred no fees for the fiscal year ended April 30, 2011 for assurance
and related services by our principal accountant that were reasonably related to the performance of the audit or review of our
financial statements, and not reported under Audit Fees above.



Tax Fees



We incurred no fees for professional services rendered by our principal accountant
for tax compliance, tax advice, preparation and filing of tax returns and tax planning for the fiscal year ended April 30, 2011.



All Other Fees



No other fees were incurred during the fiscal year ended April 30, 2011
for products and services rendered by our principal accountants.



Audit Committee Requirements



Section 10A(i) of the Exchange Act prohibits our auditors from performing
audit services for us, as well as any services not considered to be "audit services",  unless such services are
pre-approved by the audit committee of the Board of Directors, or unless the services meet certain de minimis standards. Because
we are still in the development stage and have not yet completed our business plans and/or generated any revenues, we have not
yet appointed an audit committee. Our Board of Directors ensure that:



| | · | All audit services that the auditor may provide to us or any subsidiary
    (including, without limitation, providing comfort letters in connection with securities underwritings or statutory audits) as
    required by §10A(i)(1)(A) of the Exchange Act (as amended by the Sarbanes-Oxley Act of 2002) are preapproved by the Board.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All non-audit services (other than certain de minimis services described
    in §10A(i)(1)(B) of the Exchange Act (as amended by the Sarbanes-Oxley Act of 2002)) that the auditors propose to provide
    to us or any of our subsidiaries are preapproved by the Board.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



All audit fees were approved by the Board of Directors.





23









Item 15.  Exhibits



The following Exhibits 3(i) and 3 (ii), marked with an asterisk and required
to be filed hereunder, are incorporated herein by reference and can be found in their entirety in our original Form  SB-2
Registration Statement, filed on 6/7/04 under our SEC File Number 333-116324 on the SEC website at www.sec.gov.  Exhibit
99.1 can be found in its entirety in our Form 10K-SB for the fiscal year ended April 30, 2006, filed on 7/31/06. These exhibits
are incorporated herein by this reference.



Exhibit No.                
Description



* 3(i)                           
Articles of Incorporation

* 3(ii)                           
Bylaws

23.1                             
Consent of Accountants



31.1             
                Sec. 302 Certification of Principal
Executive Officer/CEO

31.2                             
Sec. 302 Certification of Principal Accounting Officer/CFO

32.1             
                Sec. 906 Certification of Principal
Executive Officer/CEO

32.2                             
Sec. 906 Certification of Principal Accounting Officer/CFO

*99                  
            Agreement with Obvio! Automotoveiculos S.A.





SIGNATURES



Pursuant to the requirements of Section 13(a) or 15(d) 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.



ROTOBLOCK CORPORATION, Registrant



/s/ Chien Chih Liu

By: Chien Chih Liu, Chief Executive Officer



Dated:  August 15, 2011



/s/  Richard Di Stefano

By: Richard Di Stefano, Chief Financial Officer



Dated: August 15, 2011





Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in the capacities and on the dates indicated:



Dated: August 15, 2011



/s/   Michael H.
Choy

By:  Michael H. Choy, Director





Dated: August 15, 2011



/s/   Chu Keung Andrew
Chow

By:  Chu Keung Andrew Chow, Director





24

























Rotoblock Corporation

(A Development Stage Company)

Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011



















25













|JAMES STAFFORD |                                
|-------------- | -------------------------------
|               | James Stafford, Inc.           
|               | Chartered Accountants          
|               | Suite350 - 1111 Melville Street
|               | Vancouver, British Columbia    
|               | Canada V6E 3V6                 
|               | Telephone +1 604 669 0711      
|               | Facsimile +1 604 669 0754      
|               | www.jamesstafford.ca           







Report of Independent Registered Public Accounting Firm









To the Board of Directors and Stockholder’s of

Rotoblock Corporation

(A Development Stage Company)





We have audited the accompanying consolidated balance sheets of Rotoblock
Corporation (A Development Stage Company) (the “Company”) as at 30 April 2011 and 2010 and the related consolidated
statements of operations, cash flows and changes in stockholder’s equity for each of the years in the three-year period ended
30 April 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.



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



In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as at 30 April 2011 and 2010 and the results of its operations,
its cash flows and its changes in stockholders’ equity for each of the years in the three-year period ended 30 April 2011
in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, conditions
exist which raise substantial doubt about the Company’s ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations. Management’s plans regarding those matters are
also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.





/s/ James Stafford

Chartered Accountants



Vancouver, Canada

10 August 2011







26







Rotoblock Corporation

(A Development Stage Company)

Consolidated Balance Sheets

(Expressed in U.S. Dollars)







|                                                              |  | As at
        30 April
        2011 |  | As at
        30 April
        2010

(Restated)
|------------------------------------------------------------- |  | ----------------------------------- |  | -----------------------------------------------
|                                                              |  | $                                   |  | $                                              
|Assets                                                        |  |                                     |  |                                                
|                                                              |  |                                     |  |                                                
|Current                                                       |  |                                     |  |                                                
|Cash and cash equivalents                                     |  | 340,892                             |  | 925,070                                        
|Amounts receivable (Note 10)                                  |  | 233                                 |  | 220                                            
|Prepaid expenses (Note 10)                                    |  | 20,417                              |  | 158,998                                        
|                                                              |  |                                     |  |                                                
|                                                              |  | 361,542                             |  | 1,084,288                                      
|                                                              |  |                                     |  |                                                
|Available-for-sale investments(Note 4)                        |  | 887,915                             |  | 1,231,929                                      
|                                                              |  |                                     |  |                                                
|Property and equipment(Note 5)                                |  | 108,850                             |  | 124,812                                        
|                                                              |  |                                     |  |                                                
|                                                              |  | 1,358,307                           |  | 2,441,029                                      
|Liabilities                                                   |  |                                     |  |                                                
|                                                              |  |                                     |  |                                                
|Current                                                       |  |                                     |  |                                                
|Accounts payable and
    accrued liabilities (Notes 6 and 16) |  | 45,847                              |  | 35,612                                         
|Due to related party (Note 8)                                 |  | 702                                 |  | 663                                            
|Convertible promissory note (Notes 4 and 7)                   |  | 2,145,644                           |  | 2,025,644                                      
|                                                              |  |                                     |  |                                                
|                                                              |  | 2,192,193                           |  | 2,061,919                                      
|                                                              |  |                                     |  |                                                
|Stockholders’
    equity                                      |  |                                     |  |                                                
|Capital stock (Note
    10)                                   |  |                                     |  |                                                
|Authorized                                                    |  |                                     |  |                                                
|200,000,000 common shares, par value $0.001                   |  |                                     |  |                                                
|50,000,000 preferred shares, par value $0.001                 |  |                                     |  |                                                
|Issued and outstanding                                        |  |                                     |  |                                                
|30 April 2011 – 5,710,311 common shares, par value $0.001     |  |                                     |  |                                                
|30 April 2010 – 4,622,307 common shares, par value $0.001     |  | 5,706                               |  | 4,622                                          
|Additional paid-in capital                                    |  | 5,966,209                           |  | 5,620,014                                      
|Warrants(Note 10)                                             |  | 1,401,514                           |  | 1,421,526                                      
|Share subscriptions
    received in advance (Note 10)         |  | -                                   |  | 250,000                                        
|Accumulated other comprehensive
    income (loss)             |  | (116,356)                           |  | 227,684                                        
|Deficit, accumulated
    during the development stage         |  | (8,090,959)                         |  | (7,144,736)                                    
|                                                              |  |                                     |  |                                                
|                                                              |  | (833,886)                           |  | 379,110                                        
|                                                              |  |                                     |  |                                                
|                                                              |  | 1,358,307                           |  | 2,441,029                                      





Nature and Continuance of Operations (Note 1), Commitments and Contingency (Note 12) and Subsequent
Events (Note 15)



On behalf of the Board: /s/Chien
Chih Liu, Director	/s/ Andrew Chow, Director



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





27









Rotoblock Corporation

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed in U.S. Dollars)







|                                                                                     |           | For the period from the date of inception on 2 September 2003 to
        30 April
        2011
        (Unaudited) | For the
        year
        ended
        30 April
        2011 | For the
        year
        ended
        30 April
        2010
        (Restated) | For the
        year
        ended
        30 April
        2009
|------------------------------------------------------------------------------------ | --------- | ------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------
|                                                                                     |           | $                                                                                                                  | $                                                                | $                                                                                   | $                                                               
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Expenses                                                                             |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|General and administrative (Schedule 1)                                              |           | 7,816,906                                                                                                          | 951,743                                                          | 1,697,078                                                                           | 718,591                                                         
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Net loss before other
    items                                                      |           | (7,816,906)                                                                                                        | (951,743)                                                        | (1,697,078)                                                                         | (718,591)                                                       
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Other items                                                                          |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Excess of consideration over net assets purchased from Rotoblock Inc. (Note 1)       | (138)     | -                                                                                                                  | -                                                                | -                                                                                  
|Other income                                                                         |           | 5,520                                                                                                              | 5,520                                                            | -                                                                                   | -                                                               
|Gain on disposal of property (Notes 5, 9, 10 and 13)                                 | 1,384     | -                                                                                                                  | 1,384                                                            | -                                                                                  
|Provision for legal dispute                                                          |           | -                                                                                                                  | -                                                                | 72,000                                                                              | (72,000)                                                        
|Write-off of patents (Note 3)                                                        |           | (108,745)                                                                                                          | -                                                                | (108,745)                                                                           | -                                                               
|Write-off of property and equipment                                                  |           | (9,870)                                                                                                            | -                                                                | -                                                                                   | -                                                               
|Write-off of related party receivable                                                |           | (162,204)                                                                                                          | -                                                                | -                                                                                   | -                                                               
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Net loss for the period                                                              |           | (8,090,959)                                                                                                        | (946,223)                                                        | (1,732,439)                                                                         | (790,591)                                                       
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Basic and diluted loss
    per common share                                          |           |                                                                                                                    | (0.18)                                                           | (0.94)                                                                              | (0.90)                                                          
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Weighted
    average number of common shares used in per share calculations (Note 2) | 5,178,202 | 1,841,638                                                                                                          | 881,986                                                         
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Comprehensive loss                                                                   |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Net loss for the period                                                              |           | (8,090,959)                                                                                                        | (946,223)                                                        | (1,732,439)                                                                         | (790,591)                                                       
|Foreign currency translation adjustment                                              |           | (4,271)                                                                                                            | (26)                                                             | (47)                                                                                | 70                                                              
|Unrealized gain (loss) on available-for-sale investments
        (Notes 4 and 14)    | (112,085) | (344,014)                                                                                                          | 231,929                                                          | -                                                                                  
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Comprehensive loss for
    the period                                                |           | (8,207,315)                                                                                                        | (1,290,263)                                                      | (1,500,557)                                                                         | (790,521)                                                       
|                                                                                     |           |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Basic and
    diluted comprehensive loss per common share                            |           | (0.25)                                                                                                             | (0.81)                                                           | (0.90)                                                                             





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



28









Rotoblock Corporation

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Expressed in U.S. Dollars)











|                                                                                           |             | For the period from the date of inception on 2 September 2003 to
        30 April
        2011
        (Unaudited) | For the
        year
        ended
        30 April
        2011 | For the
        year
        ended
        30 April
        2010
        (Restated) | For the
        year
        ended
        30 April
        2009
|------------------------------------------------------------------------------------------ | ----------- | ------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------
|                                                                                           |             | $                                                                                                                  | $                                                                | $                                                                                   | $                                                               
|Cash used in operating activities                                                          |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Net loss for the period                                                                    |             | (8,090,959)                                                                                                        | (946,223)                                                        | (1,732,439)                                                                         | (790,591)                                                       
|Adjustments to reconcile loss to net cash used by operating activities:                    |             |                                                                                                                    |                                                                  |                                                                                    
|Contributions to capital by related party – expenses (Notes 9 and 13)                      | 300,000     | -                                                                                                                  | -                                                                | 100,000                                                                            
|Depreciation (Note 5)                                                                      |             | 24,442                                                                                                             | 15,962                                                           | 3,098                                                                               | 1,414                                                           
|Gain on disposal of property (Notes 5, 9, 10 and 13)                                       | (1,384)     | -                                                                                                                  | (1,384)                                                          | -                                                                                  
|Non-cash interest (Notes 7 and 13)                                                         |             | 157,349                                                                                                            | 120,000                                                          | 25,644                                                                              | -                                                               
|Shares issued for services (Notes 9 and 10)                                                |             | 2,197,653                                                                                                          | 30,600                                                           | 676,675                                                                             | 394,000                                                         
|Stock-based compensation (Notes 9 and 10)                                                  |             | 3,157,726                                                                                                          | -                                                                | 633,728                                                                             | 147,446                                                         
|Warrants issued for services (Note 10)                                                     |             | 33,000                                                                                                             | 33,000                                                           | -                                                                                   | -                                                               
|Write-off of patents (Note 3)                                                              |             | 108,745                                                                                                            | -                                                                | 108,745                                                                             | -                                                               
|Write-off of property and equipment                                                        |             | 9,870                                                                                                              | -                                                                | -                                                                                   | -                                                               
|Write-off of related party receivable                                                      |             | 177,204                                                                                                            | -                                                                | -                                                                                   | -                                                               
|Changes in operating assets and liabilities:                                               |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|(Increase) decrease in amounts receivable (Note 10)                                        | (233)       | (13)                                                                                                               | (37)                                                             | 36                                                                                 
|(Increase) decrease in prepaid expenses (Note 10)                                          | 5,655       | 138,581                                                                                                            | (80,653)                                                         | (52,273)                                                                           
|Increase (decrease) in accounts
    payable and
accrued
liabilities (Notes 6, 10   and 16) | 34,978      | 11,069                                                                                                             | (5,158)                                                          | 18,784                                                                             
|Increase (decrease) in provision for legal dispute                                         | -           | -                                                                                                                  | (72,000)                                                         | 72,000                                                                             
|Increase (decrease) in due to related party (Note 8)                                       | 702         | 39                                                                                                                 | 112                                                              | (107)                                                                              
|                                                                                           | (1,885,252) | (596,985)                                                                                                          | (443,669)                                                        | (109,291)                                                                          
|Cash flows used in investing activities                                                    |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Purchase of equipment (Note 5)                                                             |             | (16,778)                                                                                                           | -                                                                | -                                                                                   | (2,940)                                                         
|Investment in Samyang Optics Co. Ltd. (Note 4)                                             |             | (1,000,000)                                                                                                        | -                                                                | (1,000,000)                                                                         | -                                                               
|Purchase of patents (Note 3)                                                               |             | (108,745)                                                                                                          | -                                                                | -                                                                                   | -                                                               
|                                                                                           |             | (1,125,523)                                                                                                        | -                                                                | (1,000,000)                                                                         | (2,940)                                                         
|Cash flows from financing activities                                                       |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Common shares issued for cash (Note 10)                                                    |             | 1,000,941                                                                                                          | -                                                                | 114,000                                                                             | 6,475                                                           
|Warrants granted for cash (Note 10)                                                        |             | 72,164                                                                                                             | -                                                                | -                                                                                   | 18,525                                                          
|Warrants exercised (Note 10)                                                               |             | 22,833                                                                                                             | 12,833                                                           | -                                                                                   | -                                                               
|Convertible promissory note payable (Note 7)                                               | 2,010,000   | -                                                                                                                  | 2,000,000                                                        | -                                                                                  
|Share subscriptions received in advance (Note 10)                                          | 250,000     | -                                                                                                                  | 250,000                                                          | -                                                                                  
|                                                                                           |             | 3,355,938                                                                                                          | 12,833                                                           | 2,364,000                                                                           | 25,000                                                          
|                                                                                           |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Foreign exchange effect on cash                                                            |             | (4,271)                                                                                                            | (26)                                                             | (47)                                                                                | 70                                                              
|                                                                                           |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Increase (decrease) in cash and cash equivalents                                           |             | 340,892                                                                                                            | (584,178)                                                        | 920,284                                                                             | (87,161)                                                        
|                                                                                           |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Cash and cash equivalents, beginning of period                                             |             | -                                                                                                                  | 925,070                                                          | 4,786                                                                               | 91,947                                                          
|                                                                                           |             |                                                                                                                    |                                                                  |                                                                                     |                                                                 
|Cash and cash equivalents, end of period                                                   |             | 340,892                                                                                                            | 340,892                                                          | 925,070                                                                             | 4,786                                                           









Supplemental Disclosures with Respect to Cash Flows (Note
13)



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





29











Rotoblock Corporation

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity

(Expressed in U.S. Dollars)







|                                                                                                              | Number
    of shares issued | Capital
        stock | Additional
    paid-in capital | Accumulated other comprehensive income (loss) | Deficit, accumulated during the development stage | Stockholders’
    equity
|------------------------------------------------------------------------------------------------------------- | --------------------------- | --------------------- | ------------------------------ | --------------------------------------------- | ------------------------------------------------- | ------------------------
|                                                                                                              |                             |                       |                                | $                                             |                                                   | $                       
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         
|Balance at 2 September 2003 (inception)                                                                       | -                           |                       | -                              |                                               | -                                                 |                         
|Shares issued for cash                                                                                        |                             | 140,000               |                                | -                                             |                                                   | 534                     
|Shares issued for cash                                                                                        |                             | 4,000                 |                                | -                                             |                                                   | 38,130                  
|Adjustment to number of shares issued as a result of the acquisition of net assets of Rotoblock Inc. (Note 1) | (144,000)                   |                       | -                              |                                               | -                                                 |                         
|Shares issued in connection with the acquisition of net assets of Rotoblock Inc. (Note 1)                     |                             | 300,000               |                                | 300                                           |                                                   | (300)                   
|Excess of consideration over
net
assets purchasedover net assets purchased from Rotoblock Inc. (Note 1)       | -                           |                       | -                              |                                               | -                                                 |                         
|Foreign currency translation adjustment                                                                       | -                           |                       | -                              |                                               | -                                                 |                         
|Net loss for the period                                                                                       |                             | -                     |                                | -                                             |                                                   | -                       
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         
|Balance at 30 April 2004                                                                                      | 300,000                     |                       | 300                            |                                               | 38,364                                            |                         
|Shares issued for cash ($2.50 per share)                                                                      | 200,000                     |                       | 200                            |                                               | 499,800                                           |                         
|Foreign currency translation adjustment                                                                       | -                           |                       | -                              |                                               | -                                                 |                         
|Net loss for the year                                                                                         |                             | -                     |                                | -                                             |                                                   | -                       
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         
|Balance at 30 April 2005                                                                                      | 500,000                     |                       | 500                            |                                               | 538,164                                           |                         
|Shares issued for cash ($13.08 per share)                                                                     | 10,963                      |                       | 11                             |                                               | 143,430                                           |                         
|Shares issued for services rendered ($15.59 per share)                                                        |                             | 48,363                |                                | 48                                            |                                                   | 753,829                 
|Shares issued for inventory ($14.50 per share)                                                                |                             | 12,221                |                                | 12                                            |                                                   | 177,192                 
|Warrants exercised ($12.50 per share)                                                                         | 800                         |                       | 1                              |                                               | 9,999                                             |                         
|Stock-based compensation                                                                                      |                             | -                     |                                | -                                             |                                                   | 1,901,177               
|Foreign currency translation adjustment                                                                       | -                           |                       | -                              |                                               | -                                                 |                         
|Net loss for the year                                                                                         |                             | -                     |                                | -                                             |                                                   | -                       
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         
|Balance at 30 April 2006                                                                                      | 572,347                     |                       | 572                            |                                               | 3,523,791                                         |                         
|Shares issued for cash ($10.50 per share)                                                                     | 2,286                       |                       | 2                              |                                               | 23,998                                            |                         
|Shares issued for services rendered ($5.62 per share)                                                         |                             | 34,185                |                                | 34                                            |                                                   | 192,031                 
|Contribution to capital by related parties – services                                                         |                             | -                     |                                | -                                             |                                                   | 100,000                 
|Stock-based compensation                                                                                      |                             | -                     |                                | -                                             |                                                   | 414,711                 
|Foreign currency translation adjustment                                                                       | -                           |                       | -                              |                                               | -                                                 |                         
|Net loss for the year                                                                                         |                             | -                     |                                | -                                             |                                                   | -                       
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         
|Balance at 30 April 2007                                                                                      |                             | 608,818               |                                | 608                                           |                                                   | 4,254,531               
|                                                                                                              |                             |                       |                                |                                               |                                                   |                         









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





30











Rotoblock Corporation

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity -Cont’d

(Expressed in U.S. Dollars)









|                                                                               |   | Number
    of shares issued |   | Capital
        stock |   | Additional
    paid-in capital |   | Warrants  |         | Share
    subscriptions received in advance |   | Accumulated
    other comprehensive income (loss) |   | Deficit,
    accumulated during the development stage |         | Stockholders

equity
|------------------------------------------------------------------------------ | - | --------------------------- | - | --------------------- | - | ------------------------------ | - | --------- | ------- | ------------------------------------------- | - | ------------------------------------------------- | - | ----------------------------------------------------- | ------- | --------------------
|                                                                               |   |                             |   | $                     |   | $                              |   | $         |         | $                                           |   | $                                                 |   | $                                                     |         | $                   
|                                                                               |   |                             |   |                       |   |                                |   |           |         |                                             |   |                                                   |   |                                                       |         |                     
|Balance at 30 April
    2007                                                   |   | 608,818                     |   | 608                   |   | 4,254,531                      |   | -         |         | -                                           |   | (4,258)                                           |   | (4,045,615)                                           |         | 205,266             
|Shares issued for cash ($3.38 per share)                                       |   | 51,600                      |   | 52                    |   | 174,309                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 174,361             
|Warrants granted                                                               |   | -                           |   | -                     |   | -                              |   | 53,639    |         | -                                           |   | -                                                 |   | -                                                     |         | 53,639              
|Shares issued for services rendered ($2.78 per share)                          |   | 63,511                      |   | 64                    |   | 176,446                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 176,510             
|Contribution to capital by related parties – services (Notes 9 and 13)         |   | -                           |   | -                     |   | 100,000                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 100,000             
|Stock-based compensation                                                       |   | -                           |   | -                     |   | -                              |   | 60,664    |         | -                                           |   | -                                                 |   | -                                                     |         | 60,664              
|Foreign currency translation adjustment                                        |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | (10)                                              |   | -                                                     |         | (10)                
|Net loss for the year                                                          |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | -                                                 |   | (576,091)                                             |         | (576,091)           
|                                                                               |   |                             |   |                       |   |                                |   |           |         |                                             |   |                                                   |   |                                                       |         |                     
|Balance at 30 April
    2008                                                   |   | 723,929                     |   | 724                   |   | 4,705,286                      |   | 114,303   |         | -                                           |   | (4,268)                                           |   | (4,621,706)                                           |         | 194,339             
|Shares issued for cash ($1.94 per share) (Note 10)                             |   | 3,333                       |   | 3                     |   | 6,472                          |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 6,475               
|Warrants granted for cash (Note 10)                                            |   | -                           |   | -                     |   | -                              |   | 18,525    |         | -                                           |   | -                                                 |   | -                                                     |         | 18,525              
|Shares issued for services rendered ($1.87 per share) (Notes 10 and 13)        |   | 190,933                     |   | 191                   |   | 393,809                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 394,000             
|Shares issued for property ($1.25 per share) (Notes 5, 9, 10, and 13)          |   | 200,000                     |   | 200                   |   | 249,800                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 250,000             
|Shares issued for debt ($5.00 per share)  (Notes 10 and 13)                    |   | 2,000                       |   | 2                     |   | 9,998                          |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 10,000              
|Contribution to capital by related parties – services (Notes 9 and 13)         |   | -                           |   | -                     |   | 100,000                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 100,000             
|Stock-based compensation
        (Notes 10 and 13)                             |   | -                           |   | -                     |   | -                              |   | 147,446   |         | -                                           |   | -                                                 |   | -                                                     |         | 147,446             
|Foreign currency translation adjustment                                        |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | 70                                                |   | -                                                     |         | 70                  
|Net loss for the year                                                          |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | -                                                 |   | (790,591)                                             |         | (790,591)           
|                                                                               |   |                             |   |                       |   |                                |   |           |         |                                             |   |                                                   |   |                                                       |         |                     
|Balance at 30 April
    2009                                                   |   | 1,120,195                   |   | 1,120                 |   | 5,465,365                      |   | 280,274   |         | -                                           |   | (4,198)                                           |   | (5,412,297)                                           |         | 330,264             
|Shares issued for property rescinded ($1.25 per share) (Notes 5, 9, 10 and 13) |   | (200,000)                   |   | (200)                 |   | (249,800)                      |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | (250,000)           
|Shares issued for cash ($0.61 per share) (Note 10)                             |   | 6,552                       |   | 6                     |   | 3,994                          |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 4,000               
|Shares issued for cash ($0.75 per share) (Note 10)                             |   | 13,333                      |   | 13                    |   | 9,987                          |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 10,000              
|Shares issued for cash ($1.75 per share) (Note 10)                             |   | 28,572                      |   | 29                    |   | 49,971                         |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 50,000              
|Shares issued for cash ($1.75 per share) (Note 10)                             |   | 28,572                      |   | 29                    |   | 49,971                         |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 50,000              
|Shares issued for services rendered (Notes 9, 10 and 13)                       |   | 3,500,083                   |   | 3,500                 |   | 673,175                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 676,675             
|Shares issued for property and equipment (Notes 5, 9, 10 and 13)               |   | 125,000                     |   | 125                   |   | 124,875                        |   | -         |         | -                                           |   | -                                                 |   | -                                                     |         | 125,000             
|Fair value of warrants issued                                                  |   | -                           |   | -                     |   | (507,524)                      |   | 507,524   |         | -                                           |   | -                                                 |   | -                                                     |         | -                   
|Stock-based compensation (Notes 10 and 13)                                     |   | -                           |   | -                     |   | -                              |   | 633,728   |         | -                                           |   | -                                                 |   | -                                                     |         | 633,728             
|Unrealized gain on available-for-sale investment (Note 4)                      |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | 231,929                                           |   | -                                                     |         | 231,929             
|Share subscriptions received in   advance (Note 10)                            | - |                             | - |                       | - |                                | - |           | 250,000 |                                             | - |                                                   | - |                                                       | 250,000
|Foreign currency translation adjustment                                        |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | (47)                                              |   | -                                                     |         | (47)                
|Net loss for the year (Note 16)                                                |   | -                           |   | -                     |   | -                              |   | -         |         | -                                           |   | -                                                 |   | (1,732,439)                                           |         | (1,732,439)         
|                                                                               |   |                             |   |                       |   |                                |   |           |         |                                             |   |                                                   |   |                                                       |         |                     
|Balance at 30 April
    2010 (Restated)                                        |   | 4,622,307                   |   | 4,622                 |   | 5,620,014                      |   | 1,421,526 |         | 250,000                                     |   | 227,684                                           |   | (7,144,736)                                           |         | 379,110             



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



31











Rotoblock Corporation

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity -Cont’d

(Expressed in U.S. Dollars)









|                                                                                 |             | Number
    of shares issued |         | Capital
        stock |             | Additional
    paid-in capital |   | Warrants  |   | Share
    subscriptions received in advance / Share subscriptions receivable |   | Accumulated other comprehensive income (loss) |   | Deficit,
    accumulated during the development stage |             | Stockholders equity
|-------------------------------------------------------------------------------- | ----------- | --------------------------- | ------- | --------------------- | ----------- | ------------------------------ | - | --------- | - | ---------------------------------------------------------------------------- | - | --------------------------------------------- | - | ----------------------------------------------------- | ----------- | -------------------
|                                                                                 |             |                             |         | $                     |             | $                              |   | $         |   | $                                                                            |   | $                                             |   | $                                                     |             | $                  
|                                                                                 |             |                             |         |                       |             |                                |   |           |   |                                                                              |   |                                               |   |                                                       |             |                    
|Balance at 30 April
    2010 (Restated)                                          |             | 4,622,307                   |         | 4,622                 |             | 5,620,014                      |   | 1,421,526 |   | 250,000                                                                      |   | 227,684                                       |   | (7,144,736)                                           |             | 379,110            
|Warrants exercised ($0.25 per share) (Note 10)                                   |             | 13,336                      |         | 13                    |             | 3,320                          |   | -         |   | -                                                                            |   | -                                             |   | -                                                     |             | 3,333              
|Warrants exercised in error ($0.25 per share) (Note 10)                          |             | 6,668                       |         | 3                     |             | 831                            |   | -         |   | -                                                                            |   | -                                             |   | -                                                     |             | 834                
|Warrants exercised ($0.25 per share) (Note 10)                                   |             | 38,000                      |         | 38                    |             | 9,462                          |   |           |   |                                                                              |   |                                               |   |                                                       |             | 9,500              
|Shares issued for conversion of promissory note in error (Notes 4, 7, 10 and 13) |             | 1,818,181                   |         | 1,819                 |             | 1,998,181                      |   | -         |   | -                                                                            |   | -                                             |   | -                                                     |             | 2,000,000          
|Shares issued for cash ($0.25 per share) (Note 10)                               |             | 1,000,000                   |         | 1,000                 |             | 249,000                        |   | -         |   | (250,000)                                                                    |   | -                                             |   | -                                                     |             | -                  
|Shares issued for services rendered (Notes 10 and 13)                            |             | 30,000                      |         | 30                    |             | 30,570                         |   | -         |   | -                                                                            |   | -                                             |   | -                                                     |             | 30,600             
|Unrealized gain on available-for-sale investment (Note 4)                        |             | -                           |         | -                     |             | -                              |   | -         |   | -                                                                            |   | (344,014)                                     |   | -                                                     |             | (344,014)          
|Fair value of warrants issued ($0.25 per share) (Note 10)                        |             | -                           |         | -                     |             | -                              |   | 33,000    |   | -                                                                            |   | -                                             |   | -                                                     |             | 33,000             
|Fair value of warrants exercised                                                 |             | -                           |         | -                     |             | 53,012                         |   | (53,012)  |   | -                                                                            |   | -                                             |   | -                                                     |             | -                  
|Foreign currency translation adjustment                                          |             | -                           |         | -                     |             | -                              |   | -         |   | -                                                                            |   | (26)                                          |   | -                                                     |             | (26)               
|Common shares to be           acquired for cancellation (Notes 10 and 15)        | (1,818,181) |                             | (1,819) |                       | (1,998,181) |                                | - |           | - |                                                                              | - |                                               | - |                                                       | (2,000,000)
|Net loss for the year                                                            |             | -                           |         | -                     |             | -                              |   | -         |   | -                                                                            |   | -                                             |   | (946,223)                                             |             | (946,223)          
|                                                                                 |             |                             |         |                       |             |                                |   |           |   |                                                                              |   |                                               |   |                                                       |             |                    
|Balance at 30 April
    2011                                                     |             | 5,710,311                   |         | 5,706                 |             | 5,966,209                      |   | 1,401,514 |   | -                                                                            |   | (116,356)                                     |   | (8,090,959)                                           |             | (833,886)          





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







31











Rotoblock Corporation

(A Development Stage Company)

Schedule 1 - Consolidated Administrative and General Expenses

(Expressed in U.S. Dollars)







|                                             |           | For the period from the date of inception on 2 September 2003 to
        30 April
        2011 (Unaudited) | For the
        year
        ended
        30 April
        2011 | For the
        year
        ended
        30 April
        2010
        (Restated) | For the
        year
        ended
        30 April
        2009
|-------------------------------------------- | --------- | ---------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ----------------------------------------------------------------
|                                             |           | $                                                                                                          | $                                                                | $                                                                                   | $                                                               
|                                             |           |                                                                                                            |                                                                  |                                                                                     |                                                                 
|Consulting fees (Notes 9, 10, 13 and 16)     |           | 1,419,399                                                                                                  | 332,598                                                          | 221,124                                                                             | 197,905                                                         
|Depreciation (Note 5)                        |           | 24,442                                                                                                     | 15,962                                                           | 3,098                                                                               | 1,414                                                           
|Foreign exchange loss                        |           | 1,545                                                                                                      | -                                                                | -                                                                                   | -                                                               
|Interest (Notes 7 and 13)                    |           | 163,432                                                                                                    | 120,085                                                          | 26,624                                                                              | 265                                                             
|Investor relations (Notes 10 and 13)         |           | 389,878                                                                                                    | 100,000                                                          | 50,000                                                                              | 96,000                                                          
|Listing, filing and transfer agent fees      |           | 60,816                                                                                                     | 5,322                                                            | 7,581                                                                               | 11,465                                                          
|Management fees (Notes 9 and 13)             |           | 300,000                                                                                                    | -                                                                | -                                                                                   | 100,000                                                         
|Office and sundry                            |           | 73,651                                                                                                     | 4,811                                                            | 8,319                                                                               | 11,709                                                          
|Professional fees                            |           | 558,249                                                                                                    | 72,099                                                           | 78,877                                                                              | 76,935                                                          
|Public relations and shareholder information | 191,659   | 813                                                                                                        | 9,409                                                            | 37,033                                                                             
|Rent                                         |           | 79,205                                                                                                     | -                                                                | -                                                                                   | -                                                               
|Research and development                     |           | 387,173                                                                                                    | -                                                                | 72,917                                                                              | -                                                               
|Salaries and wages (Notes 10, 12, 13 and 16) | 574,152   | 138,004                                                                                                    | 436,148                                                          | -                                                                                  
|Stock-based compensation (Notes 10 and 13)   | 3,157,726 | -                                                                                                          | 633,728                                                          | 147,446                                                                            
|Travel and entertainment                     | 435,579   | 162,049                                                                                                    | 149,253                                                          | 38,419                                                                             
|                                             |           |                                                                                                            |                                                                  |                                                                                     |                                                                 
|                                             |           | 7,816,906                                                                                                  | 951,743                                                          | 1,697,078                                                                           | 718,591                                                         









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







32













Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011









1.Nature and Continuance of Operations



Rotoblock Corporation (the “Company”) was incorporated under
the laws of the State of Nevada on 22 March 2004.



The Company is a development stage enterprise, as defined in Accounting
Standards Codification (the “Codification” or “ASC”) 915-10, “Development Stage Entities”.
The Company is focused on the development and manufacturing of a new type of patented oscillating piston engine and other energy-efficient
and environmental equipment in China for distribution worldwide. No revenue has been derived during the organization period and
the Company’s planned principle operations have not commenced.



The Company’s consolidated financial statements as at 30 April 2011 and
for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. The Company has a loss of $946,223 for the year ended 30 April
2011 (30 April 2010 – $1,732,439) and has a working capital deficiency of $1,827,651 at 30 April 2011 (30 April 2010 –
$977,631).



On 30 March 2004, the Company entered into a Share Exchange Agreement (the
“Agreement”) with Rotoblock Inc., a Canadian corporation, wherein the Company agreed to issue to the stockholders of
Rotoblock Inc. 300,000 common shares in exchange for the 144,000 shares that constituted all the issued and outstanding shares
of Rotoblock Inc. Effective 30 March 2004, Rotoblock Inc. completed the reverse acquisition under the Agreement with the Company.



Effective 3 February 2009, the Company effected a one (1) for fifty (50)
reverse stock split (Note 10). All share and warrant amounts presented in the consolidated financial
statements and in the notes thereto have been adjusted to reflect the reverse stock split. The effect of the reverse stock split
on 2003 to 2007 disclosures is unaudited.



Immediately after the acquisition, the management of Rotoblock Inc. took
control of the board and office positions of the Company, constituting a change of control. Because the former owners of Rotoblock
Inc. gained control of the Company, the transaction would normally have been considered a purchase by Rotoblock Inc. However, since
the Company was not a business, the transaction was not considered to be a business combination, and the transaction was accounted
for as a recapitalization of Rotoblock Inc. and the issuance of stock by Rotoblock Inc. for the assets and liabilities of the Company.
The value of the net assets of the Company acquired by Rotoblock Inc. was the same as their historical book value, being a deficiency
of $138.



Rotoblock Inc. was incorporated on 2 September 2003, under the laws of Canada.
The accompanying consolidated financial statements are the historical consolidated financial statements of Rotoblock Inc.







32











Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











Management cannot provide assurance that the Company will ultimately achieve
profitable operations or become cash flow positive, or raise additional debt and/or equity capital. However, based on its prior
demonstrated ability to raise capital, management believes that the Company’s capital resources should be adequate to continue
operating and maintaining its business strategy during the fiscal year ending 2012. However, if the Company is unable to raise
additional capital in the near future, due to the Company’s liquidity problems, management expects that the Company will
need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.
These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets
or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



At 30 April 2011, the Company has suffered losses from development stage
activities to date. Although management is currently attempting to implement its business plan, and is seeking additional sources
of equity or debt financing, there is no assurance these activities will be successful. Accordingly, the Company must rely on its
management to perform essential functions without compensation until a business operation can be commenced. These factors raise
substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.



2.Significant Accounting Policies



The following is a summary of significant accounting policies used in the
preparation of these consolidated financial statements.



The Accounting Standards Codification



In June 2009, the Financial Accounting Standards Board (“FASB”)
issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principle – a replacement of FASB Statement No. 162”. The Codification
reorganized existing U.S. accounting and reporting standards issued by the FASB and other related private sector standard setters
into a single source of authoritative accounting principles arranged by topic. The Codification supersedes all existing U.S. accounting
standards; all other accounting literature not included in the Codification (other than Securities and Exchange Commission guidance
for publicly-traded companies) is considered non-authoritative. The Codification was effective on a prospective basis for interim
and annual reporting periods ending after 15 September 2009. The adoption of the Codification changed the Company’s references
to accounting principles generally accepted in the United States of America (“U.S. GAAP”) but did not impact the Company’s
results of operations, financial position or liquidity.



Basis of presentation



The consolidated financial statements of the Company have been prepared in
accordance with U.S. GAAP and are expressed in U.S. dollars.





33











Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











Principles of consolidation



These consolidated financial statements include the accounts of the Company
from the date of reverse acquisition on 30 March 2004, and its wholly owned Canadian subsidiary, Rotoblock Inc. since its date
of incorporation on 2 September 2003. All inter-company balances and transactions have been eliminated on consolidation (Note 1).



Fiscal period



The Company’s fiscal year ends on 30 April.



Risks and uncertainties



The Company operates in an emerging industry that is subject to market acceptance
and technological change. The Company’s operations are subject to significant risks and uncertainties, including financial,
operational, technological and other risks associated with operating an emerging business, including the potential risk of business
failure.



Cash and cash equivalents



Cash and cash equivalents include highly liquid investments with original
maturities of three months or less.



Financial instruments



Fair Value

The carrying values of cash and cash equivalents, amounts
receivable, available-for-sale investments, due to related party and accounts payable approximate their fair values because
of the short-term maturity of these financial instruments.



Interest Rate Risk



The Company is not exposed to significant interest rate risk due to the
short-term maturity of its monetary assets and liabilities.



Credit Risk



The Company’s financial instruments that are exposed to concentrations
of credit risk primarily consist of its cash and cash equivalents and accounts receivable. The Company places its cash with financial
institutions of high credit worthiness. At times, its cash with a particular financial institution may exceed any applicable government
insurance limits.





34











Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011









Currency Risk



The Company’s functional and reporting currency is the U.S. dollar.
Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are
included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company
has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign
currency fluctuations.



Derivative financial instruments



The Company has not, to the date of these consolidated financial statements,
entered into derivative instruments to offset the impact of foreign currency fluctuations.



Income taxes



Deferred income taxes are reported for timing differences between items of
income or expense reported in the financial statements and those reported for income tax purposes in accordance with ASC 740, “Income
Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax
benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects
attributable to temporary differences and carry-forwards when realization is more likely than not.



Basic and diluted net income (loss) per share



The Company computes net income (loss) per share in accordance with ASC 260,
“Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”)
on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator)
by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive
potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares
assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their
effect is anti-dilutive.





1,824,849 of the common shares outstanding as at 30 April 2011 are contingently
cancelable and have been excluded from the weighted average number of common shares outstanding (Note 10).





Comprehensive loss



ASC 220, “Comprehensive Income”, establishes standards for the reporting
and display of comprehensive loss and its components in the financial statements. As at 30 April 2011, the Company has items that
represent a comprehensive loss and, therefore, has included a schedule of comprehensive loss in the consolidated financial
statements.





35









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











Property, equipment and depreciation



Property and equipment have been recorded at cost, net of
accumulated depreciation (Note 5). Improvements are capitalized and maintenance, repairs and minor replacements are expensed as
incurred. Depreciation is determined using a declining-balance basis over its estimated useful life of:



Equipment 	5 years at 20%

Vehicles	  12 years at 8%



Long lived assets



Long-term assets of the Company are reviewed for impairment whenever events
or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15,
“Impairment or Disposal of Long-Lived Assets”.



Management considers assets to be impaired if the carrying value exceeds the
future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist,
the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.



Segments of an enterprise and related information



ASC 280, “Segment Reporting”
establishes guidance for the way that public companies report information about operating segments
in annual financial statements and requires reporting of selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major
customers. ASC 280 defines operating segments as components of a company about which separate financial information is available
that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
The Company has evaluated this Codification and does not believe it is applicable at this time.



Foreign currency translation



The Company’s functional and reporting currency is U.S. dollars. The consolidated
financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.
Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are
included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into
derivative instruments to offset the impact of foreign currency fluctuations.





36









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











Stock-based compensation



Effective 1 January 2006, the Company adopted the provisions of ASC 718, “Compensation
– Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services. Under the
provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award,
and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity
grant). The Company adopted ASC 718 using the modified prospective method, which requires the Company to record compensation expense
over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards
that remain outstanding at the date of adoption.  Accordingly, financial statements for the periods prior to 1 January 2006
have not been restated to reflect the fair value method of expensing share-based compensation.  The adoption of ASC 718 did
not change the way the Company accounts for share-based payments to non-employees, with guidance provided by ASC 505-50, “Equity-Based
Payments to Non-Employees”.



Research and development



Research and development costs are expensed as incurred.



Patents



The Company accounts for patent costs in accordance with ASC 350, “Intangibles
- Goodwill and Other”. In accordance with that statement, intangible assets with estimable lives, such as a patent,
are amortized on a straight-line basis over the estimated useful lives and are reviewed for impairment in accordance with ASC 350-35-14,
“Recognition and Impairment of an Impairment Loss”.



Use of estimates



The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting
period. Actual results could differ from these estimates.



Accounting for Transfers of Financial Assets



In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers
of Financial Assets—an amendment of FASB Statement”.  SFAS No. 166 is intended to establish standards of
financial reporting for the transfer of assets and transferred assets to improve the relevance, representational faithfulness,
and comparability.  SFAS No. 166 was established to clarify derecognition of assets under FASB Statement No. 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”.   The adoption of this
guidance did not have a material impact on the Company’s consolidated financial statements.





37









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











Changes in accounting policies



In February 2010, the FASB issued Accounting Standards Update (“ASU”)
No. 2010-11, “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives”. ASU No.
2010-11 clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Specifically,
only one form of embedded credit derivative qualifies for the exemption – one that is related only to the subordination of
one financial instrument to another. As a result, entities that have contracts containing an embedded credit derivative feature
in a form other than such subordination may need to separately account for the embedded credit derivative feature. The amendments
in ASU No. 2010-11 are effective for each reporting entity at the beginning of its first fiscal quarter beginning after 15 June
2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after 5 March 2010. The
adoption of ASU No. 2010-11 did not have a material impact on the Company’s consolidated financial statements.



In February 2010, the FASB issued ASU No. 2010-09, “Amendments
to Certain Recognition and Disclosure Requirements”, which eliminates the requirement for Securities and Exchange Commission
(“SEC”) filers to disclose the date through which an entity has evaluated subsequent events.  ASU No. 2010-09
is effective for its fiscal quarter beginning after 15 December 2010.  The adoption of ASU No. 2010-09 did not have a material
impact on the Company’s consolidated financial statements.



3.Patents



On 15 September 2003, the Company entered into an option agreement (the “Option”)
to purchase certain patents related to the Oscillating Piston Engine (the “OPE Patents”). Under the terms of the Option,
the Company is required to pay $100,000 in cash by 31 May 2004 (paid) plus interest at the rate of 24% per annum calculated from
31 January 2004 until the $100,000 cash was paid (total interest paid - $8,745), and $1,500,000 in cash by 2 June 2007.



On 25 October 2006, the Company negotiated an extension to exercise the Option
by thirty seven months. Pursuant to the amended option agreement the Company must pay a royalty of $50 per engine on the sale of
up to 10,000 oscillating piston engines (“OPE”), a royalty of $20 per engine on the sale of up to 100,000 OPE, and
a royalty of $2 per engine thereafter. As at 30 April 2011, no engines have been sold.



During the year ended 30 April 2010, the Company recorded a provision for
a write-down in the amount of $108,745 related to the OPE Patents.





38







Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011













4.Available-for-Sale Investments



|                                                      |  |                   |  | Unrealized
    gain (loss) |                                                                                                      | Fair
    value
|----------------------------------------------------- |  | ----------------- |  | -------------------------- | ---------------------------------------------------------------------------------------------------- | --------------
|                                                      |  | Adjusted
    cost |  |                            | 30
                                                                               April
        2011 |               
|                                                      |  | $                 |  | $                          |                                                                                                      | $             
|                                                      |  |                   |  |                            |                                                                                                      |               
|977,966 common
    shares of Samyang Optics Co., Ltd. |  | 1,000,000         |  | (112,085)                  |                                                                                                      | 887,915       



On 11 February 2010, the Company entered into an Investment Agreement with
Samyang Optics Co. Ltd. (“Samyang”), a South Korean Corporation listed on the Korea Exchange, whereby Samyang loaned
the Company $2,000,000 in the form of a convertible promissory note (Note 7). In turn, the Company acquired 977,966 shares of Samyang
for the amount of $1,000,000.



Available-for-sale investments are carried at fair value, with unrealized
gains and losses recorded as other comprehensive income and other than temporary losses recognized in net income (Note 14). As
of 30 April 2011, the shares of Samyang were measured at a fair value of $887,915 (30 April 2010 - $1,231,929) and resulted in
an unrealized loss of $344,014 during the year ended 30 April 2011 (30 April 2010 – gain of $231,929).



5.Property and Equipment



|          |  |         |  | Accumulated
        depreciation |                                                                                                      | Net
    book value
|--------- |  | ------- |  | -------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------
|          |  | Cost    |  |                                  | 30
                                                                               April
        2011 |                   
|          |  | $       |  | $                                |                                                                                                      | $                 
|          |  |         |  |                                  |                                                                                                      |                   
|Equipment |  | 52,940  |  | 13,090                           |                                                                                                      | 39,850            
|Vehicles  |  | 75,000  |  | 6,000                            |                                                                                                      | 69,000            
|          |  |         |  |                                  |                                                                                                      |                   
|          |  | 127,940 |  | 19,090                           |                                                                                                      | 108,850           



During the year ended 30 April 2011, total additions to property and equipment
were $Nil (30 April 2010 – $125,000).  During the year ended 30 April 2011, total dispositions of property and equipment
were $Nil (30 April 2010 - $248,618).





39









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











On 24 November 2008, the Company entered into an Asset Purchase and Balance
Sheet Enhancement Agreement with a related party (the “Related Party”) to acquire an undivided 25% tenancy-in-common interest
in a property located in Merced, California (the “Property Agreement”).  The purchase price of the land and
building was $250,000 and was paid for by the issuance of 200,000 shares of common stock of the Company valued at $250,000.  On
29 July 2009, the Company disposed of the land and building back to the Related Party for proceeds of $250,000 resulting in a gain
of $1,384.  As consideration, the Related Party returned the 200,000 shares of common stock of the Company valued at
$250,000 and these shares were cancelled on 29 July 2009 (Notes 9, 10 and 13).



On 8 February 2010, the Company entered into an Asset Purchase Agreement
with a non-related individual to acquire security and computer equipment valued at $50,000. The purchase price of the equipment
was paid for by the issuance of 50,000 shares of common stock of the Company valued at $50,000 (Notes 10 and 13).



On 10 February 2010, the Company entered into an Asset Purchase Agreement
with a non-related company to acquire a number of vehicles valued at $75,000. The purchase price of the vehicles was paid for by
the issuance of 75,000 shares of common stock of the Company valued at $75,000 (Notes 10 and 13).



6.Accounts Payable and Accrued Liabilities



Accounts payable and accrued liabilities are non-interest bearing, unsecured
and have settlement dates within one year.





7.Convertible Promissory Note



On 11 February 2010, the Company entered into a Convertible Promissory Note
Agreement (the “Convertible Promissory Note Agreement”) with Samyang for $2,000,000 cash (Note 4). The principal balance
bears interest at a rate of 6% per annum. All unpaid principal, together with any unpaid and accrued interest was due and payable
on the earlier of 11 February 2012 or when such amounts are declared due and payable by Samyang (the “promissory note”).





All principal, together with all accrued and unpaid interest, shall automatically
convert into common shares of the Company at a price of $1.10 per share on 11 February 2012 or such other date designated by Samyang
at its discretion.







On 13 May 2010, the Company issued 1,818,181 common shares valued at $1.10
per share in error in contemplation of the conversion of the Promissory Note by Samyang. These shares have been returned to treasury
and the Company is currently in the process of cancelling the 1,818,181 common shares issued in error (Notes 10, 12, 13 and 15).





The balance of convertible promissory note as at 30 April 2011 consists
of principal and accrued interest of $2,000,000 (30 April 2010 - $2,000,000) and $145,644 (30 April 2010 - $25,644), respectively.













40









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











8.Due to Related Party



As at 30 April 2011, the amount due to a related party is $702 (30 April
2010 - $663), which is payable to a former director and stockholder of the Company. This balance is non-interest bearing, unsecured
and has no fixed terms of repayment.



9.Related Party Transactions



During the year ended 30 April 2011, officers and directors of the Company made
contributions to capital for management fees of $Nil (30 April 2010 - $Nil, 30 April 2009 - $Nil; cumulative - $300,000). These
amounts have been recorded as an increase in expenditures and an increase in additional paid-in capital (Note 13).





During the year ended 30 April 2011, the Company paid/accrued $138,004 (30 April 2010
– $188,625) to related parties for salaries and wages.





During the year ended 30 April 2011, the Company issued Nil (30 April 2010 –
1,115,833) shares with a fair value of $Nil (30 April 2010 - $192,375) to related parties for consulting services. Of this, $Nil
(30 April 2010 - $191,630) was expensed during the year ended 30 April 2011 and the remaining $Nil (30 April 2010 - $745) was classified
as prepaid expense  (Notes 10 and 13).



On 24 November 2008, the Company entered into a Property Agreement with a Related
Party to acquire an undivided 25% tenancy-in-common interest in a property located in Merced, California.  The purchase
price of the land and building was $250,000 and was paid for by the issuance of 200,000 shares of common stock of the Company valued
at $250,000.  On 29 July 2009, the Company disposed of the land and building back to the Related Party for proceeds of
$250,000 resulting in a gain of $1,384.  As consideration, the Related Party returned the 200,000 shares of common stock
of the Company valued at $250,000 and these shares were cancelled on 29 July 2009 (Notes 5, 10 and 13).



10.Capital Stock



Effective 3 February 2009, the Company effected a one (1) for fifty (50)
reverse stock split (Note 1). All share and warrant amounts presented in the consolidated financial
statements and in the notes thereto have been adjusted to reflect the reverse stock split. The effect of the reverse stock split
on 2003 to 2007 disclosures is unaudited.



Authorized capital stock consists of 200,000,000 common shares with par value
of $0.001 per share and 50,000,000 preferred shares with par value of $0.001 per share.



i.During the year ended 30 April 2009, the Company issued 1,000 common shares valued at $4.00
per common share for $4,000 in consulting services (Note 13).



ii.During the year ended 30 April 2009, the Company issued 6,400 common shares valued at $15.00
per common share for $96,000 in investor relations (Note 13). These shares were restricted from trading for a period of one year
as defined by Rule 144 of the United States Securities Act of 1933.





41









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











iii.During the year ended 30 April 2009, the Company issued 16,000 units valued at $4.00 per common
share each for $64,000 as compensation to the chief executive officer of the company. Each unit consists of one restricted common
share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company
at a cost of $7.50 expiring 12 May 2013 with a fair value of $147,446. As at 30 April 2011, 16,000 of the share purchase warrants
in this series remain outstanding. These shares were restricted from trading for a period of one year as defined by Rule 144 of
the United States Securities Act of 1933 (Note 13).



iv.During the year ended 30 April 2009, the Company issued 1,333 common shares valued at $7.50
per common share each for $10,000 for legal services (Note 13).



v.During the year ended 30 April 2009, the Company issued 1,000 common shares valued at $7.50
per common share for $7,500 in public relations (Note 13). These shares were restricted from trading for a period of one year as
defined by Rule 144 of the United States Securities Act of 1933.



vi.During the year ended 30 April 2009, the Company issued 3,200 common shares valued at $7.50
per common share for $24,000 in consulting expense to a related party (Note 13).

vii.During the year ended 30 April 2009, the Company issued 5,000 common shares valued at $5.50
per common share for $27,500 in consulting to a related party (Note 13). These shares were restricted from trading for a period
of one year as defined by Rule 144 of the United States Securities Act of 1933.



viii.During the year ended 30 April 2009, the Company issued 3,333 units valued at $7.50 per unit
for total cash proceeds of $25,000. Each unit consists of one restricted common share and one common share purchase warrant. Each
whole common share purchase warrant entitles the holder to purchase an additional common share at a price of $12.50 per share for
a period of five years from the date of offering with a fair value of $18,525. As at 30 April 2011, 3,333 of the share purchase
warrants in this series remain outstanding. These shares were restricted from trading for a period of one year as defined by Rule
144 of the United States Securities Act of 1933.



ix.During the year ended 30 April 2009, the Company issued 2,000 common shares valued at $5.00
per common share for $10,000 in repayment for a convertible promissory note (Note 13).



x.During the year ended 30 April 2009, the Company issued 2,000 common shares valued at $3.00
per common share for $6,000 in consulting expense (Note 13). Of this amount, $Nil was expensed during the year ended 30 April
2011 (30 April 2010 - $2,729, 30 April 2009 - $3,271, cumulative - $6,000).



xi.During the year ended 30 April 2009, the Company issued 200,000 shares of common stock valued
at $1.25 per share purchase for land and building from a Related Party valued at $250,000 (Notes 5, 9 and 13). These shares were
restricted from trading for a period of one year as defined by Rule 144 of the United States Securities Act of 1933.



xii.During the year ended 30 April 2009, the Company issued 5,000 common shares valued at $1.00
per common share for $5,000 in legal services (Note 13).





42









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011









xiii.During
the year ended 30 April 2009, the Company issued 150,000 common shares valued $1.00 per common share at $150,000 in
retainer for consulting expenses to two related parties (Note 13). Of this amount, $Nil was expensed during the year ended 30
April 2011 (30 April 2010 - $75,616, 30 April 2009 - $74,384, cumulative - $150,000). These shares were restricted from
trading for a period of one year as defined by Rule 144 of the United States Securities Act of 1933.



xiv.During the year ended 30 April 2010, the Related Party returned to treasury 200,000 shares
of common stock of the Company valued at $1.25 per common share for a total value of $250,000, related to the disposal of
land and building acquired from a Related Party pursuant to the Property Agreement entered into on 24 November 2008. 
These shares were cancelled on 29 July 2009 (Notes 5, 9 and 13).



xv.During the year ended 30 April 2010, the Company issued 6,552 common shares valued at $0.61
per common share for cash of $4,000. These shares were restricted from trading for a period of one year as defined by Rule 144
of the United States Securities Act of 1933.



xvi.During the year ended 30 April 2010, the Company issued 13,333 common shares valued at $0.75
per common share for cash of $10,000. These shares were restricted from trading for a period of one year as defined by Rule 144
of the United States Securities Act of 1933.



xvii.During the year ended 30 April 2010, the Company issued 3,500,083 common shares valued at prices from $0.15 to $1.00 per
common share for $676,675 in consulting expense and salaries and wages (Notes 9 and 13).



xviii.During the year ended 30 April 2010, the Company issued 550,000 common share purchase warrants
valued at $633,728 for stock-based compensation. Each common share purchase warrant entitles the holder to purchase one common
share at a price of $0.25 to $1.00 for a period of five years from the date of offering. As at 30 April 2011, 550,000 of the share
purchase warrants in these series remain outstanding (Note 13).



xix.During the year ended 30 April 2010, the Company issued 8,585,083 common share purchase warrants
valued at $469,113 for consulting services. Each common share purchase warrant entitles the holder to purchase one common share
at a price of $0.25 to $1.00 for a period of five or ten years from the date of offering. As at 30 April 2011, 8,565,083 of the
share purchase warrants in these series remain outstanding (Notes 9 and 13).



xx.During the year ended 30 April 2010, the Company issued 28,572 units valued at $1.75 consisting
of one share and two warrants for total cash proceeds of $50,000. Each whole common share purchase warrant entitles the holder
to purchase an additional common share at a price of $2.50 per share for a period of five years up to 22 July 2014. These shares
were restricted from trading for a period of one year as defined by Rule 144 of the United States Securities Act of 1933. As at
30 April 2011, 57,144 share purchase warrants in this series remain outstanding.





43









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











xxi.During the year ended 30 April 2010, the Company issued 28,572 shares valued at $1.75 for
total cash proceeds of $50,000. These shares were restricted from trading for a period of one year as defined by Rule 144 of the
United States Securities Act of 1933.



xxii.During the year ended 30 April 2010, the Company entered into an Asset Purchase Agreement
with a non-related individual to acquire security and computer equipment valued at $50,000. The purchase price of the equipment
was paid for by the issuance of 50,000 shares of common stock of the Company valued at $50,000 (Notes 5 and 13).



xxiii.During the year ended 30 April 2010, the Company entered into an Asset Purchase Agreement with a non-related company to
acquire a number of vehicles valued at $75,000. The purchase price of the vehicles was paid for by the issuance of 75,000
shares of common stock of the Company valued at $75,000 (Notes 5 and 13).





xxiv.     During
the year ended 30 April 2011, the Company issued 30,000 warrants valued at $33,000 for services rendered. Each whole common
share purchase warrant entitles the holder to purchase a common share at a price of $0.25 per share for a period of five
years. During the year ended 30 April 2011, the Company issued 18,000 common shares valued at $0.25 per common share for cash
of $4,500 upon exercise of the share purchase warrants. These shares were restricted from trading for a period of one year
as defined by Rule 144 of the United States Securities Act of 1933. As at 30 April 2011, 12,000 warrants in this series
remain outstanding.



xxv.      During
the year ended 30 April 2011, the Company issued 13,336 common shares valued at $0.25 per common share for proceeds of $3,333
upon exercise of warrants. These shares were restricted from trading for a period of one year as defined by Rule 144 of the United
States Securities Act of 1933.



xxvi.During the year ended 30 April 2011, the Company issued 1,818,181 common shares valued at $1.10 per common share in error in
contemplation of the conversion of the Promissory Note by Samyang. These shares have been returned to treasury and the
Company is currently in the process of cancelling these 1,818,181 common shares issued in error (Notes 7, 12, 13 and
15).



xxvii.During
the year ended 30 April 2011, the Company issued 1,000,000 common shares valued at $0.25 per common share related to share subscriptions
received in advance in the amount of $250,000 (Note 13). These shares were restricted from trading for a period of one year as
defined by Rule 144 of the United States Securities Act of 1933.



xxviii.During the year ended 30 April 2011, the Company issued 30,000 common shares valued at $1.02 per common share for $30,600 in consulting
fees (Note 13). These shares were restricted from trading for a period of one year as defined by Rule 144 of the United States
Securities Act of 1933.



xxix.     During the year ended 30 April 2011, a total of 59,200 previously outstanding share purchase warrants expired.









44









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











xxx.During
the year ended 30 April 2011, the Company issued 3,334 common shares valued at $0.25 per common share in error. As at 30 April
2011, the Company is in the process of obtaining the 3,334 common shares to be returned to treasury for cancellation. (Notes 12,
13 and 15).



xxxi.During
the year ended 30 April 2011, the Company issued 3,334 common shares valued at $Nil per common share in error. As at 30 April
2011, the Company is in the process of obtaining the 3,334 common shares to be returned to treasury for cancellation (Notes 12,
13 and 15).



xxxii.During
the year ended 30 April 2011, the Company issued 20,000 common shares valued at $0.25 per common share for proceeds of $5,000
upon exercise of warrants. These shares were restricted from trading for a period of one year as defined by Rule 144 of the United
States Securities Act of 1933.





Share Subscriptions Received in Advance



During the year ended 30 April 2010, the Company received $250,000 for the purchase of 1,000,000 common shares in the Company. These shares were issued on 18 October 2010.



Share Purchase Warrants



The following share purchase warrants were outstanding at 30 April 2011:



| |          |  | Exercise
    price |  | Number
        of warrants |  | Remaining
        contractual life (years)
| | -------- |  | ------------------ |  | -------------------------- |  | ------------------------------------------
| |          |  | $                  |  |                            |  |                                           
| |          |  |                    |  |                            |  |                                           
| | Warrants |  | 7.50               |  | 50,000                     |  | 0.61                                      
| | Warrants |  | 12.50              |  | 7,600                      |  | 1.36                                      
| | Warrants |  | 7.50               |  | 20,000                     |  | 1.92                                      
| | Warrants |  | 7.50               |  | 16,000                     |  | 2.03                                      
| | Warrants |  | 12.50              |  | 3,333                      |  | 2.18                                      
| | Warrants |  | 0.25               |  | 25,000                     |  | 3.21                                      
| | Warrants |  | 0.25               |  | 25,000                     |  | 3.23                                      
| | Warrants |  | 0.50               |  | 200,000                    |  | 3.23                                      
| | Warrants |  | 2.50               |  | 57,144                     |  | 3.23                                      
| | Warrants |  | 0.25               |  | 2,181,750                  |  | 3.79                                      
| | Warrants |  | 1.00               |  | 50,000                     |  | 3.79                                      
| | Warrants |  | 0.25               |  | 333,333                    |  | 3.83                                      
| | Warrants |  | 1.00               |  | 300,000                    |  | 3.88                                      
| | Warrants |  | 0.25               |  | 12,000                     |  | 3.96                                      
| | Warrants |  | 0.25               |  | 6,000,000                  |  | 8.89                                      
| |          |  |                    |  |                            |  |                                           
| |          |  |                    |  | 9,281,160                  |  |                                           





45











Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











The following is a summary of warrant activities for the fiscal years ended
30 April 2011 and 2010:



| |                                                                     |  | Number
    of warrants |  | Weighted
    average exercise price
| | ------------------------------------------------------------------- |  | ---------------------- |  | -----------------------------------
| |                                                                     |  |                        |  | $                                  
| |                                                                     |  |                        |  |                                    
| | Outstanding
    and exercisable at 1 May 2009                       |  | 169,467                |  | 15.97                              
| | Granted                                                             |  | 9,192,227              |  | 0.30                               
| | Exercised                                                           |  | -                      |  | -                                  
| | Expired                                                             |  | -                      |  | -                                  
| |                                                                     |  |                        |  |                                    
| | Outstanding
    and exercisable at 30 April 2010                    |  | 9,361,694              |  | 0.58                               
| |                                                                     |  |                        |  |                                    
| | Weighted
    average fair value of warrants granted during the year |  | 0.12                  
| |                                                                     |  |                       
| | Outstanding
    and exercisable 1 May 2010                          |  | 9,361,694              |  | 0.58                               
| | Granted                                                             |  | 30,000                 |  | 0.25                               
| | Exercised                                                           |  | (51,334)               |  | 0.25                               
| | Expired                                                             |  | (59,200)               |  | 12.50                              
| |                                                                     |  |                        |  |                                    
| | Outstanding
    and exercisable 30 April 2011                       |  | 9,281,160              |  | 0.38                               
| |                                                                     |  |                        |  |                                    
| | Weighted
    average fair value of warrants granted during the year |  | 1.10                  



The weighted average grant date fair value of warrants issued during the
year ended 30 April 2011 amounted to $1.10 per warrant (30 April 2010 - $0.12 per warrant). The fair value of each warrant
granted was determined using the Black-Scholes warrant pricing model and the following assumptions:



| |                             |  |  | As
                                                                                              at
        30 April
        2011 | As
                                                                                              at
        30 April
        2010
| | --------------------------- |  |  | --------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------
| |                             |  |  |                                                                                                                                   |                                                                                                                                  
| | Risk
    free interest rate |  |  | 2.47%                                                                                                                             | 1.49%
    - 2.36%                                                                                                                
| | Expected
    life           |  |  | 5.0 years                                                                                                                         | 5.0
    - 10.0 years                                                                                                             
| | Annualized
    volatility   |  |  | 603%                                                                                                                              | 580%
    - 596%                                                                                                                  
| | Expected
    dividends      |  |  | -                                                                                                                                 | -                                                                                                                                





46









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011









Restricted Common Shares



As at 30 April 2011, a total of 5,710,311  common shares are
outstanding. Of these, 4,219,893 were restricted from trading as defined under Rule 144 of the United States Securities Act
of 1933.





During the year ended 30 April 2011, the Company issued 1,818,181 common
shares valued at $1.10 per common share in error in contemplation of the conversion of the Promissory Note by Samyang. These shares
have been returned to treasury and the Company is currently in the process of cancelling these 1,818,181 common shares issued in
error (Notes 7, 12 and 15).



During the year ended 30 April 2011, the Company issued 3,334 common shares
valued at $0.25 per common share and 3,334 common shares valued at $Nil per common share in error. As at 30 April 2011, the Company
is in the process of obtaining the 6,668 common shares to be returned to treasury for cancellation (Notes 6, 12 and 15).







11.Income Taxes



The Company has losses carried forward for income tax purposes to 30 April 2011.
There are no current or deferred tax expenses for the year ended 30 April 2011 due to the Company’s loss position. The Company
has not reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for
financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the
deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net
operating loss carry forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance
for financial reporting purposes.



The provision for refundable federal income tax consists of the following:



| |                                         |  | For
                                                                                              the
        year
        ended
        30 April
        2011 |  | For
                                                                                              the
        year
        ended
        30 April
        2010

(Restated)
| | --------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                         |  | $                                                                                                                                                              |  | $                                                                                                                                                                         
| | Deferred
    tax asset attributable to: |  |                                                                                                                                                                |  |                                                                                                                                                                           
| | Current
    operations                  |  | 331,178                                                                                                                                                        |  | 606,354                                                                                                                                                                   
| | Permanent differences                   |  | (11,550)                                                                                                                                                       |  | (257,686)                                                                                                                                                                 
| | Change
    in valuation allowance       |  | (388,702)                                                                                                                                                      |  | (324,810)                                                                                                                                                                 
| | Foreign
    exchange                    |  | 69,074                                                                                                                                                         |  | (23,858)                                                                                                                                                                  
| |                                         |  |                                                                                                                                                                |  |                                                                                                                                                                           
| | Net
    refundable amount               |  | -                                                                                                                                                              |  | -                                                                                                                                                                         





47









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011











The composition of the Company’s deferred tax asset as at 30 April 2011
and 2010 is as follows:



| |                                       |  | As
                                                                                              at
        30 April
        2011 |  | As
                                                                                              at
        30 April 2010

(Restated)
| | ------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------
| |                                       |  | $                                                                                                                                 |  | $                                                                                                                                    
| |                                       |  |                                                                                                                                   |  |                                                                                                                                      
| | Net
    operating loss carry forward  |  | 4,454,281                                                                                                                         |  | 3,333,065                                                                                                                            
| |                                       |  |                                                                                                                                   |  |                                                                                                                                      
| | Statutory
    federal income tax rate |  | 25%
    - 35%                                                                                                                     |  | 25%
    - 35%                                                                                                                        
| | Effective
    income tax rate         |  | 0%                                                                                                                                |  | 0%                                                                                                                                   
| |                                       |  |                                                                                                                                   |  |                                                                                                                                      
| | Deferred
    tax asset                |  | 1,499,254                                                                                                                         |  | 1,110,552                                                                                                                            
| | Less:
    Valuation allowance         |  | (1,499,254)                                                                                                                       |  | (1,110,552)                                                                                                                          
| | Other                                 |  |                                                                                                                                   |  |                                                                                                                                      
| |                                       |  | -                                                                                                                                 |  | -                                                                                                                                    



The potential income tax benefit of these losses has been offset by a full valuation
allowance.



As at 30  April 2011, the Company has unused non-capital losses for
Canadian tax purposes of approximately $597,447 that are available to offset future taxable income. This unused non-capital
loss carry forward balance for income tax purposes expires between the years 2014 and 2031.



As at 30 April 2011, the Company has unused net operating losses for
U.S. federal income tax purposes of approximately $3,856,834 that are available to offset future taxable income. This unused
net operating loss carry forward balance for income tax purposes expires between the years 2025 and 2031.



12.	Commitments and Contingency



i.On
15 November 2007, the Company filed its intention to register 100,000 common shares of the Company to be covered under S8 Registration
for future issuances to any and all consultants, employees, attorneys, officers and directors of the Company at a proposed maximum
offering price of $4.50 per common share.



ii.The
Company is committed to issuing 25,000 shares valued at $3,750 pursuant to the one-year consulting agreement for consulting services.





i.During
the year ended 30 April 2011, the Company issued 3,334 common shares valued at $0.25 per common share and 3,334 common shares valued
at $Nil per common share in error. As at 30 April 2011, the Company is in the process of obtaining the 6,668 common shares to be
returned to treasury for cancellation (Notes 10, 13 and 15).



ii.During
the year ended 30 April 2011, the Company issued 1,818,181 common shares valued at $1.10 per common share in error in contemplation
of the conversion of the Promissory Note by Samyang. These shares have been returned to treasury and the Company is currently in
the process of cancelling these 1,818,181 common shares issued in error (Notes 7, 10 and 15).











48









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011













13.	Supplemental Disclosures with
Respect to Cash Flows



| |                                                  | For the period from the date of inception on
        2 September 2003 to
        30 April
        2011

(Unaudited) | For the
        year
        ended
        30 April
        2011 | For the
        year
        ended
        30 April
        2010 | For the
        year
        ended
        30 April
        2009
| | ------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------------------------------
| |                                                  | $                                                                                                                   | $                                                                | $                                                                | $                                                               
| |                                                  |                                                                                                                     |                                                                  |                                                                  |                                                                 
| | Cash paid during
    the period for interest     | 11,362                                                                                                              | -                                                                | -                                                                | -                                                               
| | Cash paid during
    the period for income taxes | -                                                                                                                   | -                                                                | -                                                                | -                                                               











During the year ended 30 April 2011, officers and directors of the Company made
contributions to capital for management fees of $Nil (30 April 2010 - $Nil; 30 April 2009 - $100,000; cumulative - $300,000) (Note
9).





During the year ended 30 April 2011, the Company issued 30,000 common shares
valued at $1.02 per common share for $30,600 in consulting fees (Note 10).



During the year ended 30 April 2011, the Company issued 30,000 warrants valued
at $33,000 for services rendered. Each whole common share purchase warrant entitles the holder to purchase a common share at a
price of $0.25 per share for a period of five years (Note 10).





During the year ended 30 April 2011, the Company issued 1,818,181 common shares
valued at $1.10 per common share in error in contemplation of the conversion of the Promissory Note by Samyang. These shares have
been returned to treasury and the Company is currently in the process of cancelling these 1,818,181 common shares issued in error
(Notes 7, 10, 12 and 15).



During the year ended 30 April 2011, the Company issued 3,334 common shares
valued at $0.25 per common share and 3,334 common shares valued at $Nil per common share in error. As at 30 April 2011, the Company
is in the process of obtaining the 6,668 common shares to be returned to treasury for cancellation (Notes 10, 12 and 15).





During the year ended 30 April 2010, the Company issued 3,500,083 common shares
valued at prices from $0.15 to $1.00 per common share for $676,675 in consulting expense and salaries and wages (Notes 9 and 10).



During the year ended 30 April 2010, the Company issued 550,000 common share
purchase warrants valued at $633,728 as stock-based compensation. Each common share purchase warrant entitles the holder to purchase
one common share at a price of $0.25 to $1.00 for a period of five years from the date of offering (Note 10).



During the year ended 30 April 2010, the Company issued 8,585,083 common share
purchase warrants valued at $469,113 for consulting services. Each common share purchase warrant entitles the holder to purchase
one common share at a price of $0.25 to $1.00 for a period of five or ten years from the date of offering (Notes 9 and 10).



During the year ended 30 April 2010, the Company rescinded the 200,000 common
shares valued at $1.25 per share for a total value of $250,000 which had been issued to acquire an undivided 25% tenancy-in-common
interest in land and buildings located in Merced, California from a Related Party (Notes 5, 9 and 10).









49









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011













During the year ended 30 April 2010, the Company entered into an Asset Purchase
Agreement with a non-related individual to acquire security and computer equipment valued at $50,000. The purchase price of the
equipment was paid for by the issuance of 50,000 shares of common stock of the Company valued at $50,000 (Notes 5 and 10).



During the year ended 30 April 2010, the Company entered into an Asset Purchase
Agreement with a non-related company to acquire a number of vehicles valued at $75,000. The purchase price of the vehicles was
paid for by the issuance of 75,000 shares of common stock of the Company valued at $75,000 (Notes 5 and 10).



During the year ended 30 April 2010, the Company entered into the Convertible
Promissory Note Agreement with Samyang for $2,000,000 cash. The principal balance bears interest at a rate of 6% per annum. All
unpaid principal, together with any unpaid and accrued interest is due and payable on the earlier of 11 February 2012 or when such
amounts are declared due and payable by the investor. During the year ended 30 April 2011, $120,000 (30 April 2010 - $25,644) in
interest was accrued and is payable to Samyang (Notes 4, 7 and 10).



During the year ended 30 April 2009, the Company issued 2,000 common shares
valued at $5.00 per share for $10,000 in convertible promissory notes (Note 10).



During the year ended 30 April 2009, the Company issued a total of 190,933 common
shares and 16,000 common share purchase warrants valued at $394,000 for consulting, investor relations services, compensation,
legal services and public relation services (Note 10).





14.Fair Value Measurements

The Company measures its available-for-sale investment at fair value. Fair value is an exit price, representing the amount that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such,
fair value is a market-based measurement that should be determined based on assumptions that market participants would use in
pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions
and for inputs used in the valuation methodologies in measuring fair value:



Level 1 – Observable inputs
that reflect quoted prices (unadjusted) for identical assets or liabilities in active

markets;

Level 2 – Include other inputs that are directly or indirectly observable in the marketplace;
or

Level 3 – Unobservable inputs which are supported by little or no market activities.

The Company classifies its available-for-sale
investment within Level 1 as the securities are valued using quoted market prices.





50









Rotoblock Corporation



(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

30 April 2011









Assets measured at fair value on a recurring basis are summarized
below:





|                                            |         |                                  | Fair
    value measurement at reporting date using
|------------------------------------------- | ------- | -------------------------------- | --------------------------------------------------
|                                            |         | Balance at 30 April
        2011 |                                                   
|                                            |         | $                                |                                                   
|                                            |         |                                  |                                                   
|Available-for-sale
    investments (Note 4) | 887,915 |                                  | 887,915                                           







|                                            |           |                          | Fair
    value measurement at reporting date using
|------------------------------------------- | --------- | ------------------------ | --------------------------------------------------
|                                            |           | Balance at 30 April 2010 |                                                   
|                                            |           | $                        |                                                   
|                                            |           |                          |                                                   
|Available-for-sale
    investments (Note 4) | 1,231,929 |                          | 1,231,929                                         





15.	Subsequent Events





The following events occurred during the period from the year ended 30 April
2011 to the date the consolidated financial statements were available to be issued on 10 August 2011:



a.On 10 May 2011, the Company announced the completion of a share exchange (the “Exchange”)
with DaifuWaste Management Holding Limited (“Daifu”), a privately held medical waste treatment company incorporated
with limited liability in the Cayman Islands, whereby the Company issued 52,922,812 common shares of the Company to the stockholders
of Daifu in exchange for all of the issued and outstanding common shares of Daifu. As a result of the Exchange, Daifu became a
wholly-owned subsidiary of the Company



b.On 14 July 2011, the Company cancelled a total of 3,334 common shares previously issued in
error. The Company is in the process of obtaining another 3,334 common shares to be returned to treasury for cancellation (Notes
10, 12 and 13).



c.On 4 August 2011, the Company cancelled a total of 1,818,181 common shares previously issued
in error (Notes 7, 10, 12 and 13).





16.Restatement of Consolidated Financial Statements



The consolidated financial statements of the Company as at 30 April 2010 and
for the year then ended have been restated to reflect the correct amount of consulting fees and salaries and wages. The restatement
has resulted in a decrease to consulting fees of $41,644, a decrease to salaries and wages of $137,859 and a decrease to accounts
payable and accrued liabilities of $179,503.









51