Rainchief Energy Inc.: Form 20-F - Filed by newsfilecorp.com

20-F 1 form20f.htm ANNUAL REPORT FOR YEAR ENDED DECEMBER 31, 2009 Rainchief Energy Inc.: Form 20-F - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

(Mark One)

[ ] Registration Statement Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934.

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

for the Fiscal Year Ended December 31, 2009.

[ ] Transition Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act 0f 1934.

For the transition period from ________ to ________.

Commission file number 000-52145

RAINCHIEF ENERGY INC.
(Exact name of Registrant as specified in its charter)

_________________________________
(Translation of Registrant's name into English)

Business Corporations Act (British Columbia)
(Jurisdiction of incorporation or organization)

Suite 2550 – 555 West Hastings Street, Vancouver, BC, Canada, V6B 4N5
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Name of each exchange on which registered

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Stock, without par value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

_________________________________
(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 27,838,852 as at December 31, 2009.

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to filed reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
[ ] Yes [X] No

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)
[X] Yes [ ] No;
and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No.

Indicate which financial statement item the registrant elects to follow:
[X] Item 17 [ ] Item 18.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

If this is an annual report, indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No

Rainchief Energy Inc.

Table of Contents

PART I
Item 1. Identity of Directors, Senior Management and Advisors	4
Item 2. Offer Statistics and Expected Timetable	4
Item 3. Key Information	5
Item 4. Information on the Company	11
Item 5. Operating and Financial Review	12
Item 6. Directors, Senior Management and Employees	15
Item 7. Major Shareholders and Related Party Transactions	17
Item 8. Financial Information	18
Item 9. The Offer and Listing	19
Item 10. Additional Information.	20
Item 11. Quantitative and Qualitative Disclosures About Market Risk	29
Item 12. Description of Securities Other Than Equity Securities	29

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies	30
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.	30
Item 15T. Controls and Procedures	30
Item 15. Controls and Procedures	30
Item 16A. Audit Committee Financial Experts	31
Item 16B. Code of Ethics	31
Item 16C. Principal Accountant Fees and Services	31
Item 16D. Exemptions from the Listing Standards for Audit Committees	31
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	31

PART III
Item 17. Financial Statements	32
Item 18. Financial Statements	32
Item 19. Exhibits	32
SIGNATURES	33

PART I

Introduction. Rainchief Energy Inc. (referred to as “Rainchief,” the “Company”), is a British Columbia corporation incorporated on December 28, 2000. The business endeavor will seek to identify for evaluation undervalued oil & gas assets worldwide for possible acquisition.

Item 1. Identity of Directors, Senior Management and Advisors.

The President of the Company is Bradley J. Moynes, Suite 2550 - 555 West Hastings Street, Vancouver, BC, Canada, V6B 4N5; and the Interim CFO of the Company is J. Robert Moynes, Unit #8-1063 West 7^th Ave. Vancouver, BC, Canada, V6H-1B2. See Item 6 for further information.

The Company’s registered independent auditors are Watson Dauphinee & Masuch, Chartered Accountants, Suite 420, 1501 West Broadway, Vancouver, British Columbia, Canada, V6J-4Z6. For further information, see Item 16C and the consolidated financial statements under Item 8.

Item 2. Offer Statistics and Expected Timetable. Not applicable.

Item 3. Key Information

A. Selected Financial Data.

The following selected information should be read in conjunction with the Company’s financial statements, and notes, filed with this Form 20-F. This information, and all other financial information in this Form 20-F, is stated in Canadian dollars unless otherwise noted.

The financial information is presented on the basis of generally accepted accounting principles in Canada. With respect to the Company’s consolidated financial statements, there are no material differences from applying these principles compared to applying United States generally accepted accounting principles. Please see note 15 of the consolidated financial statements.

Selected Consolidated Financial and Operating Data.

	Year Ended December 31,
Operating Data	2009	2008	2007	2006	2005
	$	$	$	$	$

Sales	3,838	14,767	3,965	5,105	124,847
Gross profit, net cost of sales	597	(28,584)	1,000	3,204	36,176

(Net loss)	(480,025)	(485,973)	(524,780)	(440,672)	(273,567)
(Loss) per common share – basic & diluted	(0.02)	(0.03)	(0.04)	(0.04)	(0.03)

Number of shares outstanding	27,838,852	23,818,852	17,418,852	13,577,223	10,735,447

	As at December 31,
Balance Sheet Data	2009	2008	2007	2006	2005
	$	$	$	$	$
Current Assets	13,843	34,205	79,862	104,245	46,150
Current Liabilities	282,429	315,430	451,077	269,931	194,375
Total assets	14,284	35,345	112,313	113,145	55,517

Share Capital	2,241,445	2,031,174	1,567,600	1,025,342	599,198
Accumulated Shareholder’s deficit	(2,881,762)	(2,401,737)	(1,915,764)	(1,390,984)	(950,312)
Dividends per common share	0.00	0.00	0.00	0.00	0.00

Exchange Rates.

The Company’s consolidated financial statements are stated in Canadian dollars. The Company realized gains on foreign exchange of $20,315, a loss of $30,773 for the years ended December 31, 2009, 2008 and 2007 respectively. These gains, and the loss, were due to currency exchange rate fluctuations between the Canadian and United States dollar.

In this Form 20-F/A, references to “dollars”, “$” or “Cdn$” are to Canadian dollars, unless otherwise specified. Reference to “US$” refers to United States dollars. Since June 1, 1970, the government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar.

The Bank of Canada closing exchange rate on December 31, 2009 was Cdn$0.9524 per US$1.00. For the past five fiscal years ended December 31, and for the period between January 1, 2009 and December 31, 2009, the following exchange rates were in effect for Canadian dollars exchanged for United States dollars, expressed in terms of United States dollars (based on the nominal exchange rates provided by the Bank of Canada):

Year Ended	Average per US$1
December 31, 2005	$ 1.21
December 31, 2006	$ 1.13
December 31, 2007	$ 1.07
December 31, 2008	$ 1.07
December 31, 2009	$ 1.14

Month ended	per US$1
	High	Low
January 31, 2009	$ 1.27	$ 1.18
February 28, 2009	$ 1.27	$ 1.22
March 31, 2009	$ 1.30	$ 1.22
April 30, 2009	$ 1.26	$ 1.19
May 31, 2009	$ 1.19	$ 1.10
June 30, 2009	$ 1.16	$ 1.08
July 31, 2009	$ 1.17	$ 1.08
August 31, 2009	$ 1.11	$ 1.07
September 30, 2009	$ 1.11	$ 1.06
October 31, 2009	$ 1.08	$ 1.03
November 30, 2009	$ 1.08	$ 1.05
December 31, 2009	$ 1.07	$ 1.04

B. Capitalization and Indebtedness.

The following table sets forth our capitalization as of December 31, 2009, using:

		27,838,852 shares outstanding on an actual basis; and
		26,953,908 shares outstanding on an as-adjusted basis to reflect changes through June 1, 2010.

	December 31,		As adjusted
	2009		June 1, 2010
	(audited)		(unaudited)
	$		$
Cash and cash equivalents	(10,986	)	58,373
Long-term obligations, less current portion	-		-

Shareholders’ deficiency
Share capital, without par value (December 31, 2008 $2,031,174 )	2,241,445		2,429,029
Share Subscription Advance	5,384		-
Contributed Surplus	366,788		366,788
Accumulated deficit	(2,881,762	)	(2,927,065	)
Shareholders’ deficiency	(268,145	)	(131,248	)
Total Capitalization (long-term debt plus shareholders’ deficiency)	(268,145	)	(131,248	)

On July 9, 2008, we completed a brokered private placement of 1,000,000 units at a price of US$0.15 per unit, raising gross proceeds of $153,810 (US$150,000). One unit consists of one common share and one share purchase warrant. One warrant entitles the holder to purchase one additional common share of the Company exercisable at a price of US$0.25 per share until June 15, 2009. We paid finders’ fees in the amount of $15,381 (US$15,000) and issued 100,000 share purchase warrants to the finder.

On November 14, 2008, we completed a non-brokered private placement of 200,000 units at a price of US$0.10 per unit, raising gross proceeds of $24,708 (US$20,000). One unit consists of one common share and one share purchase warrant. One warrant entitles the holder to purchase one additional common share of the Company exercisable at a price of US$0.15 per share until November 14, 2009.

On December 19, 2008 we completed a non-brokered private placement of 50,000 units at a price of US$0.10 per unit, raising gross proceeds of $6,110 (US$5,000). One unit consists of one common share and one share purchase warrant. One warrant entitles the holder to purchase one additional common share of the Company exercisable at a price of US$0.15 per share until December 1, 2009.

On June 26, 2009, we completed a non-brokered private placement of 3,050,000 units at a price of US$0.05 per unit, raising gross proceeds of $179,463 (US$152,500). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.10 per share for a period of one year. We paid finders’ fees in the amount of $3,300 and issued 200,000 share purchase warrants with a fair value of $17,538 to the finder.

On December 2, 2009, we completed a non-brokered private placement of 970,000 units at a price of US$0.05 per unit, raising gross proceeds of US$48,500. One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.10 per share for a period of one year

On March 19, 2010 we received regulatory approval for the consolidation of our stock in the ratio of 1 new share for each 10 shares held.

On March 25, 2010, certain related parties assigned debts owed by us to them totaling US$97,710 to other arm’s length parties (“Assigned Creditors”) for a nominal consideration of $10. These Assigned Creditors agreed to accept 15,000,000 post-consolidation common shares of the Company at a price of US$0.006514 per share in settlement of these debts.

You should read this information together with our consolidated financial statements, including the related notes, and Item 5, “Operating and Financial Review and Prospects.”

None of the capitalization referred to above is secured or guaranteed. All amounts in respect of capitalization including long term debt are unsecured and not guaranteed.

C. Reasons for the Offer and Use of Proceeds. Not applicable.

D. Forward Looking-Statements and Risk Factors.

Forward-looking Statements. In this document, we are showing you a picture which is part historical (events which have happened) and part predictive (events which we believe will happen). Except for the historical information, all of the information in this document comprises "forward looking" statements. Specifically, all statements (other than statements of historical fact) regarding our financial position, business strategy and plans and objectives are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to management. These statements involve known and unknown risks, including the risks resulting from economic and market conditions, accurately forecasting operating and capital expenditures and capital needs, successful anticipation of competition which may not yet be fully developed, and other business conditions. Our use of the words "anticipate", "believe", "estimate", "expect", "may", "will", "continue" and "intend", and similar words or phrases, are intended to identify forward-looking statements (also known as "cautionary statements"). These statements reflect our current views with respect to future events. They are subject to the realization in fact of assumptions, but what we now believe will occur may turn out to be inaccurate or incomplete. We cannot assure you that our expectations will prove to be correct. Actual operating results and financial performance may prove to be very different from what we now predict or anticipate. The "risk factors" below specifically address all of the factors now identifiable by us that may influence future operating results and financial performance.

Risk Factors.

Risks Related to the Business.

We have a history of operating losses and need additional capital to implement our business plan. For the year ended December 31, 2009, we recorded a net loss of $480,025 from operations compared to a net loss of $485,973 for the year ended December 31, 2008 and a net loss of $524,780 for the year ended December 31, 2007. The financial statements have been prepared using Canadian generally accepted accounting principles applicable to a going concern. However, as shown in note 1 to the consolidated financial statements, our ability to continue operations is uncertain.

We continue to incur operating losses, and have a consolidated deficit of $2,881,762 as at December 31, 2009. Operations for the year ended December 31, 2009 have been funded primarily from the issuance of share capital and the continued support of creditors. Historically, we have met working capital needs primarily by selling equity to Canadian residents, and from loans (including loans from relatives of principal shareholders).

We estimate that we will require at least $1,000,000 to begin a series of undervalued oil and gas property acquisitions. A full implementation of our business plan for these property acquisitions will be delayed until the necessary capital is raised. See Item 5, “Operating and Financial Review and Prospects.”

Our entry into the oil and gas property acquisition business may not be successful and there are risks attendant to these activities

The oil and gas property acquisition business is highly competitive, and is populated with many companies, large and small, with the capital and expertise to evaluate, purchase, and exploit producing and non-producing opportunities. Even with capital and experience, the industry risks of drilling dry holes and cost overruns are significant. Environmental compliance is an increasingly complex and costly burden to entry for many new exploration areas, and often times, and even if permits are obtained, they are sufficiently restrictive that a property cannot be explored to its full potential.

We may not be able to locate acquisition opportunities, or finance those we can. We offer no assurance that our entry into this business activity will be successful.

Risks Related to Our Stock.

If we have to raise capital by selling securities in the future, your rights and the value of your investment in the Company could be reduced. If we issue debt securities, the lenders would have a claim to our assets that would be superior to the stockholder rights. Interest on the debt would increase costs and negatively impact operating results. If we issue more common stock or any preferred stock, your percentage ownership will decrease and your stock may experience additional dilution, and the holders of preferred stock (called preference securities in Canada) may have rights, preferences and privileges which are superior to (more favorable) the rights of holders of the common stock. It is likely the Company will sell securities in the future. The terms of such future transactions presently are not determinable.

If the market for our common stock is illiquid in the future, you could encounter difficulty if you try to sell your stock. Our stock trades on the “OTC.BB” but it is not actively traded. If there is no active trading market, you may not be able to resell your shares at any price, if at all. It is possible that the trading market in the future will continue to be "thin" or "illiquid," which could result in increased price volatility. Prices may be influenced by investors' perceptions of us and general economic conditions, as well as the market for beverage companies generally. Until our financial performance indicates substantial success in executing our business plan, it is unlikely that there will be coverage by stock market analysts will be extended. Without such coverage, institutional investors are not likely to buy the stock. Until such time, if ever, as such coverage by analysts and wider market interest develops, the market may have a limited capacity to absorb significant amounts of trading. As the stock is a “penny stock,” there are additional constraints on the development of an active trading market – see the next risk factor.

The penny stock rule operates to limit the range of customers to whom broker-dealers may sell our stock in the market. In general, "penny stock" (as defined in the SEC’s rule 3a51-1 under the Securities Exchange Act of 1934) includes securities of companies which are not listed on the principal stock exchanges, or the Nasdaq National Market or the Nasdaq Capital Market, and which have a bid price in the market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years.

As "penny stock" our stock therefore is subject to the SEC’s rule 15g-9, which imposes additional sales practice requirements on broker-dealers which sell such securities to persons other than established customers and "accredited investors" (generally, individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses, or individuals who are the officers or directors of the issuer of the securities). For transactions covered by rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. This rule may adversely affect the ability of broker-dealers to sell our stock, and therefore may adversely affect our stockholders' ability to sell the stock in the public market.

Your legal recourse as a United States investor could be limited. The Company is incorporated under the laws of British Columbia. Most of the assets now are located in Canada. Our directors and officers and the audit firm are residents of Canada. As a result, if any of our shareholders were to bring a lawsuit in the United States against the officers, directors or experts in the United States, it may be difficult to effect service of legal process on those people who reside in Canada, based on civil liability under the Securities Act of 1933 or the Securities Exchange Act of 1934. In addition, we have been advised that a judgment of a United States court based solely upon civil liability under these laws would probably be enforceable in Canada, but only if the U.S. court in which the judgment were obtained had a basis for jurisdiction in the matter. We also have been advised that there is substantial doubt whether an action could be brought successfully in Canada in the first instance on the basis of liability predicated solely upon the United States' securities laws.

Item 4. Information on the Company.

A. History and Development of the Company.

The Company is a British Columbia corporation (organized on December 28, 2000, incorporation number BC 0619991, which is the incorporation number reflecting transition to the new corporate statute (the British Columbia Business Corporations Act)). The registered office is at Suite 2550 – 555 West Hastings Street, Vancouver, British Columbia, V6B-4N5. We do not have an agent in the United States.

The Company’s legal name is Rainchief Energy Inc. and business is carried on in this name in Canada at this time. On November 21, 2008 the Company changed its corporate name from Black Diamond Brands Corporation to Rainchief Energy Inc.

B. Overview.

On November 14, 2008, through our wholly-owned subsidiary, Point Grey Energy Inc., we entered into a purchase agreement to acquire a 10% working interest in certain oil and gas interests in a property located in the Province of Alberta, Canada (the “Montag Property”) for a total purchase price of $40,500, payable as follows: $30,500 non-refundable cash paid to the vendor and an additional consideration of $10,000 paid to the solicitor of the vendor in satisfaction of a debt owed by the vendor to the solicitor.

The vendor is involved in a legal action with the underlying owner and operator of the Montag Property with respect to the vendor’s entitlement to a working interest in the property. Our interest in the Montag Property was wholly derived from its purchase agreement with the vendor. On December 31, 2008, we wrote down the Montag Property to a nominal amount and recorded a writedown of $40,499 due to the uncertainty surrounding the ownership of the working interest. On December 30, 2009, we disposed of our interest in Point Grey Energy Inc. to a director for a nominal consideration See Item 7 B - Related Party Transactions.

On July 8, 2009, we acquired a 100% Working Interest in 256 hectares of petroleum and natural gas lands in the Peace River area of Alberta, Canada for a total cost of $10,501. On December 30, 2009, we disposed of our interest in this property in settlement of a promissory note issued to a shareholder.

See Item 7 B - Related Party Transactions.

The Company’s Organization Structure.

On September 30, 2009, we disposed of two subsidiaries, Black Diamond Importers Inc., a British Columbia, Canada, corporation and Liberty Valley Wines, LLC, a Delaware, U.SA., limited liability company.

On December 30, 2009, we disposed of our remaining subsidiary, Point Grey Energy Inc., an Alberta, Canada corporation.

As of the date of this report we do not have any subsidiaries.

Commitments.

In April 2008, we entered into a licensing agreement with an arm’s length party for the exclusive right to use copyrighted photographs on our privately labeled wine bottles and for advertising and promotional use for a term of 3 years.

Pursuant to the agreement, we paid a fee of US$30,000 in consideration for prior uses of the copyrighted photographs. We also agreed to pay a minimum royalty of US$22,500 per year to be applied against a royalty of US$1.00 per case of certain wine products sold by us. Pursuant to the licensing agreement, the royalty payments are secured by the personal guarantees of our President and Vice-President.

In the first quarter of 2009, we were served a Notice of Termination of the licensing agreement citing breach by us as a result of our default on the royalty payment due on January 01, 2009 for the first quarter of 2009. The total amount of claim against us is US$50,625 which represents the guaranteed royalty payments payable for the remaining term of the agreement. We are pursuing a resolution to the dispute. As at December 31, 2009, we have recorded a provision of $60,750 for this contingent liability. The outcome of the legal claim is uncertain, and management is of the opinion that the claim has no merit and seeks to recover all costs.

We own computer and office furniture and equipment with a depreciated cost of $441 as at December 31, 2009. See note 4 to the consolidated financial statements.

Item 5. Operating and Financial Review

Results of Operations

For the years ended December 31, 2009, 2008, and 2007, respectively, we had net losses of $480,025, $485,973 and $524,780.

Accounting audit and legal fees for the year ended December 31, 2009 decreased by $38,858 to $51,226 from $90,084 for the year ended December 31, 2008, as a result of adjustments to accruals for professional services made in 2008. Accounting audit and legal fees for the year ended December 31, 2008 increased by $39,976 from $50,108 for the year ended December 31, 2007 as a result of the increased compliance costs incurred during the year ended December 31, 2008.

Advertising and promotion costs for the year ended December 31, 2009 decreased by $36,744 to $1,816 from $38,560 for the year ended December 31, 2008, and by $12,614 for the year ended December 31, 2008 from $12,614 for the year ended December 31, 2007 as a result of the discontinuance of our activities in the wine and spirit business.

Consulting and investor relations expenses increased by $71,029 to $174,191 for the year ended December 31, 2009 from $103,162 for the year ended December 31, 2008, as a result of additional business development and investor relations activity during 2009. This category of expense decreased by $152,494 from $255,656 for the year ended December 31, 2006 as a result of reduced investor relations activity during the year ended December 31, 2008

Management fees charged by our President and Vice-President for the year ended December 31, 2009, reduced by US$15,000 to US$105,000 as compared with the year ended December 31, 2008 as a result of the early termination of the management contract of our Vice-President. In addition, we paid management fees in the amount of $3,100 to a company controlled by a director. Management fees for the years ended December 31, 2008 and 2007, respectively, were fixed at US$120,000. Other changes in the amounts recorded in the years ended December 31, 2009, 2008 and 2007 resulted from fluctuations in the exchange rate between the US and Canadian Dollars.

Office and telephone expenses, and Office and warehouse rent expense remained substantially unchanged for the periods ending December 31, 2009, 2008 and 2007, respectively.

Travel expenses for the year ended December 31, 2009 decreased by $10,904 to $3,027 from $13,931 during the year ended December 31, 2008, and increased by $5,092 from $8,839 for the year ended December 31, 2007. These expenses were incurred in connection with our entry into the oil and gas sector.

We incurred foreign exchange gains of $20,315 for the year ended December 31, 2009, and $31,803 for the year ended December 31, 2007, as compared to a foreign exchange loss of $30,773 for the year ended December 31, 2008. The gains in the years ending December 31, 2009 and 2007 and the loss in the year ended December 31, 2008, respectively, result from changes in the foreign currency exchange rate between the Canadian and US Dollars. We also realized a gain on settlement of debts of $21,505 for the year ended December 31, 2008 as compared with a loss on settlement of debts of $13,432 for the year ended December 31, 2007.

During the year ended December 31, 2009 we disposed of our loss-making subsidiaries realizing a gain of $222,555 and writing off $71,000 in debts owed to us by one of the subsidiaries.

During 2009 we acquired a five-year petroleum and natural gas lease in the Peace River area of Alberta, Canada for a total consideration of $10,501. We subsequently disposed of our interest in the property to an arm’s length party on December 30, 2009 for settlement of the outstanding principal and interest totaling $7,783 of a short-term promissory note and recorded a loss of $2,718 on the disposition of the lease.

During the year ended December 31, 2008, through our subsidiary Point Grey Energy Inc., we entered into a purchase agreement to acquire a 10% working interest in certain oil and gas interests in a property located in the Province of Alberta, Canada for a total purchase price of $40,500. The vendor is involved in a legal action with the underlying owner and operator of the property with respect to the vendor’s entitlement to a working interest in the property. Our interest in the property was wholly derived from the purchase agreement with the vendor, and in the event that the vendor’s interest in the property should have been determined to be nil, our interest would also have been determined to be nil. As such, we wrote off $40,499 in acquisition costs due to the uncertainty over ownership of the working interest.

Financial position

For the year ended December 31, 2009 our working capital deficiency was $268,586 as compared to a working capital deficiency of $281,225 as at December 31, 2008.

The decrease in working capital deficiency for the year ended December 31, 2009 is due to reductions in accounts receivable of $11,050 and inventory of $19,479, and increases in Amounts due to related parties of $58,220 and Bank indebtedness of $11,549. These amounts were offset by increases in GST receivable of $10,730 and reduction in Accounts payable and accrued liabilities of $102,207.

Total cash balances decreased by $11,549 from $563 as at December 31, 2008 to an overdraft of $10,986 as at December 31, 2009.

Liquidity and Capital Resources

Cash provided from private placements, related parties and the disposal of subsidiaries in the year ended December 31, 2009 was $287,638 (year ended December 31, 2008 – $315,085). Changes in working capital account provided $53921 (year ended December 31, 2008 – $105,822)

The uses of cash during the year ended December 31, 2009 were $10,501 for the purchase of the oil and gas assets (year ended December 31, 2008 – $30,500); $352,325 to fund the Company’s continuing operations (year ended December 31, 2008 – $397,158). We disposed of $283 in cash as a result of the sale of our subsidiaries.

Subsequent events

On March 19, 2010 we received regulatory approval for the consolidation of our stock in the ratio of 1 new share for each 10 shares held.

On March 25, 2010, we completed a non brokered private placement of 9,110,000 units at US$0.02 for total amount of US$182,200. Each unit comprises one common share and one non-transferable share purchase warrant. Each one warrant will entitle the holder to purchase one additional common share of the Company at an exercise price of US$0.02 for a period of five years. Concurrently with the completion of the private placement, certain of our related party creditors agreed to accept 15 million shares in the Company in settlement of amounts owing to them totaling $97,710.

On May 1, 2010, Dr. William Pfaffenberger resigned as a director of the Company.

C. Research and Development, Patents and Licenses, Etc. Not applicable.

D. Trend Information.

Management is not aware of any trend, commitment, event or uncertainty that is expected to have a material effect on our business, financial condition or results of operations.

E. Off-Balance Sheet Arrangements. Not applicable.

F. Contractual Obligations.

On January 01, 2007, we entered into management agreements with the President and the Vice President of the Company for general management and operational services for combined management fees of US$120,000 per annum. On January 01, 2008, the agreements were renewed for a term of 10 years. On September 30, 2009, the management agreement with our Vice-President was terminated by mutual agreement. On December 30, 2009 the management agreement with our President was terminated by mutual agreement. Both the President and Vice-President waived their entitlements to severance payments as provided for in their management agreements.

Item 6. Directors, Senior Management and Employees

A. Directors, Senior Management, and Employees.

The following table sets forth the name, positions held and principal occupation of each of our directors, senior management and employees upon whose work the Company is dependent. Information on such persons’ share ownership is under Item 7.

Name and Positions Held	Experience and Principal Business Activities

Bradley J. Moynes (40) President, Chief Executive Officer and Director	President and CEO, and Secretary-Treasurer of the Company since December 2000. From June 2000 until he became an Officer and Director of the Company, Mr. Moynes was an Investment Advisor with a broker-dealer firm registered in Canada.

J. Robert Moynes (65) Vice President, Interim Chief Financial Officer and Director	Director of the Company since July 2008. Mr. Moynes is currently the interim CFO.

B. Compensation.

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid to the two executive officers of the Company in each of the years ended December 31, 2009, 2008 and 2007. The table includes compensation paid for service by such persons to subsidiaries. All amounts are stated in US dollars.

	Annual Compensation				Long Term Compensation
					Awards		Payouts
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)
					Restricted
Name and Current					Stock	Options or	LPIT	All Other
Principal Position	Year	Salary	Bonus	Other	Awards	SAR’s	Payouts	Compensation
		($)	($)	($)	($)	(#)	($)	($)

Bradley J. Moynes,	2009	$60,000	$ -0-	$-0-	$ -0-	-0-	$-0-	$ -0-
President and CEO	2008	$60,000	-0-	-0-	-0-	-0-	$-0-	-0-
	2007	$60,000	-0-	-0-	-0-	-0-	-0-	-0-

J. Robert Moynes,	2009	$45,000	$ - 0-	$ -0-	$ -0-	-0-	$-0-	$ -0-
Vice-President and	2008	$60,000	-0-	-0-	-0-	-0-	-0-	-0-
interim CFO	2007	$60,000	-0-	-0-	-0-	-0-	-0-	-0-

Executive Compensation Plans and Employment Agreements.

Management Agreements.

On January 1, 2008, we signed ten-year Management Agreements with Bradley J. Moynes and J. Robert Moynes. Under the Management Agreements, we agreed to pay each officer US$60,000 annually.

On September 30, 2009, the management agreement with our Vice-President was terminated by mutual agreement. On December 30, 2009 the management agreement with our President was terminated by mutual agreement. Both the President and Vice-President waived their entitlements to severance payments as provided for in their management agreements.

Equity Compensation Plans. The Company has not established any option or other equity compensation plan for officers and employees, but may do so in the future.

C. Board Practices.

Each director holds office until the next annual general meeting of the Company unless his office is earlier vacated in accordance with the Articles of the Company or the Canada Business Corporations Act.

During the most recently completed fiscal year, there are no arrangements (standard or otherwise) under which directors of the Company were compensated by the Company or its subsidiaries for services rendered in their capacity as directors, nor were any amounts paid to the directors for committee participation or special assignments, other than the granting of stock options. There were no arrangements under which the directors would receive compensation or benefits in the event of the termination of that office.

The Company does not have audit, compensation, or corporate governance committees at the present time. The Company is listed for trading on the OTC.BB as a reporting issuer under registration statement Form 20-F (Foreign Private Issuer) and as such we believe that we are not required to have such committees.

D. Employees.

The Company currently has two officers and no employees. Employees will be added as required.

E. Share Ownership.

Our directors and officers own the indicated shares of common stock as at the date hereof; percentages are based on 26,953,908 shares outstanding on June 1, 2010.

		Percentage of
		outstanding at
Name	No. of Shares	June 1, 2010
Bradley James Moynes	651,586	2.42%
J. Robert Moynes	461,039	1.71%

Item 7. Major Shareholders and Related Party Transactions.

A. Major Shareholders

To our knowledge, no persons beneficially own, directly or indirectly, or exercise control or direction over, common shares carrying more than 5% of the voting rights attached to the 26,953,908 shares outstanding at June 1, 2010.

The Company has approximately 128 shareholders of record at June 1,2010. The number of shareholders holding securities beneficially through street name nominees, as reflected in the record position of Cede & Co. and other intermediaries, is approximately 2.42% . None of the major shareholders, if any, have different voting rights.

To the best of our knowledge, approximately 15.90% of the Company’s common shares are owned by residents of Canada. The number of shareholders holding securities beneficially through street name nominees, as reflected in the record position of Cede & Co. and other intermediaries, who may be residents of other countries, is approximately 84.10% . These assumptions are based on our shareholder registry issued by Presidents Stock Transfer Company as of June 1, 2010 that approximately 15.90% of the shares are owned by Canadian residents.

To our knowledge, we are not owned or controlled directly or indirectly by another corporation or by any foreign government, nor by any other natural or legal person, nor are there any arrangements which may result in a change of control of the Company. The directors of the Company own approximately 4.13% as a result of the March 22, 2010 share consolidation and the subsequent private placement and debt settlement issues. As a direct result of these treasury orders the percentage of shares controlled by the directors no longer represents voting control of the Company.

B. Related Party Transactions.

We had the following amounts due from (to) related parties as at December 31, 2009 and 2008:

	2009		2008
	$		$

Due (to) from Directors and Officers	(81,896	)	4,353
Due to Companies with Common Directors and Officers	(4,414	)	(37,943	)
Due to a Person Related to the Directors and Officers	(5,500	)	-

	(91,810	)	(33,590	)

Balances due from (to) related parties are unsecured, non-interest bearing and have no specific terms of repayment.

We had the following transactions with related parties for the years ended December 31, 2009, 2008 and 2007:

	2009	2008	2007
	$	$	$
Management fees charged by Officers of the Company for management, administration, supervision and company development services	125,515	129,279	129,425

Interest accrued to a person related to the Directors and Officers of the Company for cash advanced	-	-	17,990

Bad debt on amount owed by a former subsidiary	71,000	-	-

C. Interest of Experts and Counsel. None.

Item 8. Financial Information. See the consolidated financial statements under Item 18.

Item 9. The Offer and Listing.

A. Offer and Listing Details.

The Company's common shares are traded on the “OTC.BB” under the symbol RCFEF; the shares are not listed on any exchange or traded on any other medium. Trading commenced in the first quarter 2004 on the Pink Sheets and then became a reporting issuer and were listed for trading on the OTC.BB during the second quarter of 2007.

The following table sets forth the high and low closing prices on the pink sheets and the OTC.BB for the periods indicated, adjusted for the consolidation of the Company’s stock on March 22, 2010. See Item 10A below.

By Quarters in 2006, 2007, 2008 & 2009	High Sales Price US$	Low Sales Price US$
Fourth Quarter 2009	$ 1.00	$ 0.20
Third Quarter 2009	$ 1.00	$ 0.50
Second Quarter 2009	$ 1.20	$ 0.50
First Quarter 2009	$ 1.20	$ 0.30
Fourth Quarter 2008	$ 1.50	$ 0.40
Third Quarter 2008	$ 2.50	$ 0.90
Second Quarter 2008	$ 2.50	$ 1.00
First Quarter 2008	$ 2.00	$ 1.00
Fourth Quarter 2007	$ 1.40	$ 1.00
Third Quarter 2007	$ 3.50	$ 0.60
Second Quarter 2007	$ 3.80	$ 0.70
First Quarter 2007	$ 3.00	$ 2.60
Fourth Quarter 2006	$ 2.60	$ 2.00
Third Quarter 2006	$ 2.50	$ 1.60
Second Quarter 2006	$ 3.00	$ 1.40
First Quarter 2006	$ 2.20	$ 1.60
Fourth Quarter 2005	$ 3.00	$ 1.00
Third Quarter 2005	$ 3.00	$ 1.00
Second Quarter 2005	$ 3.00	$ 1.00
First Quarter 2005	$ 3.00	$ 1.00

On December 31, 2009, the closing price was US$0.30 per share.

B. Plan of Distribution. Not applicable.

C. Markets. See "Offer and Listing Details" above.

D. Selling Shareholders. Not applicable.

E. Dilution. Not applicable.

F. Expenses of the Issue. Not applicable.

Item 10. Additional Information.

A. Share Capital.

Authorized.

Unlimited number of common shares without par value

Issued and Outstanding.

	Number of
	Common	Amount
	Shares	$

Balance, December 31, 2007	17,418,852	1,567,600

Issued During the Year
For Cash – Private Placements, Net of Issuance Costs (i)	1,250,000	166,678
For Debt
Promissory Note Payable to Arm’s Length Party	150,000	17,664
Amounts Owed to Related Parties	5,000,000	279,232

Balance, December 31, 2008	23,818,852	2,031,174

For Cash - Private Placements, Net of Issuance Costs (ii)	4,020,000	210,271

Balance, December 31, 2009	27,838,852	2,241,445

	(i)	On July 9, 2008, we completed a brokered private placement of 1,000,000 units at a price of US$0.15 per unit, raising gross proceeds of $153,810 (US$150,000). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.25 per share for a period of one year. We paid finders’ fees in the amount of $15,381 (US$15,000) and issued 100,000 share purchase warrants with a fair value of $2,569 to the finder.

		On November 14, 2008, we completed a non-brokered private placement of 200,000 units at a price of US$0.10 per unit, raising gross proceeds of $24,708 (US$20,000). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.15 per share for a period of one year.

		On December 19, 2008, we completed a non-brokered private placement of 50,000 units at a price of US$0.10 per unit, raising gross proceeds of $6,110 (US$5,000). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.15 per share for a period of one year.

	(ii)	On June 26, 2009 we completed a non-brokered private placement of 3,050,000 units at a price of US$0.05 per unit, raising gross proceeds of $179,463 (US$152,500). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.10 per share for a period of one year. We incurred finders fees in the amount of $3,300

		On October 20, 2009 we completed a non-brokered private placement of 970,000 units at a price of US$0.05 per unit, raising gross proceeds of $51,747 (US$48,500). One unit consists of one common share and one share purchase warrant. Each warrant is exercisable into one common share at a price of US$0.10 per share for a period of one year.

Share Purchase Warrants

We have the following warrants outstanding which expire on various dates between March 27, 2010 and June 14, 2014:

			Weighted
			Average
			Exercise Price
	Number of		Per Share
	Warrants		US$

Balance, December 31, 2007	1,220,000		0.34

Issued During the Year
Private Placement	1,250,000		0.23
Finder’s Fees	100,000		0.25
Consulting Fees	1,300,000		0.11
Promissory Note Payable to Arm’s Length Party	150,000		0.15

Expired During the Year	(1,220,000	)	0.34

Balance, December 31, 2008	2,800,000		0.17

Issued During the Year
Private Placements	4,020,000		0.10
Consulting and Investor Relations Services	1,700,000		0.08
Management Service	1,500,000		0.08

Expired During the Year	(2,300,000	)	(0.19	)

Balance, December 31, 2009	7,720,000		0.09

As a consequence of the consolidation of the Company’s share capital on March 19, 2010, the outstanding warrants were also consolidated in the ratio of 1 new warrant for 10 warrants issued. As of June 1, 2010, the Company had 772,000 warrants outstanding at an average exercise price of US$0.90.

B. Memorandum and Articles of Association.

The Company is registered under the Canada Business Corporations Act (BC 0619991).

With respect to directors, under the by-laws, a director who is a party to a material contract or proposed material contract with us, or is a director or officer of or has a material interest in any person who is a party to a material contract or proposed material contract with us, must disclose to us in writing the nature and extent of such interest. An interested director can vote on only a limited number of such matters (securing a loan from the director to the Company, his remuneration, indemnity or insurance, or a contract with an affiliate) provided the interest is disclosed. Otherwise, even with disclosure of the interest, such a director cannot vote on a material contract or proposed material contract. A contract approved by the board of directors is not voidable because one or more directors has a conflict of interest, if the conflict is disclosed and the interested director(s) do not vote on the matter. Subject to the conflict of interest provisions summarized above, there is no restriction in the by-laws on the power of the board of directors to have the Company borrow money, issue debt obligations, or secure debt or other obligations of the Company. The by-laws contain no provision for the retirement or non-retirement of directors under an age limit requirement. A director is not required to hold any shares of the Company in order to be a director.

The Articles of the Company provide for the issuance of unlimited number of shares of common stock, without par value. All holders of common stock have equal voting rights, equal rights to dividends when and if declared, and equal rights to share in assets upon liquidation of the corporation. The common shares are not subject to any redemption or sinking fund provisions. Directors serve from year to year, there being no provision for a staggered board; cumulative voting for directors is not allowed. Between annual general meetings, the existing board can appoint one or more additional directors to serve until the next annual general meeting, but the number of additional directors shall not at any time exceed one-third of the number of directors who held office at the expiration of the last annual meeting. All issued and outstanding shares are fully paid and non-assessable securities.

In order to change the rights of the holders of common stock, the passing of a special resolution by such shareholders is required, being the affirmative vote of not less than 2/3 of the votes cast in person or by proxy at a duly called meeting of shareholders.

An annual meeting of shareholders must be called by the board of directors not later than 15 months after the last annual meeting. The board at any time may call a special meeting of shareholders. Notice of any meeting must be sent not less than 21 and not more than 50 days before the meeting, to every shareholder entitled to vote at the meeting. All shareholders entitled to vote are entitled to be present at a shareholders meeting. A quorum is the presence in person or by proxy of the holders of at least 5% of the issued and outstanding shares of common stock.

Except under the Investment Canada Act, there are no limitations specific to the rights of non-Canadians to hold or vote our shares under the laws of Canada or our charter documents. The Investment Canada Act ("ICA") requires a non-Canadian making an investment which would result in the acquisition of control of a Canadian business, the gross value of the assets of which exceed certain threshold levels or the business activity of which is related to Canada's cultural heritage or national identity, to either notify, or file an application for review with, Investment Canada, the federal agency created by the ICA. The notification procedure involves a brief statement of information about the investment on a prescribed form which is required to be filed with Investment Canada by the investor at any time up to 30 days after implementation of the investment. It is intended that investments requiring only notification will proceed without intervention by government unless the investment is in a specific type of business related to the scope of the ICA. If an investment is reviewable under the ICA, an application for review in the prescribed form normally is required to be filed with Investment Canada before the investment is made and it cannot be implemented until completion of review and Investment Canada has determined that the investment is likely to be of net benefit to Canada. If the agency is not so satisfied, the investment cannot be implemented if not made, or if made, it must be unwound.

C. Material Contracts.

Except as otherwise disclosed in this Form 20-F, we have no material contracts.

D. Exchange Controls.

There are no laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments to non-resident holders of our shares of common stock.

E. Taxation.

Canada.

Canadian Federal Income Tax Information for United States Residents.

The following is a discussion of material Canadian federal income tax considerations generally applicable to holders of our common shares who acquire such shares in this offering and who, for purposes of the Income Tax Act (Canada) and the regulations thereunder, or the Canadian Tax Act:

		deal at arm’s length and are not affiliated with us;
		hold such shares as capital property;
		do not use or hold (and will not use or hold) and are not deemed to use or hold our common shares, in or in the course of carrying on business in Canada;
		have not been at any time residents of Canada; and
		are, at all relevant times, residents of the United States, or U.S. Residents, under the Canada- United States Income Tax Convention (1980), or the Convention.

TAX MATTERS ARE VERY COMPLICATED AND THE CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES WILL DEPEND UPON THE STOCKHOLDER’S PARTICULAR SITUATION. THE SUMMARY OF MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES.

THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF THE TAX LAWS OF ANY PROVINCE OR TERRITORY WITHIN CANADA. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED TO CONSULT WITH THEIR OWN TAX ADVISERS ABOUT THE TAX CONSEQUENCES TO THEM HAVING REGARD TO THEIR OWN PARTICULAR CIRCUMSTANCES, INCLUDING ANY CONSEQUENCES OF PURCHASING, OWNING OR DISPOSING OF OUR COMMON SHARES ARISING UNDER CANADIAN FEDERAL, CANADIAN PROVINCIAL OR TERRITORIAL, U.S. FEDERAL, U.S. STATE OR LOCAL TAX LAWS OR TAX LAWS OF JURISDICTIONS OUTSIDE THE UNITED STATES OR CANADA.

This summary is based on the current provisions of the Canadian Income Tax Act, proposed amendments to the Canadian Income Tax Act publicly announced by the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”), and the provisions of the Convention as in effect on the date hereof. No assurance can be given that the Proposed Amendments will be entered into law in the manner proposed, or at all. No advance income tax ruling has been requested or obtained from the Canada Revenue Agency to confirm the tax consequences of any of the transactions described herein.

This summary is not exhaustive of all possible Canadian federal income tax consequences for U.S. Residents, and other than the Proposed Amendments, does not take into account or anticipate any changes in law, whether by legislative, administrative, governmental or judicial decision or action, nor does it take into account Canadian provincial, U.S. or foreign tax considerations which may differ significantly from those discussed herein. No assurances can be given that subsequent changes in law or administrative policy will not affect or modify the opinions expressed herein.

A U.S. Resident will not be subject to tax under the Canadian Tax Act in respect of any capital gain on a disposition of our common shares unless such shares constitute “taxable Canadian property”, as defined in the Canadian Tax Act, of the U.S. Resident and the U.S. Resident is not eligible for relief pursuant to the Convention. Our common shares will not constitute “taxable Canadian property” if, at any time during the 60-month period immediately preceding the disposition of the common shares, the U.S. Resident, persons with whom the U.S. Resident did not deal at arm’s length, or the U.S. Resident together with all such persons, did not own 25% or more of the issued shares of any class or series of shares of our capital stock. In addition, the Convention generally will exempt a U.S. Resident who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the U.S. Resident on the disposition of our common shares, from such liability provided that the value of our common shares is not derived principally from real property situated in Canada. The Convention may not be available to a U.S. Resident that is a U.S. LLC which is not subject to tax in the U.S.

Amounts in respect of our common shares paid or credited or deemed to be paid or credited as, on account or in lieu of payment of, or in satisfaction of, dividends to a U.S. Resident will generally be subject to Canadian non-resident withholding tax at the rate of 25%. Currently, under the Convention the rate of Canadian nonresident withholding tax will generally be reduced to:

		5% of the gross amount of dividends if the beneficial owner is a company that is resident in the U.S. and that owns at least 10% of our voting shares; or
		15% of the gross amount of dividends if the beneficial owner is some other resident of the U.S.

United States Federal Income Tax Information for United States Holders.

The following is a general discussion of material U.S. federal income tax consequences of the ownership and disposition of our common shares by U.S. Holders (as defined below). This discussion is based on the United States Internal Revenue Code of 1986, as amended, Treasury regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect at the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion only addresses the tax consequences for U.S. Holders that will hold their common shares as a “capital asset” and does not address U.S. federal income tax consequences that may be relevant to particular U.S. Holders in light of their individual circumstances or U.S. Holders that are subject to special treatment under certain U.S. federal income tax laws, such as:

		tax-exempt organizations and pension plans;
		persons subject to alternative minimum tax;
		banks and other financial institutions;

		insurance companies;
		partnerships and other pass-through entities (as determined for United States federal income tax purposes);
		broker-dealers;
		persons who hold their common shares as a hedge or as part of a straddle, constructive sale, conversion transaction, and other risk management transaction; and
		persons who acquired their common shares through the exercise of employee stock options or otherwise as compensation.

As used herein, the term “U.S. Holder” means a beneficial owner of our common shares that is:

		an individual citizen or resident of the United States;
		a corporation, a partnership or entity treated as a corporation or partnership for U.S. federal income tax purposes, that is created or organized in or under the laws of the United States or any political subdivision thereof;
		an estate the income of which is subject to U.S. federal income taxation regardless of its source; and
		a trust if both:
			a United States court is able to exercise primary supervision over the administration of the trust; and
			one or more United States persons have the authority to control all substantial decisions of the trust.

TAX MATTERS ARE VERY COMPLICATED AND THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES WILL DEPEND UPON THE STOCKHOLDER’S PARTICULAR SITUATION. THE SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS INTENDED TO PROVIDE ONLY A GENERAL SUMMARY AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.

NOTE THAT THIS DISCUSSION DOES NOT INCLUDE A DESCRIPTION OF THE TAX LAWS OF ANY STATE OR LOCAL GOVERNMENT WITHIN THE UNITED STATES. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF OUR COMMON SHARES ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS ABOUT THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR COMMON SHARES.

Ownership of Shares.

The gross amount of any distribution received by a U.S. Holder with respect to our common shares generally will be included in the U.S. Holder’s gross income as a dividend to the extent attributable to our current and accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent a distribution received by a U.S. Holder is not a dividend because it exceeds the U.S. Holder’s pro rata share of our current and accumulated earnings and profits, it will be treated first as a tax-free return of capital and reduce (but not below zero) the adjusted tax basis of the U.S. Holder’s shares. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s shares, the remainder will be taxed as capital gain (the taxation of capital gain is discussed under the heading “Sale of Shares” below).

For taxable years beginning before January 1, 2009, dividends received by non-corporate U.S. Holders from a qualified foreign corporation are taxed at the same preferential rates that apply to long-term capital gains. A foreign corporation is a “qualified foreign corporation” if it is eligible for the benefits of a comprehensive income tax treaty with the United States (the income tax treaty between Canada and the United States is such a treaty) or the shares with respect to which such dividend is paid is readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market). Notwithstanding satisfaction of one or both of these conditions, a foreign corporation is not a qualified foreign corporation if it is a passive foreign investment company (“PFIC”) for the taxable year of the corporation in which the dividend is paid or the preceding taxable year. (Whether a foreign corporation is a PFIC is discussed below under the heading “Passive Foreign Investment Companies”). A foreign corporation that is a PFIC for any taxable year within a U.S. person’s holding period generally is treated as a PFIC for all subsequent years in the U.S. person’s holding period. Although we have not been, are not now, and do not expect to be a PFIC, and we don’t expect to pay dividends, you should be aware of the following matters in the event that we do become a PFIC and do pay dividends.

If we were to become a PFIC, then U.S. Holders who acquire our common shares may be treated as holding shares of a PFIC throughout their holding period for the purpose of determining whether dividends received from us are dividends from a qualified foreign corporation. As a consequence, dividends received by U.S. Holders may not be eligible for taxation at the preferential rates applicable to long-term capital gains.

If a distribution is paid in Canadian dollars, the U.S. dollar value of such distribution on the date of receipt is used to determine the amount of the distribution received by a U.S. Holder. A U.S. Holder who continues to hold such Canadian dollars after the date on which they are received, may recognize gain or loss upon their disposition due to exchange rate fluctuations. Generally such gains and losses will be ordinary income or loss from U.S. sources.

U.S. Holders may deduct Canadian tax withheld from distributions they receive for the purpose of computing their U.S. federal taxable income (or alternatively a credit may be claimed against the U.S. Holder’s U.S. federal income tax liability as discussed below under the heading “Foreign Tax Credit”). Corporate U.S. Holders generally will not be allowed a dividend received deduction with respect to dividends they receive from us.

Foreign Tax Credit.

Generally, the dividend portion of a distribution received by a U.S. Holder will be treated as income in the passive income category for foreign tax credit purposes. Subject to a number of limitations, a U.S. Holder may elect to claim a credit against its U.S. federal income tax liability (in lieu of a deduction) for Canadian withholding tax deducted from its distributions. The credit may be claimed only against U.S. federal income tax attributable to a U.S. Holder’s passive income that is from foreign sources.

If we were to become a qualified foreign corporation with respect to a non-corporate U.S. Holder, dividends received by such U.S. Holder will qualify for taxation at the same preferential rates that apply to long-term capital gains. In such case, the dividend amount that would otherwise be from foreign sources is reduce by multiplying the dividend amount by a fraction, the numerator of which is the U.S. Holder’s preferential capital gains tax rate and the denominator of which is the U.S. Holder’s ordinary income tax rate. The effect is to reduce the dividend amount from foreign sources, thereby reducing the U.S. federal income tax attributable to foreign source income against which the credit may be claimed. Canadian withholding taxes that cannot be claimed as a credit in the year paid may be carried back to the preceding year and then forward 10 years and claimed as a credit in those years, subject to the same limitations referred to above.

The rules relating to the determination of the foreign tax credit are very complex. U.S. Holders and prospective U.S. Holders should consult their own tax advisors to determine whether and to what extent they would be entitled to claim a foreign tax credit.

Sale of Shares.

Subject to the discussion of the “passive foreign investment company” rules below, a U.S. Holder generally will recognize capital gain or loss upon the sale of our shares equal to the difference between: (a) the amount of cash plus the fair market value of any property received; and (b) the U.S. Holder’s adjusted tax basis in such shares. This gain or loss generally will be capital gain or loss from U.S. sources, and will be long-term capital gain or loss if the U.S. Holder held its shares for more than 12 months. Generally, the net long-term capital gain of a non-corporate U.S. Holder from the sale of shares is subject to taxation at a top marginal rate of 15%. A Capital gain that is not long-term capital gain is taxed at ordinary income rates. The deductibility of capital losses is subject to certain limitations.

Passive Foreign Investment Companies.

We will be a PFIC if, in any taxable year either: (a) 75% or more of our gross income consists of passive income; or (b) 50% or more of the value of our assets is attributable to assets that produce, or are held for the production of, passive income. Subject to certain limited exceptions, if we meet the gross income test or the asset test for a particular taxable year, our shares held by a U.S. Holder in that year will be treated as shares of a PFIC for that year and all subsequent years in the U.S. Holder’s holding period, even if we fail to meet either test in a subsequent year.

If we were a PFIC in the future, gain realized by a U.S. Holder from the sale of PFIC Shares and certain dividends received on such shares would be subject to tax under the excess distribution regime, unless the U.S. Holder made one of the elections discussed below. Under the excess distribution regime, federal income tax on a U.S. Holder’s gain from the sale of PFIC Shares would be calculated by allocating the gain ratably to each day the U.S. Holder held its shares. Gain allocated to years preceding the first year in which we were a PFIC in the U.S. Holder’s holding period, if any, and gain allocated to the year of disposition would be treated as gain arising in the year of disposition and taxed as ordinary income. Gain allocated to all other years would be taxed at the highest tax rate in effect for each of those years. Interest for the late payment of tax would be calculated and added to the tax due for each of the PFIC Years, as if the tax was due and payable with the tax return filed for that year. A distribution that exceeds 125% of the average distributions received on PFIC Shares by a U.S. Holder during the 3 preceding taxable years (or, if shorter, the portion of the U.S. Holder’s holding period before the taxable year) would be taxed in a similar manner.

A U.S. Holder may avoid taxation under the excess distribution regime by making a qualified electing fund (“QEF”) election. For each year that we would meet the PFIC gross income test or asset test, an electing U.S. Holder would be required to include in gross income, its pro rata share of our net ordinary income and net capital gains, if any. The U.S. Holder’s adjusted tax basis in our shares would be increased by the amount of such income inclusions. An actual distribution to the U.S. Holder out of such income generally would not be treated as a dividend and would decrease the U.S. Holder’s adjusted tax basis in our shares. Gain realized from the sale of our shares covered by a QEF election would be taxed as a capital gain. U.S. Holders will be eligible to make QEF elections, only if we agree to provide to the U.S. Holders, which we do, the information they will need to comply with the QEF rules. Generally, a QEF election should be made by the due date of the U.S. Holder’s tax return for the first taxable year in which the U.S. Holder held our shares that includes the close of our taxable year for which we met the PFIC gross income test or asset test. A QEF election is made on IRS Form 8621.

A U.S. Holder may also avoid taxation under the excess distribution regime by timely making a mark-to-market election. An electing U.S. Holder would include in gross income the increase in the value of its PFIC Shares during each of its taxable years and deduct from gross income the decrease in the value of its PFIC Shares during each of its taxable years. Amounts included in gross income or deducted from gross income by an electing U.S. Holder are treated as ordinary income and ordinary deductions from U.S. sources. Deductions for any year are limited to the amount by which the income inclusions of prior years exceed the income deductions of prior years. Gain from the sale of PFIC Shares covered by an election is treated as ordinary income from U.S. sources while a loss is treated as an ordinary deduction from U.S. sources only to the extent of prior income inclusions. Losses in excess of such prior income inclusions are treated as capital losses from U.S. sources. A mark-to-market election is timely if it is made by the due date of the U.S. Holder’s tax return for the first taxable year in which the U.S. Holder held our shares that includes the close of our taxable year for which we met the PFIC gross income test or asset test. A mark-to-market election is also made on IRS Form 8621.

As noted above, a PFIC is not a qualified foreign corporation and hence dividends received from a PFIC are not eligible for taxation at preferential long-term capital gain tax rates. Similarly, ordinary income included in the gross income of a U.S. Holder who has made a QEF election or a market-to-market election, and dividends received from corporations subject to such election, are not eligible for taxation at preferential long-term capital gain rates. The PFIC rules are extremely complex and could, if they apply, have significant, adverse effects on the taxation of dividends received and gains realized by a U.S. Holder. Accordingly, prospective U.S. Holders are strongly urged to consult their tax adviser concerning the potential application of these rules to their particular circumstances.

Controlled Foreign Corporation.

Special rules apply to certain U.S. Holders that own stock in a foreign corporation that is classified as a “controlled foreign corporation” (“CFC”). We do not expect to be classified as a CFC. However, future ownership changes could cause us to become a CFC. Prospective U.S. Holders are urged to consult their tax advisor concerning the potential application of the CFC rules to their particular circumstances.

Information Reporting and Backup Withholding.

United States information reporting and backup withholding requirements may apply with respect to distributions to U.S. Holders, or the payment of proceeds from the sale of shares, unless the U.S. Holder: (a) is an exempt recipient (including a corporation); (b) complies with certain requirements, including applicable certification requirements; or (c) is described in certain other categories of persons. The backup withholding tax rate is currently 28%. Any amounts withheld from a payment to a U.S. Holder under the backup withholding rules may be credited against any U.S. federal income tax liability of the U.S. Holder and may entitle the U.S. Holder to a refund.

F. Dividends and Paying Agents. Not applicable.

G. Statements by Experts. Not applicable.

H. Documents on Display. Not applicable.

I. Subsidiary Information. See the notes to the financial statements.

Item 11. Quantitative and Qualitative Disclosures About Market Risk. Not applicable.

Item 12. Description of Securities Other Than Equity Securities. Not applicable

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies. Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds. Not applicable.

Item 15T. Controls and Procedures.

Item 15. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and participation of the Chief Executive Officer, the Interim Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2009, these disclosure controls and procedures were not effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, primarily due to the Company’s minimal financial staff which prevents us from segregating duties, which management believes is a material weakness in our internal controls and procedures. We intend to address such weakness and work with outside advisors to improve our controls and procedures as and when the circumstances of the Company permit this.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting 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 assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Forward looking statements regarding the effectiveness of internal controls during 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 and procedures may deteriorate.

Management completed an assessment of the effectiveness of the Company’s internal control over financial reporting (“ICFR”) as of December 31, 2009, using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework as contemplated by Rule 13a-15(c). Based on this assessment, the Company concluded that it did not have effective internal controls over financial reporting as of December 31, 2009.

The Company’s assessment of the effectiveness of the ICFR as at December 31, 2009 identified certain material weaknesses as of that date:

1. Weakness: It is not possible to adequately segregate incompatible duties among the officers of the Company, because the Company has only two officers and one accounting consultant. Remediation: Appoint a new Chief Financial Officer, in addition to the current officers, to formally segregate the duties of maintaining accounting records and preparing financial statements, from the executive duties of the current officers. J. Robert Moynes, who has served as Chief Financial Officer from July 2009, will cease to serve in that position upon appointment of a new individual as Chief Financial Officer.

2. Weakness: The Company is small, with only two officers (who also are the only directors), thereby creating a risk of override of existing controls by management. Remediation: Require the new Chief Financial Officer’s approval of all expenditures and other dispositions of assets.

3. Weakness: The Company maintains limited audit evidence in documentary form which is used to test the operating effectiveness of control activities. Remediation: Increase the documentation of expenditures and receipts, under the joint supervision of the new Chief Financial Officer and the Chief Executive Officer, to ensure received goods and third-party services conform to contract terms.

The Company appointed a third director on June 9, 2009. This director is independent as that term is defined by Rule 4200 (a) (15) of the Marketplace Rules of NASDAQ and Canadian National Instrument 52-110, and will not be involved in the day-to-day running of the Company. However, this appointment will not result in the remediation of the weaknesses described above. The Company intends to appoint additional levels of executive management and personnel to remediate the weaknesses, in the specific manners described in paragraphs 1 through 3 above, as and when the Company has sufficient financial resources to effect the remediations.

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

Changes in Internal Control over Financial Reporting

As disclosed above, the Company completed its assessment of its ICFR in place for the year ended December 31, 2009, using the COSO framework. There were no changes in ICFR during the 2009 fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.

Item 16A. Audit Committee Financial Experts. Not applicable.

Item 16B. Code of Ethics. Not applicable.

Item 16C. Principal Accountant Fees and Services. Not applicable.

Item 16D. Exemptions from the Listing Standards for Audit Committees. Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers. None.

PART III

Item 17. Financial Statements. Not applicable.

Item 18. Financial Statements

See the consolidated financial statements of the Company, the notes thereto, and the auditors’ reports thereon, which are filed as Exhibit 99.1 with this Form 20-F. All of the financial information is presented in accordance with Canadian GAAP; however, as stated in the notes, there are no material differences between Canadian GAAP and United States GAAP as applied to our financial statements.

Item 19. Exhibits.

Exhibit No.	Description of Exhibit

3.(i)	Articles of Incorporation (Notice of Articles and Transition Application)

3.(ii)	By-laws (Schedule “A”)

4. (1)	Management Agreement of January 1, 2008 (Bradley James Moynes)

4. (2)	Management Agreement of January 1, 2008 (James Robert Moynes)

4. (3)	Form of Warrant dated May 23, 2007

12.1	Certification of Chief Executive Officer required by Rules 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.*

12.2	Certification of Interim Chief Financial Officer required by Rules 13a-14(a) and Rule 15d- 14(a) under the Securities Exchange Act of 1934, as amended.*

13.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

13.2	Certification of the Interim Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

15.1	Consent of Watson Dauphinee & Masuch, Chartered Accountants, independent registered accounting firm.*

99. (1)	Consolidated Financial Statements for the years ended December 31, 2009 and 2008.*

* Filed herewith

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report.

	Rainchief Energy Inc.

Date: June 9, 2010	/s/ Bradley J. Moynes
	Bradley J. Moynes,
	Chief Executive Officer

Date: June 9, 2010	/s/ J. Robert Moynes
	J. Robert Moynes,
	Interim Chief Financial Officer