CC Filed by Filing Services Canada Inc. 403-717-3898

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

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

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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.

74,655,023 common shares, without par value, issued and outstanding at December 31, 2005.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

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.

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):

Indicate by check mark which financial statement item the registrant has elected to follow.

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).

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Total assets for the years ended December 31, 2005, 2004 and 2003 are identical under both Canadian and US GAAP.

Loss from continuing operations per common share for the years ended December 31, 2001 - 2005 are identical under both Canadian and US GAAP.

Shareholder’s deficiency under US GAAP is greater as at December 31, 2005, 2004, 2003. 2002 and 2001 primarily for two reasons. First, due to the effect of application of APB No. 14 (Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants), which states no portion of the proceeds from the issuance of convertible securities should be accounted for as attributable to the conversion feature. Canadian GAAP requires the separate presentation of the liability and the equity component of the convertible promissory note. Second, due to the greater net loss described in the following paragraph.

Net loss for the year ended December 31, 2001 under US GAAP is greater than net loss under Canadian GAAP because under US Financial Accounting Standards Board Interpretation No.44 (“FIN #44”) increases in the trading price of the Company’s common stock over the exercise

price of the related share purchase options, which are designated as variable stock options under FIN#44 are recorded as employee compensation expense and decreases as recoveries. In addition, options held by non-employees which are repriced are treated as an issue of new options and are valued using the Black-Scholes option pricing model resulting in additional non-employee consulting expense.

The above “Selected Financial Data” is presented in Canadian dollars. On April 30, 2006, the most recent month end, the cost for one US$1.00 was CDN $1.12. On December 31, 2005, the date of the most recent financial statement, the cost for one US$1.00 was CDN$1.16. The average high and low exchange rates for the last six months between the United States dollar exchanged for Canadian dollars is as set forth below:


Month	Average	High	Low
November 2005 December 2005	1.18 1.16	1.20 1.18	1.16 1.14
January 2006	1.16	1.18	1.14
February 2006	1.15	1.16	1.14
March 2006	1.16	1.17	1.13
April 2006	1.14	1.17	1.11

The exchange rate for the last five calendar years between the United States dollar exchanged for Canadian dollars is as set forth below:

The Company has not paid any dividends during the last five years and the Company does not anticipate paying any dividends during the next fiscal year.

The business of the Company involves a number of risks and uncertainties that could cause actual results to differ materially from results projected in any forward-looking statement, or statements, made in this report. The Company’s securities are speculative and investment in the Company involves a high degree of risk. Prospective investors should consider the following:

The Company incurred a net loss of $1,815,217 for the year ended December 31, 2005 (2004:$1,759,088; 2003:$846,567). The Company has reported recurring losses since inception which have resulted in an accumulated deficit of $36,112,150 at December 31, 2005 (2004:$ 34,296,933). The Company has relied and will continue to rely on debt and/or equity financing and/or the sale of certain rights for consideration including cash. There is no certainty that additional debt and/or equity financing and/or arrangements for the sale of rights will be available on reasonable terms or at all. (Note: The financial data in this paragraph is presented in Canadian dollars.)

The ability of the Company to continue as a going concern is dependent on the receipt of additional financing and /or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet obligations as they come due. Any inability to obtain additional financing when needed and/or the loss of a material contract would have a material adverse effect on the Company, including possibly requiring the Company to significantly reduce or possibly cease its operations.

If the Company was unable to continue as a going concern, material adjustments would be required to the carrying value of assets and liabilities on the balance sheet and the balance sheet classifications used.

As with any product or service, competition from new sources may arise and existing competition may increase which may adversely affect the Company’s business plan.

The Company’s success will partially depend on its ability to obtain and enforce patents relating to the technology and to protect trade secrets. Further patents may not be available. In addition, third parties may challenge, narrow, invalidate or circumvent the Company’s patents. The patent position of medical device companies is generally highly uncertain, involves complex legal and factual questions and has recently been the subject of much litigation. Neither the U.S. Patent Office nor the courts have a consistent policy regarding breadth of claims allowed or the degree of protection afforded under many device patents.

In an effort to protect its unpatented proprietary technology, processes and know-how, the Company’s employees and consultants are required to execute confidentiality agreements. However, these agreements may not provide adequate protection against improper use or disclosure of confidential information. These agreements may be breached, and the Company may not have adequate remedies for any such breach. In addition, in some situations, these agreements may conflict, or be subject to, the rights of third parties with whom employees or consultants have previous

employment or consulting relationships. Also, others may independently develop substantial proprietary information and techniques or otherwise gain access to the Company’s trade secrets. The Company intends to market its products in many different countries. In some of those, patents may not be held nor applied for. Different countries have different patent rules and the Company may sell in countries that do not honor patents and in which the risk of product copying would be greater.

The Company’s business exposes it to potential product liability risks, which are inherent in the testing, manufacturing, marketing and sale of medical and/or cosmetic products. While the Company will take precautions it deems to be appropriate to avoid product liability suits against it, there can be no assurance that it will be able to avoid significant product liability exposure. Product liability insurance is generally expensive to the extent it is available at all. The Company has not yet obtained product liability coverage. There can be no assurance that it will be able to obtain such coverage on acceptable terms, or that any insurance policy will provide adequate protection against potential claims. A successful product liability claim brought against the Company may exceed any insurance coverage secured by the Company, and could have a material adverse effect on the Company’s results or ability to continue marketing its products.

The Company is dependent on the management of certain key personnel. At this time, no key man insurance has been obtained.

Historically, consumers held negative perceptions for hair restoration products or processes. While the Company has developed a reasonable strategy for responding to this perception, there can be no assurance that widespread acceptance of the Company’s technology can be achieved.

Many of the countries in which the Company’s products are available face adverse economic and political conditions which make business development more difficult.

Due to the relatively low price of the Company’s shares, financings have caused and may continue to cause dilution.

The Company’s common stock is listed on the OTCBB. Investors may find it more difficult to dispose of or to obtain accurate quotations as to the market value of the Company’s common stock than would be the case if it were listed on a more recognized stock exchange or quotation service. In addition, trading in the Company’s common stock is currently subject to certain rules under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a “penny stock”. Penny stocks are generally non-Nasdaq equity securities with a market price less than $5.00 per share.

The penny stock rules require broker-dealers selling penny stocks to make certain disclosures about such stocks to purchasers thereof, and impose sales practice restrictions on broker-dealers in certain penny stock transactions. The additional burdens imposed upon broker-dealers by these rules may discourage them from effecting transactions in the Company’s common stock, which could limit the liquidity of the common stock and the ability of the Company’s stockholders to sell their stock in the secondary market.

Although the Company has commenced marketing its cosmetic product CosmeticTrichoGenesis in the United States the Company requires Food and Drug Administration approval to market its medical product ElectroTrichoGenesis in the United States. There can be no guarantee as to either if, or when, such approval may be obtained.

The life cycle of the products that the Company plans to develop is difficult to predict. Failure to gain timely market acceptance of its products would have a material adverse effect on the Company’s ability to generate revenue, and would have a material adverse effect on the Company’s business, financial condition and results of operations. To successfully gain market acceptance, the Company must develop the ability to manufacture its products in sufficient quantities in compliance with regulatory requirements and at an acceptable cost. The Company has no long-term experience in manufacturing its products, and could experience difficulties in development or manufacturing that may have a material adverse effect on the Company’s ability to market its product. Moreover, there can be no assurance that the Company will be successful in scaling up manufacturing operations sufficient to produce its products in sufficient volume to generate market acceptance.

The Company has entered into agreements with distributors in various countries around the world. In most instances, these agreements are with entities which have few if any, assets. If these entities fail to perform, the Company’s only remedy may be to cancel the contract and seek a replacement distributor. Thus there are no assurances that the minimum number of units will be purchased under any agreement.

Current Technology Corporation (the ”Registrant” or the “Company”) was incorporated as 310086 B.C. Ltd. under the Company Act of British Columbia on June 3, 1986, by registration of its Memorandum and Articles with the Registrar of Companies for British Columbia. The Registrant changed its name to Current Technology Clinics Inc. April 16, 1987, to Current Technology Corporation June 8, 1987, and then to

Current Technology Corporation/La Technologie Au Courant Inc. September 1, 1987. At the June 27, 2003 Annual General Meeting, shareholders approved a special resolution to transfer the Company’s jurisdiction of incorporation from British Columbia to the Federal jurisdiction under the Canada Business Corporations Act (“CBCA”). The continuance of the Company to the CBCA was completed May 13, 2004 under the name Current Technology Corporation/ Corporation Technologie Au Courant. At the June 30, 2004 Annual and Special General Meeting, shareholders approved the adoption of By-Law No.1 which governs the general conduct and affairs of the company. The Company commenced operations on April 21, 1987. The Company is located at 1430 - 800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6. The Company’s telephone number is 604-684-2727; its fax number is 604-684-0526. The Company has an active website: www.current-technology.com .

The Company is the developer of electrotherapeutic products. Specifically they are ElectroTrichoGenesis (ETG or ETG Treatment) and CosmeticTrichoGenesis (CTG or CTG Mark 5)and collectively TrichoGenesis. The Company owns patents relating to the technology, methodology and design of its TrichoGenesis products.

The Company has developed a patented electrotherapeutic device which reduces excessive hair loss and can also stimulate hair regrowth in those who suffer from androgenetic alopecia (common baldness). ElectroTrichoGenesis, or ETG Treatment, the regrowth of hair by means of electrical stimulation, is believed to promote the “healing” of hair follicles that are dormant, but not dead. Research has been conducted to expand the indications for ETG. For example, a single center pilot trial to assess the efficacy of ETG in the reduction of hair loss in patients with breast cancer undergoing chemotherapy has been completed with encouraging results. Psycho-Oncology, a peer reviewed medical journal, published the results in the May/June 2002 edition (p. 244-248).

The CTG Mark 5 is a unit that represents a breakthrough product for improving the appearance of thinning hair. Using the TrichoGenesis technology platform, this product was developed specifically for the United States marketplace. Sales initiatives in the United States commenced at the end of the first quarter 2003. The Company continues to be engaged in ongoing research to expand the indications of its TrichoGenesis products.

Effective August 28, 1987, the Company acquired from 314613 B.C. Ltd. (a company related by way of common directors) the exclusive license and rights to certain hair regrowth products, procedures and technology for an initial term of 20 years for 2,500,000 escrowed common shares of the Company with a total deemed value of $1. The license and rights provided for continuous renewal periods of 20 years for a nominal consideration of CDN$10.00 for each 20-year renewal term. On June 30, 2000 the Company and 314613 B.C. Ltd. cancelled the 2,500,000 escrowed common shares. On the same day, the Company issued warrants to purchase 2,500,000 common shares at a price of $0.05 (all

funds USD unless noted otherwise) per share up to and including June 30, 2005. On July 5, 2004 the Directors by way of a Consent Resolution extended the expiry date to June 30, 2006 and added a cashless exercise provision. On May 8, 2006 the Directors by way of Consent Resolution extended the expiry date to June 30, 2007. The warrants were issued to the principals of 314613 B.C. Ltd., Anne Kramer (as to 1,250,000 common shares) and Robert Kramer (as to 1,250,000 common shares).

In a separate transaction, on May 31, 1999 314613 B.C. Ltd. agreed to sell to the Company the TrichoGenesis technology including all worldwide issued and pending intellectual property protection for CDN$200,000. The payment was made by the issuance of 2,500,000 common shares on July 12, 1999.

On September 11, 2000 the Company issued a convertible promissory note to Keith Denner (see Item 7. “Major Shareholders and Related Party Transactions”)a lender who owns over 20% of the issued and outstanding common shares of the Company. As at December 31, 2005, total principal amount due under the convertible promissory note amounted to $279,300, of which $125,500 is non-interest bearing and $153,800 bears interest at a fixed rate of 10% per annum. No advances were made under this note in 2005. The last principal advance was made in September, 2001. This note was to mature on August 31, 2005.

The holder of this convertible promissory note may convert all or a portion of the principal and interest outstanding into units issued by the Company, each unit consisting of one common share and one common share purchase warrant. Each warrant entitled the holder to purchase one additional common share of the Company at $0.05 up to and including March 31, 2006. Each $0.05 of principal or interest outstanding at the time of conversion may be converted into one unit. The Company was not permitted to repay the principal and interest due under the note prior to August 31, 2005. This note is secured by a general security agreement, under which the Company has granted a security interest over all of the Company’s assets, including all intellectual property.

On March 22, 2005, the Company restructured the convertible promissory note pursuant to a Forbearance Agreement. Under terms of the restructuring, the Company agreed to include accrual interest up to August 31, 2005 in the amount of $10,239 as part of the principal of the convertible promissory note. As such the total principal of $347,488 was converted at $0.05 into one unit consisting of one common share and one warrant. As a result of the conversion, Keith Denner received 6,949,766 of common shares and 6,949,766 of warrants. The 6,949,766 warrants are exercisable for shares at $0.05 and will expire on the later of January 7, 2007 or on the date which is one year and five business days after the Company repays the New Debt referred to below.

On December 31, 2003 the Company reached an agreement with Mr. Denner to restructure $644,000 indebtedness of the Company otherwise coming due to Mr. Denner on January 2, 2004. Under the agreement the outstanding non-convertible debt totalling $644,000 (the “2003 Debt”), with an interest rate of 10% per annum, was due and payable as of January 2, 2005. A total of $24,000 was advanced under the 2003 Debt in 2004. The 2003 Debt balance outstanding on December 31, 2004 was $733,471, including accrued interest. Subsequent to December 31, 2004 and prior to the restructuring, Mr. Denner advanced $76,456 for legal fees regarding the restructuring. Including interest accrual to March 22, 2005 of $16,408, the total principal restructured on March 22, 2005 was $826,335. This $826,335 promissory note (the “New Debt”) was restructured to include a conversion feature where the lender can convert each $0.25 of principal and accrued interest owing to one common share of the company at any time until maturity. The New Debt bears interest of 10% per annum and matures on January 2, 2007. The New Debt is secured by a security agreement under which the Company agreed to grant the lender security interest over all the Company's property and assets, including all intellectual property.

As additional consideration for the above debt restructuring, the Company agreed to issue 3,200,000 additional share purchase warrants exercisable for common shares at $0.25. The expiry date of these warrants is the later of January 2, 2010 and the date which is one year and five business days after the date on which principal and accrued interest owing under the New Debt are fully repaid.

The Company also agreed, as part of the above debt restructuring, to extend the expiry dates of all previously existing warrants held by the lender as follows:

the date that is one year and five business days after the date on which the New Debt and any

Mr. Denner owns 14,979,266 common shares (representing approximately 20% of the issued and outstanding shares of the Company) and warrants to purchase an additional 16,908,933 common shares. All such warrants have been amended so as to provide for a cashless exercise provision.

On December 27, 2001, the Company disposed of two 100% owned inactive subsidiaries, CTC Nevada Corp. and C.T.G.P. Corp., to a

director at fair market value of CDN$100. During the four months ended December 31, 1993 and the year ended August 31, 1993, the Company’s subsidiary, CTC Ventures Corporation, received $190,500 in subscriptions for the purchase of 378,000 special warrants. The special warrants were not issued. On December 29, 2000, the Company sold its investment in CTC Ventures Corporation for a nominal sum to a Company director. The difference between the amount paid and the net liabilities of CTC Ventures Corporation, including the prior subscription liability has been recorded as contributed surplus.

The Company has commenced the international marketing of its ETG device which is not available in the United States. The Registrant has entered into agreements with exclusive national distributors and ETG treatment centers are operating in Cyprus, New Zealand, Singapore, Thailand, Greece, Turkey, Venezuela and Mexico. In addition, ETG devices and/or treatment centers are operating in Canada, Australia, Argentina, Ireland, Poland, Chile and Kuwait. The Company developed the CTG Mark 5 specifically for the United States marketplace although CTG units are also operating in Korea and Taiwan. The agreements with TrichoGenesis operators typically provide for the payment to the Company of Technology Use Fees (TUFs), a type of royalty based on the use of the equipment, once the units are in operation. Purchasers typically pay a non-refundable deposit per unit when an order is placed, with the balance due under normal commercial terms. The purchase prices for the equipment and the TUFs are typically payable in U.S. dollars.

The Company has developed a new marketing and sales strategy, particularly as it applies to the United States and Europe. Historically, revenue has been generated primarily from a combination of the sale of units to distributors and the TUFs charged on each use. This is a conventional sales model wherein title actually transfers and revenue is recorded when the sale is consummated and/or TUF collected. Although the TUF may vary, it typically represents 5% to 10% of the ultimate retail price paid by the consumer. The new strategy involves placement of TrichoGenesis units with operators on a revenue sharing basis. Under the revenue sharing model, up to 50% of the retail price paid by the customer may be paid to the Company. Revenue sharing has the potential to significantly increase the amount of revenue the Corporation may earn from a particular unit. However, it should be noted either no sale would be recorded in such an eventuality as the unit would remain in inventory and title would not transfer (the model proposed for the UK, Europe and the Middle East) or the unit would be sold at cost (the model proposed for the United States), thus eliminating the recording of a gross profit at the time of sale. Therefore, in both instances, the revenue sharing model would result in a decrease in revenue recorded in the short run. The Company believes this shortfall would be more than offset in the long run by enhanced revenues over time, i.e. from revenue sharing. It

should be further noted, the revenue sharing model is by its nature more capital intensive than the conventional sales model. Therefore, the Company has taken steps to address this issue as described below in “New Initiatives: United States” and “New Initiatives: United Kingdom”. Lack of capital or suitable alternatives may limit the Company’s ability to rollout the revenue sharing model.

The Technology: Over the years, researchers and clinicians have discovered that certain electrical frequencies and current values stimulate healing responses in various parts of the body. For example, a research paper published in The Journal of Bone and Joint Surgery in May 1990 by J.W. Sharrard, M.D., University of Sheffield, concluded that electrical stimulation significantly influenced healing in non-union fractures. In addition, a report published in the British Journal of Dermatology in 1992 presented evidence on the healing of recalcitrant venous ulcers by means of electrical stimulation. Electrical stimulation is now an accepted medical treatment in a number of specific areas.

Historically, the Registrant has focused on developing a treatment for common baldness using electrical stimulation. It has identified the electrical parameters that reduce excessive hair loss and stimulate hair regrowth, and it has developed the treatment program. As hair loss progresses, the hair follicle produces hairs in the normal growing - resting - shedding cycle that are progressively thinner and shorter. Ultimately only "peach fuzz" type hair is produced and then the hair follicle goes into a dormant state prior to its demise. ETG Treatment is believed to alter this dormant state by stimulating the production capability of the follicle and thereby reducing excessive hair loss and encouraging regrowth.

In addition to ETG Treatment, using the TrichoGenesis platform, the Company has developed CosmeticTrichoGenesis. Developed specifically for the United States market, CTG is a breakthrough method for improving the appearance of thinning hair.

The ETG Treatment Process: During the treatment process, the patient sits in a medical device which has been designed to deliver ETG Treatment. The device does not touch the scalp, no drugs are ingested, no sensation is felt and there are no apparent side effects. Treatments last for twelve minutes and are usually administered weekly for periods determined by individual needs. Ongoing maintenance visits are recommended thereafter.

Clinical Development: Over the years ETG Treatment has been subjected to controlled clinical trials, so that safety and efficacy of the process could be verified independently. The first of these was conducted by the Division of Dermatology, Faculty of Medicine, University of British Columbia. Fifty-six men completed this 36 week trial and 96% of those who received active treatments had no further

hair loss or experienced significant hair regrowth. Some of the men continued to take treatments with measurements through 70 weeks; they experienced continued significant enhanced hair regrowth. Reports were published on these two clinical trials in a peer reviewed medical journal, the International Journal of Dermatology in the July-August 1990 and December 1992 issues.

The Registrant then commissioned further controlled clinical trials with male subjects at some eight academic centers across the United States and Canada, with a total of 205 men completing these 33 week controlled clinical trials. Those receiving active treatments reported significantly diminished hair loss as well as enhanced hair regrowth. These results have not been published. In addition, approximately 375 men over about seven years have received treatments in the Registrant's test clinic. Clinic director, Dr. Michael Koss, reported that many of these men experienced reduction of hair loss and enhanced hair regrowth. ETG Treatment is proven to be safe and users find treatments to be a comfortable experience.

A medical doctor, the distributor in New Zealand has been instrumental in conducting research to expand the indications for ETG. Dr. Timothy Meakin was co-investigator in the Auckland, New Zealand single center pilot clinical trial to assess the efficacy of the ETG device in the prevention or reduction of hair loss in patients with breast cancer undergoing chemotherapy. Dr. Meakin reported that thirteen women completed the study. Twelve of the thirteen had the same amount of hair or an increase in the amount of hair at the conclusion of their chemotherapy regimen when compared to baseline. All of the women were diagnosed with breast cancer, treated with CMF chemotherapy over approximately 24 weeks, and received concurrent ETG treatments. A report on the pilot clinical study, has been published in the May/June 2002 issue of Psycho-Oncology, a peer reviewed medical journal.

CMF is a combination of the chemotherapy agents Cyclophosphamide, Methotrexate and Fluorouracil (5FU). This combination is a chemotherapy regime prescribed in New Zealand, the United States and many other countries. Alopecia (hair loss) as a result of cancer chemotherapy is a major source of negative changes to self-concept and body image and one of the side effects to chemotherapy people fear most. Therefore, in addition to assessing hair quantity, quality of life was assessed in this clinical study. All of the women reported that ETG treatments to prevent or reduce chemotherapy induced hair loss, assisted them to maintain their sense of well being, and self-esteem.

Regulatory Approvals: In November 1993, The Registrant submitted a Pre-Market Approval application ("PMA") containing its clinical and safety data to the FDA. In July 1994, the FDA advised that on the basis of its review of the PMA, certain deficiencies existed which caused the FDA to determine its review could not

continue. The Registrant believes that it can address the majority of the deficiencies, but it could not provide the further data to support safety and efficacy for prolonged use within the response period required by the FDA. As a result the Registrant elected to voluntarily withdraw the PMA. No ETG sales or marketing can take place in the US unless and until FDA approval is obtained. The Company hopes to commence the formal FDA approval process, however, there can be no guarantee as to either if or when such approval may be obtained.

In January 1995 the Registrant was advised by Health Canada (Health Protection Branch) that it was satisfied with the notification materials submitted for the ETG device. Health Canada's acceptance of notification materials is the final regulatory procedural step required for marketing a medical device in Canada. The notification materials include Device Monograph, Directions for Use, Labels and Operator's Manual.

In addition to clearing the way for marketing in Canada, the Canadian Health Protection Branch acceptance is assisting in obtaining health regulatory approvals in other jurisdictions. Amongst others, the health regulatory authorities in Mexico, Chile, New Zealand, Singapore and Thailand have cleared the ETG device for sale as a medical device. In addition, the CE Marking of Conformity Medical Devices provides coverage in Europe and many other countries around the world with the exception of the United States.

The Canadian Standards Association (CSA) has issued two international Certificates of Compliance for Current Technology’s proprietary ETG devices. Under the first Certificate of Compliance issued September 9, 2005, the Company’s ETG devices have been certified as meeting the required Class 8750 01 and Class 8750 81 medical electrical equipment safety standards. The second Certificate of Compliance reissued October 19, 2005 relates to the standards set by the International Electrotechnical Commission’s (IEC) CB Scheme for safety of electrical equipment IEC 60601-1. This approval is recognized and accepted throughout the EEC and EFTA countries as well as a number of other jurisdictions.

During the last quarter of 2004 KEMA Quality B.V., Arnhem, The Netherlands, conducted audits and examinations in accordance with the applied conformity assessment procedures and determined that the quality systems maintained by the Registrant and its ETG Mark 1 (ElectroTrichoGenesis) electric pulse stimulator for the treatment of hair loss comply with the requirements of EC-directive 93/42/EEC and amendments thereto. Therefore, KEMA issued certificate number 2076469CE01 valid until March 1, 2008 authorizing Current Technology to affix the “CE Marking of Conformity” to its ETG Mark 1 medical device.

In addition to the CE Medical Mark audit, KEMA conducted an audit during the first quarter of 2005 of the sales, marketing, distribution and control of manufacturing of ETG Mark 1 under ISO

13485:2003. Implemented in 2004 and mandatory by March 2006, this is the highest standard issued for medical devices. The Company recently received a copy of the certificate which was issued on April 4, 2006 and is valid until February 25, 2009.

The Company’s CTG Mark 5 has also been subjected to similar examinations. As a result the following certificates have been issued:

CSA International Certificate of Compliance as a Class 3872 81 Hygiene and Cosmetic Appliance certified to US standards. Date of reissue February 7, 2006.

CSA International CB Test Certificate under IEC 60335-1. Date of reissue February 8, 2006.

Manufacturing: The Registrant has orally contracted with local suppliers to manufacture TrichoGenesis units. The primary contractor is an established manufacturer of high technology equipment. Customer’s of the primary contractor include prime aerospace companies, electronics firms and medical robotic manufacturers. In May 2006, the manufacturer, Sicom Industries Ltd., moved into a new production facility with space dedicated specifically for the manufacturing of TrichoGenesis units. The Registrant recommenced manufacturing in 2004 with an order for 30 units and placed an order for an additional 20 units in 2005. The 2005 production run employed a new gel coat manufacturing process to produce the main body of the unit. If the primary contractor is unable to meet the Company’s manufacturing needs, there are other manufacturers that could be used as the Company is able to provide a complete set of drawings. Manufacturing is typically done in batches with lead times in the range of eight to twelve weeks. Anthony J. Harrison, Current Technology's Chief Operating Officer, directs the manufacturing process.

Intellectual Property: The Registrant’s intellectual property is protected by a combination of trade secrets, issued and pending patents, design patents and/or industrial design registrations, and trademarks. In addition to 4 issued patents in the United States, there are 12 issued and 4 pending patents in 16 countries including Canada, New Zealand, the United Kingdom, Germany and Japan. The Company is most reliant upon its United States patents for future growth. Design patents and/or industrial design registrations have been granted in 20 countries including the United States and most European countries, amongst others. Trademarks protecting both the stylized CTC and ETG logos have been granted in 34 countries. Trademark and servicemark applications are underway in the United States to protect CosmeticTrichoGenesis and ElectroTrichoGenesis. Further trademark applications are underway in Japan and the European Union.

The Company holds a 100% interest in the following domain names: current-technology.com, cosmetictrichogenesis.com,

ctgtechniques.com, ctgtechnique.com, electrotrichogenesis.com, currentech.com, trichogenesis.com, etgtreatment.com, myhairchair.com, currenttechnologyco.com, currenttechnologycorp.com, and currenttechnologycorporation.com.

Marketing Program: The Company has four possible sources of revenue: the sale of ETG Mark 1 devices; the sale of CTG Mark 5 units; Technology Use Fees (royalties) calculated on the revenue or number of treatments and / or sessions generated by the ETG and / or CTG equipment; and license fees which could be generated from the sale of rights to particular geographic areas.

Historically, the Company has generated revenue from the first three sources: equipment sales and royalties. To date, no revenue has been generated from the sales of licenses. As discussed in “Business Overview”, the Company is attempting to employ a new revenue sharing marketing and sales strategy in the United States and Europe.

The Company considers the United States to be one of the most important markets in the world for its products. Accordingly, using the TrichoGenesis technology platform, the Company developed a product to suit the requirements of the multi-billion dollar U.S. beauty, spa and fitness markets. This product is named CTG Mark 5 (CosmeticTrichoGenesis)and marketed as a breakthrough method for improving the appearance of thinning hair.

Prior to 2006, the Company’s strategy was to develop the market for CTGs in the United States by appointing distributors on a geographic basis. During 2005, the Company conducted a market test and evaluation of CTG at locations in Kansas and Michigan under the direction of Strategic Laser & MedSpa, LLC (“Strategic Laser”). During the latter part of 2005, Strategic Laser approached the Company with the view of developing the market in the United States on a revenue sharing basis. On February 4, 2006 an interim sales agreement was entered into providing for the completion of a definitive agreement and placement of an initial order for 200 CTGs on or before June 30, 2006. In anticipation of the Strategic Laser agreement, the Company issued in December 2005, 1,400,000 restricted shares to cancel all legacy distribution agreements in the United States and terminated a pilot distributorship agreement.

The agreement with Strategic Laser is structured on a revenue sharing basis. The Company intends to sell CTGs to Strategic Laser at cost and will be paid up to 30% of the ultimate retail price paid by the customer. Strategic Laser has developed an introductory marketing program that should provide maximum product exposure. Simply put, all salon/spa customers will be offered free use of CTG

units for the first 90 days. Starting with an initial placement of 200 units in high traffic salons and spas, Strategic Laser has constructed a financial model projecting the placement on a revenue sharing basis of up to 5000 units over five years.

Jason Olcese, the CEO of Strategic Laser, is assembling a board of directors and advisory board in anticipation of market launch. Initial members include Frank L. Carney (co-founder of Pizza Hut and past president of the International Franchise Association), James F. Lewin (retired senior executive of Security Pacific National Bank) and Dr. Stuart Maddin (a member of Current Technology’s Medical and Scientific Advisory Board).

Failure to complete the Strategic Laser agreement will have a material negative impact on the Company.

It is important to note that while the Company is directing its primary focus on the placement of CTG Mark 5s in the U.S., Current Technology also hopes to obtain FDA approval for the medical uses of the ETG device, namely indications for androgenic alopecia and/or hair loss prevention for oncology patients and/or alopecia areata. However, there can be no guarantee as to either if or when such approval may be obtained. To date, financial constraints have precluded a formal submission to the FDA.

ETG devices are operating in 15 countries: Ireland, Cyprus, Turkey, Greece, Poland, New Zealand, Australia, Thailand, Singapore, Canada, Mexico, Venezuela, Argentina, Chile and Kuwait.

During 2005 and into 2006, the Company commenced two new initiatives in the United Kingdom and France.

The Company has appointed Anchorage Capital Partners Limited (“ACP”) of London, England Corporate Finance and Investment Advisor. In December 2005, a wholly owned UK subsidiary was formed – Current Technology (UK) Ltd. (the “Subsidiary”). ACP has obtained approval in principle from Her Majesty’s Revenue & Customs for Venture Capital Trusts (“VCT”) to invest in Current Technology on the condition the funds would in turn be advanced to the Subsidiary for expansion in the UK, Europe and the Middle East. VCT’s represent a potential source of funding from a tax-assisted pool of many hundreds of millions of Pounds Sterling. VCT investments have a unique feature that is a potential benefit to shareholders of the Company. In order to maximize tax benefits, VCTs must hold their investment for at least

The following comments relate to the Subsidiary and the Company’s UK initiative:

The Company is granting the Subsidiary the exclusive right to market and sell its proprietary TrichoGenesis platform products in the UK, Europe and the Middle East (the “Territory”).

ACP to raise up to 3.5 million Pounds Sterling on a best efforts basis. The proceeds to be used to exploit the Territory on a revenue sharing basis. That is, as described above rather than sell units, the Subsidiary intends to place the units with operators and earn up to 50% of the retail price of treatments paid by the customer. Given the best efforts basis of the financing, the Company cannot guarantee either if, or when, the financing will be completed.

Subject to investor concurrence, a portion of the proceeds may be used to fund Food and Drug Administration approval for the marketing and sale of ETG as a medical device in the United States. The Company cannot guarantee either if, or when, such approval may be obtained.

Subject to market conditions and corporate performance, the Subsidiary intends to seek a listing on the London Stock Exchange’s AIM market. (“The most successful growth market in the world”, according to AIM literature).

The Board of Directors of the Subsidiary consists of Thomas R. Byrne (ACP Marketing Director), Robert Kramer (Current Technology CEO) and Herman Kullar (Subsidiary Managing Director and CFO).

Market test and evaluation of its proprietary ETG Mark 1 commenced April 2006 under the direction of internationally recognized hair stylist Mr. Alain Divert at a premier salon located in the heart of Paris, France. Mr. Divert is President of the France and Mediterranean Region of I.C.D. (L’Association Internationale des Maitres Coiffeurs de Dames), operating under the trade name Intercoiffure Mondial. Headquartered in Paris, Intercoiffure Mondial (http://www.intercoiffure.net) has 2,300 members representing more than 8000 salons in 42 countries. Members represent the highest quality in hairdressing worldwide. Laurent Batas, Managing Director of Intercoiffure Mondial has agreed that upon successful completion of the market test and evaluation, ETG will be officially introduced to Intercoiffure members worldwide.

The following commentary relates to those markets in which recent, relevant activity has occurred.

Singapore: Gromark Consumers Enterprise Pte. Ltd. (“Gromark”) is operating three ETGs in two successful locations doing business as EHR Centres and is negotiating for a third location.

Hong Kong: Gromark has purchased two units, ordered and paid in advance for a third. Negotiations appear to be nearing completion for the opening of a joint-venture EHR Centre and further development of that potentially dynamic market.

Korea: Recent communication has confirmed a market test and evaluation have been concluded successfully, with plans to present results to a medical conference during the latter part of the second quarter of 2006. It is premature to determine what impact these events may have on sales prospects.

Taiwan: The prospective sub-distributor (“Sub-Distributor”), having purchased four CTG units, has successfully completed a market evaluation and determined that in order to achieve its objective of becoming the premier hair solutions provider in Taiwan, formal medical approval would be required. To that end, an application was submitted to the health authorities in Taiwan who have reportedly advised the Sub-Distributor the initial review process has been completed successfully and a formal determination should be made by July 2006. The Sub-Distributor remains confident of the ultimate outcome, although frustrated with the amount of time and money expended to date.

Other: Distributor agreements are in place with Gromark for Thailand (two units delivered) and Malaysia (two units ordered and paid for). In addition to its focus on developing markets already under contract, Gromark reports ongoing negotiations with respect to Indonesia, Australia, Japan and five regions of China. The Company cannot guarantee either if, or when, these negotiations will result in definitive agreements or purchase orders.

Poland: The first ETG Treatment Center opened in Warsaw, Poland in August 2005. Operating under the name “ETG Terapia”, the Center is located in Warsaw’s prime central business district in close proximity to the Ministry of Finance and the National Bank of Poland.

Turkey: In February 2006, the Company signed an exclusive distributorship agreement for the Republic of Turkey with Sanomed Medikal Teknoloji Co. (“Sanomed”). The agreement provides for the purchase of 34 ETG Mark 1 devices over the next 4 years. The principal of Sanomed, Mr. Ali Bicken, and his associate Dr. Serafettin Saracoglu, received training in Vancouver in February 2006 and two ETGs were delivered to dermatology/aesthetic clinics in Istanbul during March 2006. During May 2006, approval was received from leasing companies in Turkey for the purchase of two more ETGs which will be shipped as soon as funds are received, subject to resolution of air freight issues caused by a fire at Istanbul airport. In addition, Mr. Bicken has verbally advised he anticipates placing an order for a further two units by the end of May or early June 2006.

Mexico: The exclusive distributor for Mexico, Current Image Technology S.A. de C.V. (“CIT”), opened a second ETG Treatment Center in Mexico City in July 2005. Situated in an historical building in the upscale San Angel district of the capital city, the new location compliments the successful three device flagship ETG Center in the Polanco district.

Venezuela: Centro Laser de la Belleza (“Centro Laser”) was appointed exclusive distributor in December 2005, having agreed to purchase 18 ETGs over a period of 3 years. Centro Laser owns and/or operates 27 laser centers and is the largest provider of such services in Venezuela. The first ETG was shipped during the first quarter of 2006 and additional orders are anticipated in the near future.

Geographic Summary: TrichoGenesis platform products are presently operating in the following countries:

The Americas

Canada

United States*

Mexico

Argentina

Chile

Venezuela

Asia Pacific

Korea*

Taiwan*

Thailand

Singapore

Australia

New Zealand

Europe

Ireland

Poland

Greece

Cyprus

Turkey

Middle East

Kuwait

* Denotes CosmeticTrichoGenesis units; the balance are ElectroTrichoGenesis devices.


	2005	2004	2003
Asia Pacific Region	$302,240	$23,735	$7,337
Europe	27,702	33,075	37,381
The Americas	167,371	277,631	190,144

	$497,313	$334,441	$234,862

Marketing Strategy and Financial Potential: As discussed above, ETGs are operating in 15 countries. CTGs are operating in three countries. ETG is represented by exclusive distributors in nine of the 15 countries. In the balance of the countries (Australia, Ireland, Kuwait, Canada, Argentina and Chile) the Registrant is dealing directly with end users. CTGs are presently operating in the United States, Taiwan and Korea.

Although the Registrant’s efforts have been hampered by a lack of financial resources, the Registrant believes its TrichoGenesis technology has a place in most industrialized countries in the world and that its new marketing initiatives in the United States, United Kingdom and France may portend future progress.

Certain statements contained in this report that are not historical facts constitute forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created by that Act. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, or achievements to differ materially from those expressed or implied. All statements, other than statements of historical facts, included in this report that address activities, events, or developments that our management expects, believes, hopes or anticipates will or may occur in the future are forward looking statements. Any forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.

The formal agreements entered into by the Registrant with respect to the sale of equipment may bind the distributors to purchase the number of units provided for in the agreements, however, the realistic remedy for a distributor’s failure to perform would probably be cancellation of the agreement and thus there are no assurances that the minimum number of units will be purchased under any agreement. The markets for sale and/or distribution of equipment may be sensitive to a general downturn in the overall economy of the countries in which marketing is to take place. Adverse economic and political conditions

in these countries may have an impact on the Registrant’s profitability. New or existing competition may have a negative impact on performance in a given country or countries. Further, to the extent that the Registrant has executed letters of intent with certain other parties, there are no assurances that these letters of intent will result in formal agreements. As revenues from TUFs are a function of the number of CTGs and / or ETGs sold by the Registrant, the inability to sell this equipment will also have a negative impact on the revenues from TUFs.

The Company potentially competes with a number of products within the industry in the form of lasers, lotions, creams, pills, surgical intervention(hair transplants) and hair replacement systems (wigs and toupees). These products are produced by a range of companies from major pharmaceutical companies such as Merck Co. Inc. (Propecia™) and Pharmacia & Upjohn International (Rogaine™) to local purveyors of folk remedies.

The Company presently has one wholly owned subsidiary: Current Technology (UK) Ltd. For further particulars see “New Initiatives: United Kingdom”.

The Company leases 2,350 square feet of office space for its headquarters facilities located at 800 West Pender Street, Vancouver, British Columbia, Canada at a monthly cost of approximately CDN$5,170.00. The lease expires April 30, 2011. The Company owns no material tangible fixed assets.

Revenue increased 48% from $334,441 in 2004 to $497,313 in 2005. The increase in revenue was a result of an increase in the number of units sold and TUFs collected, not an increase in prices. Management believes the increase in number of units sold and downstream royalties may increase as market acceptance in the United States, Europe and the Asia Pacific Region grows. Expenses increased from $2,175,459 to $2,191,389. The net loss increased 3% from $1,759,088 to 1,815,217. During 2005 approximately 22% of expenses were stock-based rather than cash-based, as evidenced by the following:

The change in net loss of $56,129 during 2005 was primarily a result of the following factors: an increase in consulting of $19,400 in 2005 ($19,400 versus nil in 2004); an increase in financing cost of $35,487 in 2005 ($35,487 versus nil in 2004); an increase in interest expense of $23,785 in 2005 ($124,154 versus $100,369 in 2004); an increase in manufacturing of $149,862 ($346,194 versus $196,332); an increase in marketing of $51,001 (391,650 <of which $281,639 was stock-based > in 2005 versus $340,649 in 2004; a decrease in regulatory of $86,662 ($34,958 versus $121,620); a decrease in research report of $130,802 (nil vs a stock-based expenditure of $130,802 for research report services in 2004); a decrease in investor relations of $122,499($391,650 (126,806 <of which $36,762 was stock-based > in 2005 versus $249,305 in 2004); and a decrease in stock-based compensation from the issuance of incentive stock options of 5,974 ($114,326 versus $120,300).

In addition, with respect to “other item”, an increased foreign exchange recovery of $164,757 in 2005 versus a recovery of $81,930 in 2004 translating into a net increase in such amounts of $82,827 in 2005. Also during 2005, there was an $85,000 write-down of patents, licence and rights* and $200,898 of accretion interest expense.**

The development and introduction of CTG Mark 5, a breakthrough method for improving the appearance of thinning hair, resulted in the commencement of commercial activity in the US marketplace in 2003. The Registrant believes CTG could represent a significant portion of revenues in the future, as the market for cosmetic products and services in the United States is one of the largest in the world. Market acceptance of CTG over the next year or two, subsequent to the hoped for completion of the agreement with Strategic Laser, will dictate the product’s contribution to future revenues.

Although the Company sells equipment in countries where inflation may be a factor, there is no direct impact as all sales are made in US dollars.

Although the Canadian dollar has gained strength against the US dollar during 2003 to today as compared to 2000-2002, the Company has not purchased and/or sold derivative financial instruments. It may, however, do so in the future.

It must be noted, these exchange rate fluctuations have both positive and negative effects on the Company. While a stronger Canadian Dollar is positive in terms of debt repayment, it is negative in terms of sales as the Company receives US Dollars from the sales of its products. As the value of the Canadian Dollar has increased versus the US Dollar, the amount of Canadian Dollars recorded per US Dollars of sales has decreased. For example, US$10,000 of sales would have been recorded as CDN$15,776 on December 31, 2002, only CDN$12,965 on December 31, 2003 and only CDN$12,020 on December 31, 2004 and only CDN$11,630 on December 31, 2005.

The Company has financed its operations since inception principally through the sale of equity and debt securities. Since 2000, the Registrant has issued both convertible and non-convertible promissory notes.

As of December 31, 2005 the Company had a working capital deficiency of CDN$166,003 (at December 31, 2004 a working capital deficiency of CDN$1,287,023). At December 31, 2005 the Company had CDN$339,973(at December 31, 2004 CDN$205,530) in cash. The working capital deficiency of December 31, 2005 was substantially lower than that for 2004 as a result of the following factors: the conversion of a CDN$347,028 convertible promissory note to equity; the restructuring of a promissory note of $881,632 to a convertible promissory note due January 2007 (offset by the addition of CDN$141,135 of inventory financing in 2005); an increase in current assets of CDN$92,163; an increase in subscription liability of CDN$334,363 and a decrease in unearned revenue of CDN$205,187. The aforementioned increase in current assets of CDN$92,163 was primarily a result of an increase of

cash of CDN$134,443; a decrease in accounts receivable of CDN$112,373; an increase in prepaid expenses of CDN$22,636; and an increase in deferred financing costs of CDN$47,317. The working capital deficiency of December 31, 2004 was substantially larger than that for 2003 primarily because of the convertible promissory note and promissory note which were recorded as current liabilities as they were due in less than one year.

The Registrant continues to rely on debt and equity financings. During the year ended December 31, 2005 a total of $287,500 was collected and recorded as a subscription liability. In addition, $237,500 was received subsequent to December 31, 2005. In consideration for these advances, on April 13, 2006 the Company issued 4,252,000 shares and 4,252,000 warrants. Each warrant entitles the holder to purchase one common share at $0.25 up to and including September 21, 2010 (as to 3,052,000 units) and March 3, 2011 (as to 1,200,000 units). The Company may accelerate the expiration date of the warrants if the average closing price equals or exceeds $0.50 for 20 consecutive days. Subsequent to December 31, 2005 the Company also received $58,230 for the exercise of warrants, and $9,375 for the exercise of options.

During 2004, the company issued 1,000,000 shares upon the exercise of warrants for CDN$196,950; 2,465,750 shares for settlement of CDN$703,036 of debts; and 5,637,696 shares for cash of CDN$919,745.

The Company has operated at a loss since its inception and has an accumulated deficit of CDN$36,112,150 as of December 31, 2005 (CDN$34,296,933 as of December 31, 2004). The Company sustained annual net losses of CDN$1,815,217 as of December 31, 2005 (CDN$1,759,088 as of December 31, 2004, and CDN$846,567 in the year ended December 31, 2003).

The Company has no material commitments for capital expenditures as at December 31, 2005 and has made no such commitments during the last six months. Working capital is not sufficient for the Company’s

Promissory Note December 31, 2005: On July 25, 2005 the Corporation issued a secured promissory note in the amount of $110,000. The secured note bears interest of 24% and matures on January 27, 2006. The note is secured by a registered charge on 20 TrichoGenesis units which are being manufactured. Payments under the note may be accelerated on a pro-rata basis as the units are sold. As additional consideration, the lender purchased 200,000 units for $10,000. Each unit consists of one share and one five year warrant with an exercise price of $0.15. The note was fully repaid on January 26, 2006.

Certain manufacturing issues were encountered during the production run of 30 units ordered in 2004 and 20 units ordered in 2005 which made the exact timing of delivery difficult to forecast. It is anticipated future production runs will be more efficient, with reasonable estimates of timing of delivery more readily available. The Registrant estimates the cost per unit will be approximately $12,000. A deposit of at least 50% is required upon order placement, with the balance paid up upon completion. The Registrant has some cash flow from operations but still relies on third party financing for inventory build up. As sales increase the Registrant will require further build up of inventory which may restrict the number of new orders it can accept unless third party financing is obtained.

The Registrant does not believe it is possible to predict a sales cycle as product introduction is at an early stage in the United States, Europe and most of the Asia Pacific Region. These markets are believed to hold promise, but market acceptance cannot be assumed at this early stage. In addition, it is too early to determine whether or not the new sales initiatives in the United States, United Kingdom and France will be successful. Therefore, the Registrant is still dependant upon outside sources of financing, the timing and amounts of which cannot be accurately predicted. Acceptance of CTG in the United States as a cosmetic solution for thinning hair and ETG in Europe and the Asia Pacific Region and other parts of the world as a medical solution for hair loss, could reduce or possibly eliminate the need for the Company to seek further debt or equity financing.

Assuming the ACP financing of the Company’s UK subsidiary is successful, there will be restrictions on the transfer of funds from the Subsidiary to the Company.

All accounts comprised of amounts due from customers were collected in full during fiscal 2006.

Prepaid expenses are comprised of deposits on future goods or services not yet received (CDN$131,758), security deposits(CDN$15,120), and retainer paid to ACP for arranging the best efforts financing for UK sub (CDN$59,512).

Financing costs are capitalized and are amortized on a straight-line basis over the term of the related agreement.

Inventory is valued at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. As at this writing, all items in December 31, 2005 inventory have either been sold or were in use as demonstration equipment.

Patents, licence and rights consist of all the costs of acquiring patents, licence and rights related to Electrotrichogenesis (“ETG”) and were initially amortized over 10 years. During the second quarter of 2005 the Company conducted an impairment analysis under SFAS 144 and determined that the net present value of projected future cash flow was sufficiently uncertain to warrant the write down of the asset to zero. The write-down of CDN$85,000 was reflected in the June 30, 2005 interim financial statement.

Accounts payable include amounts for unpaid goods and services delivered up to and including the year end and accrued liabilities for estimated unbilled professional fees.

Convertible promissory note is comprised of advances of principal and accrued interest. The liability component of the convertible promissory note is calculated as the present value of the scheduled cash payments of interest and principal due under the terms of the note discounted at the

rate of interest applicable to a debt only instrument of comparable terms. The equity component which represents the value ascribed to the holder’s option to convert the principal balance into equity, is calculated as the difference between the amount issued and the liability component. Interest on the convertible promissory note, calculated as the amount required to accrete the liability component back to the amount payable on maturity, is charged to interest expense. When the Company issues warrants in connection with a debt instrument, the estimated fair market value of the warrants is credited to shareholders’ equity. The reduced liability component of the debt is accreted by a charge to interest expense.

The equity component which represents the value ascribed to the holder’s option to convert the principal balance into equity, is calculated as the difference between the amount issued and the liability component.

Contributed surplus is comprised of CDN$309,420 relating to the sale of a subsidiary; CDN $16,014 forgiveness of a promissory note; CDN $334,004 for stock based compensation; and CDN$353,625 for the warrant issued to Keith Denner as partial consideration for the New Debt.

The Company has established the following policies with respect to revenue recognition on the sale of ETG devices and CTG units.

Purchase/sale negotiations conclude with an agreement to purchase and are also secured by a deposit;

Goods are shipped when collection of the balance of the purchase price is reasonably assured. This is indicated by:

secured lease or term financing by distributors or customers which would result in immediate payment of the balance upon delivery; or

distributors or customers with exceptional credit and operating history, and an agreement in writing to specific terms of payment.

Revenue is recognized after goods are shipped. At this point collection is reasonably assured and risks and rewards of ownership have been transferred.

Revenue from royalty agreements is recognized when earned, which is generally the period in which the services to which the royalty relates are provided to third parties and collection of the balance owing is reasonably assured.

As previously noted, the Company has reported recurring losses since inception. The financial statements have been prepared on a going concern assumption. The ability of the Company to continue as a going concern is dependent on the receipt of additional financing and/or its ability to generate sufficient cash from operations to meet its obligations as they come due. If the Company was unable to continue as a going concern, material adjustments would be required to the carrying value of assets and liabilities and to the classifications used on the balance sheet.

During the last three fiscal years, tests and studies were CDN$ 104,191 (2005), CDN$108,965 (2004), and CDN$108,650 (2003).

During 2002 and early 2003 the Company developed CosmeticTrichoGenesis, a product for the US market.

The Company is attempting to expand the indications for the TrichoGenesis technology platform. To that end, Dr. Tim Meakin has presented preliminary results in Auckland, New Zealand, from a single center pilot clinical trial to assess the efficacy of the ETG device in the prevention or reduction of hair loss in patients with breast cancer undergoing chemotherapy. Dr. Meakin’s findings are discussed above (see Clinical Development).

The Company’s primary objective is revenue growth. To that end, the Company has developed the revenue sharing model as described in the “Business Overview” section. Execution of that model in the United States is a function of completion of the agreement with Strategic Laser (see “CTG Marketing”). In Europe, execution is initially dependent upon completion of the best efforts financing

under the direction of Anchorage Capital Partners (see “ETG Marketing Program”). While moving forward with these initiatives the Company continues to seek conventional distributorship opportunities and to work with existing distributors (particularly Gromark in the Asia Pacific Region), with the objective of enhancing revenue growth. Recently appointed distributors in Turkey and Venezuela and Gromark’s ongoing negotiations with various parties in the Asia Pacific Region are tangible evidence of the objective of enhancing revenues. Units ordered from the manufacturer during 2005 are substantially complete and there is sufficient inventory for short term conventional needs until the outcome of the CTG and ETG revenue sharing initiatives are known subsequent to which the Company anticipates ordering a substantial number of new units from the manufacturer.

The convertible promissory note consists of a liability portion of CDN$688,174 plus an unamortized accretion of CDN$396,455. The equity component is CDN $243,728.

Anne Kramer founded the Company along with her husband, Robert K. Kramer, in 1987. She served as Chief Executive Officer and President from 1987 until July 5, 2004. She has served as Chairman of the Board of the Company since 1987 and as Secretary since July 5, 2004. Ms. Kramer is also a member of the Executive Committee of the Board.

Robert K. Kramer, C.A., C.P.A. founded the Company along with his wife, Anne Kramer, in 1987. He served as the Chief Financial Officer, Secretary and Vice President-Finance from 1987 to July 5, 2004. He has served as Chief Executive Officer and President since July 5, 2004 and a Director since 1987. Mr. Kramer is also a member of the Executive and Audit Committees of the Board.

Peter W. Bell, B.Sc. (Pharm.), M.B.A., served as Vice President, Medical Affairs, of the Company from 1988 to June 30, 1992 before retiring. Mr. Bell continues to serve as a Director of the Company, a position he has held since 1988, and Chairman of the Audit Committee.

Anthony J. Harrison joined the Company effective January 1, 1994 as Chief Operating Officer and became a Director later that year. Mr. Harrison is also a member of the Executive Committee.

Douglas Beder, PhD became a director on December 12, 2005. Dr. Beder is Professor Emeritus, Department of Physics & Astronomy, University of British Columbia. A consultant to Current Technology since 1991, Dr. Beder has been intimately involved in the development of its patented TrichoGenesis platform and production of both ElectroTrichoGenesis and CosmeticTrichoGenesis units. He continues to be actively involved in the technology of the TrichoGenesis platform and plays an important role in the Quality Assurance program. Dr. Beder is a member of the Audit Committee.

George A. Chen, C.A. became a director on May 17, 2004. On July 5, 2004, he became Chief Financial Officer. Prior to his retirement in 1997, Mr. Chen was a Senior Audit Partner with Deloitte & Touche, Chartered Accountants.

Anne Kramer and Robert Kramer are husband and wife and Mr. Harrison is the brother of Anne Kramer. There are no other family relationships among any of the directors or executive officers of the Company.

During the year ended December 31, 2005 the Company paid or accrued salaries and benefits of CDN$318,278 to officers and directors of the Company and paid CDN$8,000 in interest for overdue salary payable. As of December 31, 2005 other accounts payable included salaries and consulting fees payable to officers, directors or companies controlled by directors of the Company, in the amount of CDN $17,608.

The Board of Directors has the discretion to grant incentive stock options to officers and directors of the Company. During the year ended December 31, 2005 options to purchase 200,000 shares at $0.32 each were granted to officers and directors.

All Directors serve one year terms and are elected by the Company’s shareholders at the annual general meeting of shareholders. This year’s Annual and Special Meeting will be held on June 30, 2006.

The Audit Committee operates under a Charter adopted on June 27, 2002. Its primary function as set forth in the Charter is to assist the board in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the stockholders and others, the systems of internal controls that management and the board of directors have established, and the company’s audit process.

The Audit Committee is comprised of Robert Kramer, Douglas Beder and Peter Bell(chairman); it approves the annual audited financial statements and reports to the other Directors.

The Executive Committee is comprised of Anne Kramer, Robert Kramer and Anthony Harrison; it has an oversight of day to day operations of the Company.

There were two full time employees other than Directors during the three years ending December 31, 2005.

Name, Country of Ordinary Residence and Position Held with the Company

Principal Occupation or Employment and, if not an Elected Director, Occupation During the Past Five Years

Date on which the Nominee became a Director of the Company

ANNE KRAMER⁽²⁾

Canada

CHAIRMAN, SECRETARY and DIRECTOR

Founding Director and Chairman of the Company; President and Chief Executive Officer to July 5, 2004; Secretary from July 5, 2004 to present.

April 16, 1987

ROBERT KRAMER⁽¹⁾⁽²⁾

Canada

PRESIDENT,CHIEF EXECUTIVE OFFICER and DIRECTOR

Founding Director; Chief Financial Officer and Vice-President of the Company to July 5, 2004; President and Chief Executive Officer from July 5, 2004. Chartered Accountant from 1973 to present and Certified Public Accountant from 2000 to present.

April 16, 1987

PETER W. BELL⁽¹⁾

Canada

DIRECTOR

Vice-President of Medical Affairs (retired June 30, 1992), Director of the Company and Chair of the Audit Committee.

November 8, 1988

ANTHONY J. HARRISON⁽²⁾

Canada

CHIEF OPERATING OFFICER and DIRECTOR

Chief Operating Officer and Director of the Company

June 30, 1994

DOUGLAS BEDER⁽¹⁾

Canada

DIRECTOR

Professor Emeritus, Department of Physics & Astronomy, University of British Columbia. Technical Consultant to industry. Director of the Company and member of the Audit Committee

December 12,2005

GEORGE A. CHEN

Canada

CHIEF FINANCIAL OFFICER

and DIRECTOR

Chartered Accountant from 1962 to present; Chief Financial Officer since July 5, 2004.

May 17, 2004

Name

Approx. No. of Voting Shares Beneficially Owned, Directly or Indirectly, or Controlled or Directed (As at May 8, 2006)

Percentage of Common Shares

ANNE KRAMER and ROBERT KRAMER

104,337 direct⁽¹⁾ 2,392,666 indirect⁽²⁾

3.34%

PETER W. BELL

47,952 direct

ANTHONY J. HARRISON

Nil

DOUGLAS BEDER

40,000 direct

GEORGE A. CHEN

50,000 direct

Of the 104,337 shares 87,152 are held by Anne Kramer and 17,185 by Robert Kramer.

Of the 2,422,369 shares indirectly held by Robert Kramer and Anne Kramer, 1,985,000 shares are owned by 314613 B.C. Ltd., 365,053 shares are owned by 335372 B.C. Ltd. and 42,613 shares are owned by Harrison Kramer Corporation. Each of these three companies are owned as to 50% each by Anne Kramer and Robert Kramer.

Name

No. of Common

Exercise

Price

Expiry Date

Peter Bell

250,000

$0.05

February 7, 2007*

Peter Bell

50,000

$0.05

December 20,2007*

Anthony Harrison

500,000

$0.05

February 7, 2007*

Anthony Harrison

50,000

$0.05

December 20,2007*

Anne Kramer

1,000,000

$0.05

February 7, 2007*

Robert Kramer

750,000

$0.05

February 7, 2007*

Robert Kramer

200,000

$0.20

October 10, 2007

Douglas Beder

200,000

$0.32

December 12,2010

George Chen

100,000

$0.23

May 17, 2010

George Chen

150,000

$0.26

July 15, 2010

3,250,000***

*On November 29, 2005 the Directors of the Company extended the expiry dates of these options by one year.

*** On May 8, 2006 the Directors added a cashless exercise provision to these optons, with the exception of those granted pursuant to the 2004 Stock Option and Stock Bonus Plan.

The Board of Directors of the Company adopted the 2004 Stock Option and Stock Bonus Plan (the “Plan”), under which a maximum of

3,000,000 shares of Common Stock have been reserved to be issued upon the exercise of options (“Options”) or the grant of stock bonuses (“Bonuses”). The Plan includes two types of Options. Options intended to qualify as incentive stock options under Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”) are referred to as “Incentive Options.” Options which are not intended to qualify as Incentive Options are referred to as “Non-Qualified Options.” Bonuses, which may also be granted under the Plan, are the outright issuance of shares of Common Stock.

The Plan is intended to provide incentives to officers, employees and other persons, including consultants, advisers and Board members, who contribute to the success of the Company by offering them the opportunity to acquire an ownership interest in it. The Board of Directors believes that this also will help to align the interests of management and employees with the interests of shareholders. The terms of the Plan concerning the Incentive Options and Non-Qualified Options are substantially the same except that only employees of the Company or its subsidiaries are eligible to receive Incentive Options. Non-Qualified Options may be granted to employees, officers and consultants of the Company.

The number of shares reserved for issuance under the Plan is a maximum aggregate so that the number of Incentive Options and/or Non-Qualified Options that may be granted reduces the number of Bonuses which may be granted, and vice versa.

The Plan was ratified by shareholders at the Annual and Special Meeting held on June 17, 2005. During the period under review, no Officers or Directors received Options or Bonuses under the Plan.

The following sets forth the ownership of Common Stock of the Company by all directors and officers as a group and by 5% or more stockholders of the Company on December 31, 2005:


Title of Class of Securities	Identity of Person or Group	Amount Owned as of May 18, 2005	Percent of Class

Common Stock	All Directors and Officers as a group (6 persons)	3,143,208⁽¹⁾	4.68%
Common Stock	Keith Denner	35,425,131⁽²⁾	40.42%

In the last three years there has been a significant change in the percentage ownership of common shares of the Company by Keith Denner due to the conversion of the convertible promissory note described on pages 10 to 11.

None of the directors, executive officers or senior officers were indebted to the Company for the period from January 1, 2005 to the date of this annual report.

See pages 10 to 11 for a description of the Forbearance Agreement with Keith Denner and the extention of the warrants issued to Anne Kramer and Robert Kramer. See pages 35 and 36 for a description of the extension of certain options held by Directors and Officers and the addition of a cashless exercise provision.

Consolidated Balance Sheets as of December 31, 2005 and 2004; Consolidated Statements of Loss and Deficit for the years ended December 31, 2005, 2004 and 2003; and Consolidated Statement of Cash Flows for the years ended December 31, 2005, 2004, and 2003.

During the year 2005, the Company received $287,500 for the private placement of 2,352,000 units. Subsequent to December 31, 2005, the Corporation received $237,500 for the private placement of 1,900,000 units. Each unit consists of one share and one warrant with an exercise price of $0.25 up to and including September 21, 2010 (as to 3,052,000 units) and March 31, 2011 (as to 1,200,000 units). The Company may accelerate the expiration date of the warrants if the average closing price equals or exceeds $0.50 for 20 consecutive days. Under such circumstances the warrants must be exercised within 21 days. The units were issued April 13, 2006. Subsequent to December

31, 2005 the Company also received $58,230 for the exercise of warrants, and $9,375 for the exercise of options.

The Registrant is authorized to issue an unlimited number of shares of Common Stock. As of December 31, 2005 74,655,023 shares of Common Stock were issued and outstanding.

Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available for dividend distribution. The Company has not paid cash dividends on its Common Stock and does not anticipate paying any dividends in the foreseeable future. The holders of Common Stock are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders. In the event of the liquidation, dissolution or winding up of the Company, holders of Common Stock are entitled to share equally and ratably in all assets, if any, remaining after payment of all liabilities. Holders of Common Stock have no preemptive rights or rights to subscribe to additional securities of the Company. The outstanding shares of Common Stock are fully paid and non-assessable. The Company's transfer agent for its Common Stock is Computershare Investor Services Inc., 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.

The Company’s common stock trades on the National Association of Securities Dealers, Over The Counter, Bulletin Board ("NASD, OTC, BB") under the symbol "CRTCF". Trading on NASD OTC BB commenced March 2, 1995.

During the last five years the annual high and low market prices for the Company’s Common Stock on the NASD OTC BB were as follows:

During the last two years the quarterly high and low sales prices for the Company’s Common Stock on the NASD OTC BB were as follows:

During the most recent six months the high and low sales prices for the Company’s Common Stock on the NASD OTC BB were as follows:

According to information provided by the Company's transfer agent, at December 31, 2005, the Company had 380 U.S. stockholders of record who held in the aggregate 48,109,117 shares or approximately 64.40% of the Common Stock outstanding at that date.

Class A Preference Shares. The Company is authorized to issue an unlimited number of Class A Preference shares without par value. As of December 31, 2005 no Class A Preference shares have been issued.

Incorporated by reference to the Company’s Form 20-F dated August 31, 1991 effective April 1992 (File No.000-19846).

At the June 27, 2003 Annual General Meeting, shareholders approved a special resolution to transfer the Company’s jurisdiction of incorporation from British Columbia to the Federal jurisdiction under the Canada Business Corporations Act (CBCA). The continuance of the Registrant to the CBCA was completed May 13, 2004.

At the June 30, 2004 Annual and Special Meeting, shareholders approved By-law No. 1 governing the affairs of the Registrant attached hereto as Exhibit 1.2.

On September 11, 2000 the Company issued a convertible promissory note to Keith Denner (see Item 7. “Major Shareholders and Related Party Transactions”)a lender who owns over 20% of the issued and outstanding common shares of the Company. As at December 31, 2004, total principal amount due under the convertible promissory note amounted to $279,300, of which $125,500 is non-interest bearing and $153,800 bears interest at a fixed rate of 10% per annum. No advances were made under this note in 2004. The last principal advance was made in September, 2001. This note was to mature on August 31, 2005.

The Company also agreed, as part of the above debt restructuring, to extend the expiry dates of all previously existing warrants held by the lender as follows:

the date that is one year and five business days after the date on which the New Debt and any interest payable thereon has been repaid in full.

There are no other material contracts to which the Company is a party in the preceding two years except for those contracts entered into in the ordinary course of business, the New Debt, the 2004 Stock Option and Stock Bonus Plan and the lease agreement for the Company’s office space, which are all described above.

There are currently no limitations imposed by Canadian federal or provincial laws on the rights of non-resident or foreign owners of Canadian securities to hold or vote the securities held. There are also no such limitations imposed by the Company’s articles and bylaws with respect to the common shares of the Company.

The following summarizes the principal Canadian federal income tax considerations applicable to the holding and disposition of a common share by a holder (the "Holder") of one or more common shares who is resident in the United States of America and holds the common share as capital property. This summary is based on the current provisions of the Income Tax Act (Canada) (the "Tax Act"), the regulations thereunder and all amendments to the Tax Act publicly proposed by the government of Canada to the date hereof. It is assumed that each such amendment will be enacted as proposed and there is no other relevant change in any governing law, although no assurance can be given in these respects.

Every Holder is liable to pay a withholding tax on every dividend that is or is deemed to be paid or credited to him on his common shares. Under the Canada-United States Income Tax Convention (1980) (the "Treaty"), the rate of withholding tax is 10% of the gross amount of the dividend where the Holder is a company that owns at least 10% of the voting stock of the Company and beneficially owns the dividend, and 15% in any other case. A Protocol amending the Treaty was ratified by the representatives of the Canadian and United States governments. Effective in December 1995 one of the amendments in the Protocol reduces the 10% withholding rate on dividends to 6% in 1996 and 5% in 1997.

Under the Tax Act, a Holder will not be subject to Canadian tax on any capital gain realized on an actual or deemed disposition of a common share, including a deemed disposition at death, provided that he did not hold the common share as capital property used in carrying on a business in Canada, and that neither he nor persons with whom he did not deal at arm’s length alone or together owned 25% or more of the issued shares of any class of the Company at any time in the five years immediately preceding the disposition.

A Holder who otherwise would be liable for Canadian tax in respect of a capital gain realized on an actual or deemed disposition of a common share will be relieved under the Treaty from such liability unless:

the common share formed part of the business property of a permanent establishment in Canada that the Holder had within the twelve-month period preceding the disposition; or

was resident in Canada for 120 months during any 20-year period preceding the disposition, and

was resident in Canada at any time during the 10 years immediately preceding the disposition, and

The Company anticipates its primary market risk, if any, will be related to fluctuations in exchange rates. Exchange rate risk may arise if the Company is required to use different currencies for various aspects of its operations. Although the principal currency used in the export market is the U.S. dollar, the local expenses of the Company (e.g., rent, telephone, payroll, etc.) are likely to be paid in Canadian Dollars. The Company intends to monitor its exchange rate risk and take necessary actions to reduce its exposure. The Company is exploring the possibility of taking action to protect itself against such risk, including the purchase and/or sale of derivative financial instruments.

Material Modifications to the Rights of Security Holders and Use of Proceeds

At June 30, 2004 Annual and Special Meeting, shareholders approved By-law No.1 governing the affairs of the Registrant. Under

the By-law, the Company is authorized to issue an unlimited number of shares of common stock and an unlimited number of Class A Preference Shares. The By-law was incorporated by reference to the Company’s Form 20F, dated December 31, 2003 and filed July 8, 2004.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this annual report, and, based on their evaluation, our principal executive officer and principal financial officer have concluded that these controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

The Audit Committee financial experts are Peter Bell, MBA (Chair), and Robert Kramer, CA, CPA. Bell is independent; Kramer is not. The NASDAQ definition of independence was used when making the determination. The Audit Committee Charter is available on the Company’s website.

On June 29, 2004 the Board of Directors approved the Code of Ethics which was incorporated by reference to the Company’s Form 20F, dated December 31, 2003 and filed July 8, 2004. The Code of Ethics is available on the Company’s website.

Our principal accountant HLB Cinnamon Jang Willoughby billed us aggregate fees of Cdn$35,382 for the year ended December 31, 2005 Cdn$16,100 for the year ended December 31, 2004 and Cdn$16,100 for the year ended December 31, 2003 for the audit of the Registrant’s annual financial statements.

For the year ended December 31, 2005 audit related fees were Nil; for the year ended December 31, 2004 audit related fees were CDN$2,137 there were no audit related fees for the year ended December 31, 2003.

Our principal accountant HLB Cinnamon Jang Willoughby billed us aggregate fees of Cdn$900 for the year ended December 31, 2005, Cdn$850 for the year ended December 31, 2004 and Cdn$850 for the year ended December 31, 2003 for tax compliance.

We do not have a local area network. We did not engage our principal accountant to design, develop or implement any such system.

The audit committee has considered the information described in “Financial Information Systems Design and Implementation Fees” above and believes that it is compatible with maintaining the principal accountant’s independence.

Our principal accountant (through its full time employees) performed all work regarding the audit of our financial statements for the most recent fiscal year.

One hundred percent of the services provided in each of the foregoing paragraphs were approved by the Audit Committee under its Pre-Approval Policy wherein the Audit Committee approves the compensation of the outside auditor.

Consolidated Balance Sheets as of December 31, 2005 and 2004, Consolidated Statements of Loss and Deficit for the years ended December 31, 2005, 2004 and 2003; and Consolidated Statement of Cash Flows for the years ended December 31, 2005, 2004, and 2003.


Exhibit Number	Description of Exhibit

1.1	Articles of Continuance (1)

1.2	By-Law No. 1 (1)

2(b).1	Forbearance Agreement dated March 22, 2005 including Convertible Grid Promissory Note, Restated Common Share Purchase Warrant, and Security Agreement (2)

2 (b).2	2004 Stock Option and Stock Bonus Plan (2)



4.3	Lease dated March 4, 2005 between Current Technology Corporation and 800 West Pender Ltd (2)
11.1	Code of Ethics (1)
12(a).1	Certifications pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
13(a).1	Certifications pursuant to 18 USC Section 1350 as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

Incorporated by reference to the Company’s Form 20-F, dated December 31, 2003 and filed July 8, 2004.

Incorporated by reference to the Company’s Form 20-F, dated December 31, 2004 and filed July 7, 2005.

The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly caused and authorized the undersign to sign this annual report on its behalf.

CURRENT TECHNOLOGY CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Auditors' Report

Consolidated Balance Sheet

Exhibit "A"

Consolidated Statement of Loss and Deficit

Exhibit "B"

Consolidated Statement of Cash Flows

Exhibit "C"

Notes to Consolidated Financial Statements

Exhibit "D"

_________________________________

We have audited the consolidated balance sheets of Current Technology Corporation as at December 31, 2005 and 2004, and the consolidated statements of loss and deficit, and cash flows for the years ended December 31, 2005, 2004 and 2003. 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 audit.

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

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the company as at December 31, 2005 and 2004, and the results of its operations and its cash flows for the years ended December 31, 2005, 2004 and 2003 in accordance to Canadian generally accepted accounting principles and United States generally accepted accounting principles.

The standards of the Public Company Accounting Oversight Board (United States of America) require the addition of an explanatory paragraph when the financial statements are affected by conditions and events that cast substantial doubt on the company's ability to continue as a going concern, such as those described in Note 1 to the consolidated financial statements. Although we conducted our audit in accordance with both Canadian generally accepted auditing standards and standards of the Public Company Accounting Oversight Board (United States of America) generally accepted auditing standards, our report to the Board of Directors dated February 14, 2006 is expressed in accordance with Canadian reporting standards which do not permit reference to such conditions and events in the auditors' report when these are adequately disclosed in the financial statements.

MetroTower II - Suite 900 - 4720 Kingsway, Burnaby, BC Canada V5H 4N2. Telephone: +1 604 435 4317. Fax: +1 604 435 4319.

HLB Cinnamon Jang Willoughby & Company is a member of International. A world-wide organization of accounting firms and business advisors.

These consolidated financial statements have been prepared on the going concern assumption that the company will be able to realize its assets and discharge its liabilities in the normal course of business.

A net loss from operations of $1,815,217 was incurred during the year (2004 - $1,759,088; 2003 - $846,567). Recurring losses have been reported since inception which have resulted in an accumulated deficit of $36,112,150 (2004 - $34,296,933). The company is currently engaged in discussions with potential investors which could result in receipt of additional financing and/or the sale of certain rights for consideration including cash. The company is also engaged in discussions with potential distributors to increase revenue in North America, Asia, Europe and the Middle East. There is no certainty that these discussions will be concluded successfully.

The ability of the company to continue as a going concern is dependent on the successful conclusion of these discussions, the receipt of additional financing, and/or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet its obligations as the come due.

If the company was unable to continue as a going concern, material adjustments may be required to the carrying value of assets and liabilities and to the classifications used on the balance sheet.

Any inability to obtain additional financing when needed would have a material adverse affect on the company including possibly requiring the company to significantly reduce or possibly cease its operations.

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada which in certain respects differs significantly from those of the United States. These differences are described in Note 17.

The consolidated financial statements include Current Technology Corporation and Current Technology (UK) Ltd., a wholly owned subsidiary, incorporated in the United Kingdom on December 15, 2005. The subsidiary was inactive as at December 31, 2005.

Cash consists of cash and funds in bank accounts integral to the company's cash management.

Inventory is valued at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis. Inventory consists of parts and partially completed product.

Financing costs are capitalized and are amortized on a straight-line basis over the term of the related debt agreement.

The following assets are recorded at cost. Amortization is provided on the following basis and at the following annual rates:

When the net carrying amount of the tangible assets exceeds the estimated net recoverable amount, the asset is written down to its estimated fair value and a charge is recorded in the statement of loss and deficit.

Patents, license and rights consist of all the costs of acquiring patents, license and rights related to ElectroTrichoGenesis ("ETG") and are amortized over ten years. Intangible assets are subject to impairment testing under SFAS 144 comparing fair value of the intangible assets with the carrying value. When carrying value of these assets exceeds the fair value, an impairment loss is recognized. Impairment is recognized in the current year. (See Note 4).

The equity component which represents the value ascribed to the holder's option to convert the principal balance into equity, is calculated as the difference between the amount issued and the liability component. Interest on the convertible promissory note, calculated as the amount required to accrete the liability component back to the amount payable on maturity, is charged to interest expense. When the company issues warrants in connection with a debt instrument, the estimated fair market value of the warrants is credited to shareholders= equity. The reduced liability component of the debt is accreted by a charge to interest expense.

Income taxes are calculated using the liability method of tax allocation. Temporary differences arising from the differences between the tax basis of assets and liabilities and their carrying amount on the balance sheet and unutilized losses carried forward are used to calculate future income tax assets or liabilities. Future income tax assets or liabilities are calculated using tax rates anticipated to apply in the year that the temporary differences are expected to reverse. The carrying value of the future income tax asset is limited to the amount that is more likely than not to be realized. A valuation allowance is provided.

The company adopted, effective January 1, 2002, the requirements of the CICA Handbook Section 3870, "Stock-based Compensation and Other Stock-based Payments." The fair value based method was adopted for all employees and non-employees. The value is recognized over the applicable vesting period as an increase to compensation expense and contributed surplus. When the options are exercised, the proceeds received by the company, together with the amount in contributed surplus, will be credited to common share capital. For options granted prior to January 1, 2002, the company continues to follow the accounting policy under which no expense is recognized for these stock options. When these options are exercised, the proceeds received by the company are recorded as common share capital.

The following policies have been established with respect to revenue recognition on the sale of ETG devices and CosmeticTrichoGenesis ("CTG") units.

Purchase/sale negotiations conclude with an agreement to purchase and are also secured by a deposit;

Goods are shipped when collection of the balance of the purchase price is reasonably assured. This is indicated by:

Revenue is recognized after goods are shipped. At this point collection is reasonably assured and risks and rewards of ownership have been transferred.

Realized and unrealized gains and losses from foreign currency translation are recognized in earnings.

Loss per share computations are based on the weighted average number of shares outstanding during the period.

The preparation of financial statements, in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management=s best knowledge of current events and actions the company may undertake in the future, actual results may differ from the estimates.

Current Technology Corporation purchased the ETG technology including all worldwide issued

and pending intellectual property protection from a related company, 314613 B.C. Ltd., for $200,000 effective July 12, 1999. The payment was made by the issuance of 2,500,000 common shares on July 12, 1999.

The company has performed an SFAS 144 impairment analysis and determined that the net present value of the projected future cash flow was sufficiently uncertain therefore an impairment loss should be recognized on patents, license and rights. The impairment loss recorded was $85,000. The net book value for these patents, license and rights is $Nil (2004 - $90,000).

On July 25, 2005, the company issued a secured promissory note in the amount of US$110,000. The secured note bears interest of 24% and matures on January 27, 2006. As at year end, the total amount outstanding including interest is $141,135 (US$121,356). The note is secured by a registered charge on 20 units which are being manufactured. Payment under the note may be accelerated on a pro-rata basis as the units are sold. The lender also purchased 200,000 units for US$10,000. Each unit consists of one share and one five year warrant with an exercise price of US$0.15. The note was fully repaid on January 26, 2006.

The promissory note is from a lender who owns over 20% of the company. On December 31, 2004, the total amount outstanding was $881,632 (US$733,471), including principal and interest calculated at 10% per annum. The promissory note was due on January 2, 2005. This note was secured by a general security agreement under which the company granted a security interest over all of the company=s assets, including all intellectual property and subordinate to the convertible promissory note in Note 6 (ii).

On March 22, 2005, the company restructured the promissory note due January 2, 2005 pursuant to a Forbearance Agreement (see Note 6).

The promissory note due January 2, 2005, as described in Note 5 (ii) above, was restructured under terms of the Forbearance Agreement to include a conversion feature where the lender can convert each US$0.25 of principal and accrued interest owing to one common share of the company at any time until maturity. The promissory note=s outstanding balance at December 31, 2004 was $881,632 (US$733,471).

Prior to the restructuring, the lender advanced the company $92,458 (US$76,456). Including interest accrual to March 22, 2005 of $19,842 (US$16,408), the total principal restructured on March 22, 2005 was $999,287 (US$826,335). This new convertible note bears interest of 10% and matures on January 2, 2007. At year end, the liability portion of this note is $688,174, calculated as follows:

The equity component is $243,728. The promissory note is secured by a security agreement under which the company agreed to grant the lender security interest over all the company's property and assets, including all intellectual property.

As additional consideration for the above debt restructuring, the company agreed to issue 3,200,000 additional share purchase warrants exercisable for common shares at US$0.25. The expiry date of these warrants is the later of January 2, 2010 and the date which is one year and five business days after the date on which principal and accrued interest owing are fully repaid.

The company also agreed, as part of the above debt restructuring, to extend the expiry dates of all existing warrants held by the lender as follows:

The liability portion of the convertible promissory note was $347,028 and the equity component was $135,445.

On March 22, 2005 the company also restructured the convertible promissory note. Under terms of the Forbearance Agreement, the company agreed to include accrual interest up to August 31, 2005 in the amount of $12,382 (US$10,239) as part of the principal of the convertible promissory note. As such the total principal of US$347,488 was converted at US$0.05 into one unit consisting of one common share and one warrant. As a result of the conversion, the lender received 6,949,766 of common shares and 6,949,766 of warrants. The 6,949,766 warrants are exercisable for shares at US$0.05 per share and will expire on the later of January 7, 2007 or on the date which is one year and five business days after the company repays the new convertible promissory note referred to above.

Subscription liability consists of funds received during the year by the company amounting to $334,363 (US$287,500) for the private placement of 2,300,000 units. Each unit consists of one share and one five year warrant with an exercise price of US$0.25. The units have not been issued.

During the four months ended December 31, 1993 and the year ended August 31, 1993, the subsidiary, CTC Ventures Corporation, received $319,267 (US$190,500) in subscriptions for the purchase of 378,000 special warrants. The special warrants were not issued. On December 29, 2000, the company sold its investment in CTC Ventures Corporation for a nominal sum to a company director. The difference between the amount paid and the net liabilities of CTC Ventures Corporation, including the prior subscription liability has been recorded as contributed surplus.

The company accounts for its stock-based compensation under the fair value based method using the Black-Scholes Option Pricing Model. $114,326 (2004 - $120,300) of compensation expense relating to stock options that has vested during the year, has been charged to the contributed surplus account. Options granted during the year were valued using the following assumptions:

The company accounted for the 3,200,000 share purchase warrants referred to in Note 6 (i) above using fair value of the equity instrument issued as computed by the Black-Scholes Option Pricing Model. These share purchase warrants were valued using the same assumptions as stock option. The total fair value of the share purchase warrants on March 22, 2005 amounted to $353,625.

From time to time, the company grants incentive stock options to directors, officers, employees and promoters of the company. In addition, on September 2, 2004, the company adopted the 2004 Stock Option and Stock Bonus Plan.

The following table summarizes information about stock options to purchase common shares outstanding and exercisable at December 31:

The following table summarizes information about stock options outstanding and exercisable at December 31:

the date that is one year and five business days after the date on which the new convertible promissory note (see Note 6 (i)) is paid in full.

The following table summarizes information about warrants to purchase common shares outstanding and exercisable at December 31:

Unless otherwise noted cash, accounts receivable, accounts payable and accrued liabilities, promissory notes and convertible promissory note are stated at amounts that approximate fair value.

The company has accounts receivable, accounts payable and accrued liabilities, promissory notes, convertible promissory note and share capital denominated in US dollars. The carrying value of these balances may change due to the volatility of foreign exchange rates. The company does not enter into hedging transactions.

The major operations relate to the sales of ETGs and CTGs worldwide as well as royalties charged on using the machines.

The difference in income taxes is due to differences between the Canadian statutory federal income tax rate and the effective income tax rate applied to the loss before income taxes is due principally to the fact that the benefit of the tax loss in each year was not recognized in the period it arose.

The approximate tax effects of each type of temporary difference that gives rise to future tax assets are as follows:

Accumulated non-capital losses for income tax purposes of approximately $6,392,683 are available to reduce future years' taxable income. The potential benefit of these losses has been offset by a valuation loss provision as it is more likely than not that these benefits will not be realized. The losses will expire at the end of the following fiscal years:

Accumulated net capital losses of $6,300,712 for income tax purpose are available to be utilized to reduce future years' taxable capital gains. These losses carry forward indefinitely. The potential benefit of these losses has been offset by a valuation loss provision in these financial statements as it is more likely than not that these benefits will not be realized.

An agreement has been entered into to lease a new premise from May 1, 2005 to April 30, 2011. The future minimum lease payments for this commitment are as follows:

Lease agreements were entered into with respect to automotive equipment, which have been financed by a long-term liability. The liability recorded under the capital leases represents the minimum monthly lease payments net of imputed interest per annum. The monthly lease payments are $601 and $785.

On February 4, 2006, an interim sales agreement was entered into with Strategic Laser & Med Spa, LLC for the commercial exploitation of its proprietary TrichoGenesis platform products in the United States of America. The interim agreement provides for the completion of a definitive agreement and placement of an initial order on or before June 30, 2006 after which the interim agreement shall terminate.

The company received US$50,000 for the private placement of 400,000 units. Each unit consists of one common share and one five year warrant with an exercise price of US$0.25. The units have not been issued.

The amount of US$9,375 was received from the exercise of options for which shares were issued. The company also received US$13,230 from the exercise of warrants for which no shares have been issued.

These financial statements are expressed in Canadian dollars and are prepared in accordance with Canadian GAAP which conform, in all material respects with U.S. GAAP except as described below:

The application of U.S. GAAP would have the following effects on the net income as reported:

Effective January 1, 2002, the company began to account for all its employee stock options with the fair value method "FAS 123". Under this method, compensation cost is measured at the grant date based on fair value of the options granted. FAS 123 requires that the option be valued using the Black-Scholes Option Price Model.

The company accounts for its non-employees stock options with the fair value method "FAS 123". Under this method, compensation cost is measured at the grant date based on fair value of the options granted. FAS 123 requires that the option be valued using the Black-Scholes Option Price Model with the following weighted average assumptions:

On February 1997 SFAS No. 128 "Earnings per Share" was issued. SFAS No. 128 redefines earnings per share under U.S. GAAP and replaces primary earnings per share with diluted earnings per share. The net loss per share, as reported, is different from basic loss per share as prescribed by SFAS No. 128 as follows:

In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, which was effective for fiscal years beginning after December 15, 1997. The company has determined that it had no comprehensive income other than the net loss in any of the years presented.

In 1999, Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, was issued. The SAB provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. Although SAB No. 101 does not change any of the accounting profession's existing rules on revenue recognition, it draws upon existing rules and explains how the SEC staff applies those rules, by analogy, to other transactions that existing rules do not specifically address. SAB No. 101, as amended by SAB No. 101B, becomes effective for the fourth fiscal quarter of fiscal years beginning after December 15, 1999. The company has determined that SAB No. 101 does not have a material effect on it financial statements.

The application of U.S. GAAP would have the following effects on the balance sheet items as reported under Canadian GAAP:

Under U.S. GAAP, in accordance with APB Opinion No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, no portion of the proceeds from the issuance of convertible debt securities should be accounted for as attributable to the conversion feature. Canadian GAAP requires the separate presentation of the liability and the equity component of the convertible promissory note. (See Note 5).

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which established accounting and reporting standards for derivative instruments and hedging activities. It requires an entity to measure all derivatives at fair value and to recognize them in the balance sheet as an asset or liability, depending on the entity's rights or obligations under the applicable derivative contact.

In June 1999, the FASB issued SFAS N0. 138, Accounting for Derivative Instruments and Hedging Activities, which amends the accounting and reporting standards of SFAS No. 133 for certain derivative instruments and certain hedging activities. The company's adoption of this statement, for U.S. GAAP purposes, which requires the accounting recognition of derivatives at fair value, did not have a significant effect on the financial position or results of operations.

Management's Discussion and Analysis ("MD&A") reviews the operating results, financial position, liquidity, risks and industry trends affecting the financial results of Current Technology Corporation (the "Corporation"). The MD&A should be read in conjunction with audited financial statements for the year ended December 31, 2005 and notes thereto and news releases issued by the Corporation during the period January 1, 2005 to the date of this report. The MD&A is prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations and Form 51-102F1 - Management's Discussion and Analysis. Amounts are expressed in Canadian dollars unless otherwise specified.

The MD&A contains forward-looking statements concerning the Corporation's business operations, and financial performance and condition. When used in the MD&A the words "believe", "anticipate", "intend", "estimate", "expect", "project", and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements are based on current expectations and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to technological change, regulatory change, the general health of the economy and competitive factors. Many of these factors are beyond the Corporation's control; therefore, future events may vary substantially from what the Corporation currently foresees. You should not place undue reliance on such forward-looking statements.

Current Technology has developed its TrichoGenesis platform into two products. Specifically, they are ElectroTrichoGenesis (ETG) and CosmeticTrichoGenesis (CTG). The Corporation owns patents relating to the technology, methodology and design of its products.

ElectroTrichoGenesis or ETG (not available in the US) provides a clinically proven treatment for hair loss. The ETG device applies a mild electrostatic field to the hair follicles in the scalp, with the result that 96% of participants in clinical tests showed regrowth of hair or a cessation of hair loss. On average, treatment group participants experienced a 66% increase in hair count after 36 weeks of a weekly 12-minute treatment regimen. Results were published in the International Journal of Dermatology, a peer reviewed medical journal. ETG treatments are presently available in a number of countries throughout the world.

In 2002, Psycho-Oncology, a peer reviewed medical journal reported on a single center pilot clinical trial to assess the efficacy of the ETG device in the prevention or reduction of hair loss in patients with breast cancer undergoing chemotherapy. Thirteen women completed the study and

twelve of the thirteen had the same amount of hair or an increase in the amount of hair at the conclusion of their chemotherapy regimen when compared to baseline. All of the women were diagnosed with breast cancer, treated with CMF chemotherapy over approximately 24 weeks, and received concurrent ETG treatments. The aforementioned peer reviewed medical journal articles can be viewed on the Corporation's website: http://www.current-technology.com.

The Corporation has developed a product to suit the requirements of the spa, health, fitness and beauty markets in the United States. CosmeticTrichoGenesis units offer a novel, non-invasive method to improve the perception of aging that accompanies a thinner looking head of hair. CTG sessions are presently available in the United States, Korea and Taiwan.

The Corporation has developed a new marketing and sales strategy, particularly as it applies to the United States and Europe. Historically revenue has been generated primarily from a combination of the sale of units to distributors and the Technology Use Fee ("TUF" or royalty) charged on each use. This is a conventional sales model wherein title actually transfers and revenue is recorded when the sale is consummated and/or TUF collected. Although the TUF may vary, it typically represents 5% to 10% of the ultimate retail price paid by the customer.

The new strategy involves placement of TrichoGenesis units with operators on a revenue sharing basis. Under the revenue sharing model, up to 50% of the retail price paid by the customer may be paid to the Corporation. Revenue sharing has the potential to significantly increase the amount of revenue the Corporation may earn from a particular unit. However, it should be noted either no sale would be recorded in such an eventuality as the unit would remain in inventory and title would not transfer (the model proposed for the UK, Europe and the Middle East) or the unit would be sold at cost (the model proposed for the United States), thus eliminating the recording of a gross profit at the time of sale. Therefore, in both instances, the revenue sharing model would result in a decrease in revenue recorded in the short run. The Corporation believes this shortfall would be more than offset in the long run by enhanced revenues over time, i.e. from revenue sharing. It should be further noted, the revenue sharing model is by its nature more capital intensive than the conventional sales model. Therefore, the Corporation has taken steps to address this issue as described below in "New Initiatives: United States" and "New Initiatives: United Kingdom". Lack of capital or suitable alternatives may limit the Corporation's ability to rollout the revenue sharing model.

Prior to 2006, the Corporation's strategy was to develop the market for CTGs in the United States by appointing distributors on a geographic basis. During 2005, the Corporation conducted a

market test and evaluation of CTG at locations in Kansas and Michigan under the direction of Strategic Laser & MedSpa, LLC ("Strategic Laser"). During the latter part of 2005, Strategic Laser approached the Corporation with the view of developing the market in the United States on a revenue sharing basis. On February 4, 2006 an interim sales agreement was entered into providing for the completion of a definitive agreement and placement of an initial order for 200 CTGs on or before June 30, 2006. In anticipation of the Strategic Laser agreement, the Corporation issued 1,400,000 restricted shares to cancel all legacy distribution agreements in the United States and terminated a pilot distributorship agreement.

The agreement with Strategic Laser is structured on a revenue sharing basis. The Corporation intends to sell CTGs to Strategic Laser at cost and will be paid up to 30% of the ultimate retail price paid by the customer. Strategic Laser has developed an introductory marketing program that should provide maximum product exposure. Simply put, all salon/spa customers will be offered free use of CTG units for the first 90 days. Starting with an initial placement of 200 units in high traffic salons and spas, Strategic Laser has constructed a financial model projecting the placement on a revenue sharing basis of up to 5000 units over five years.

Failure to complete the Strategic Laser agreement will have a material negative impact on the Corporation.

The Corporation has appointed Anchorage Capital Partners Limited ("ACP") of London, England Corporate Finance and Investment Advisor. In December 2005, a wholly owned UK subsidiary was formed - Current Technology (UK) Ltd. (the "Subsidiary"). ACP is seeking approval in principle from Her Majesty's Revenue & Customs for Venture Capital Trusts ("VCT") to invest in Current Technology on the condition the funds would in turn be advanced to the Subsidiary for expansion in the UK, Europe and the Middle East. VCT's represent a potential source of funding from a tax-assisted pool of many hundreds of millions of Pounds Sterling. VCT investments have a unique feature that is a potential benefit to shareholders of the Corporation. In order to maximize tax benefits, VCTs must hold their investment for at least three years.

The following comments relate to the Subsidiary and the Corporation's UK initiative:

The Corporation is granting the Subsidiary the exclusive right to market and sell its proprietary TrichoGenesis platform products in the UK, Europe and the Middle East (the "Territory").

ACP to raise up to 3.5 million Pounds Sterling on a best efforts basis. The proceeds to be used to exploit the Territory on a revenue sharing basis. That is, as described above rather than sell units, the Subsidiary intends to place the units with operators and earn up to 50% of the retail price paid by the customer. Given the best efforts basis of the financing, the Corporation cannot guarantee either if, or when, the financing will be completed.

Subject to investor concurrence, a portion of the proceeds may be used to fund Food and Drug Administration approval for the marketing and sale of ETG as a medical device in the United States. The Corporation cannot guarantee either if, or when, such approval may be obtained.

Subject to market conditions and corporate performance, the Subsidiary intends to seek a listing on the London Stock Exchange's AIM market. ("The most successful growth market in the world", according to AIM literature).

The Corporation expects a response from the regulatory authorities in the UK by the end of May 2006. If the response is positive, the best efforts financing effort will proceed. If the response is negative, the UK initiative will have to be amended.

The Board of Directors of the Subsidiary consists of Thomas R. Byrne (ACP Marketing Director), Robert Kramer (Current Technology CEO) and Herman Kullar (Subsidiary Managing Director and CFO).

Market test and evaluation of its proprietary ETG Mark 1 commenced April 2006 under the direction of internationally recognized hair stylist Mr. Alain Divert at a premier salon located in the heart of Paris, France. Mr. Divert is President of the France and Mediterranean Region of I.C.D. (L'Associaiton Internationale des Maitres Coiffeurs de Dames), operating under the trade name Intercoiffure Mondial. Headquartered in Paris, Intercoiffure Mondial (http://www.intercoiffure.net) has 2,300 members representing more than 8000 salons in 42 countries. Members represent the highest quality in hairdressing worldwide. Laurent Batas, Managing Director of Intercoiffure Mondial has agreed that upon successful completion of the market test and evaluation, ETG will be officially introduced to Intercoiffure members worldwide. The Corporation believes this initiative has the potential to lead to significant increases in revenue.

* Denotes CosmeticTrichoGenesis units; the balance are ElectroTrichoGenesis devices.

The following commentary relates to those markets in which recent, relevant activity has occurred.

Singapore: Gromark Consumers Enterprise Pte. Ltd. ("Gromark") is operating three ETGs in two successful locations doing business as EHR Centres and is negotiating for a third location.

Korea: Recent communication has confirmed a market test and evaluation have been concluded successfully, with plans to present results to a medical conference during the latter part of Q2 of 2006. It is premature to determine what impact these events may have on sales prospects.

Taiwan: The prospective sub-distributor ("Sub-Distributor"), having purchased four CTG units, has successfully completed a market evaluation and determined that in order to achieve its

objective of becoming the premier hair solutions provider in Taiwan, formal medical approval would be required. To that end, the health authorities in Taiwan have reportedly advised the Sub-Distributor the initial review process has been completed successfully and a formal determination should be made by July 2006. The Sub-Distributor remains confident of the ultimate outcome, although frustrated with the amount of time and money expended to date.

Other: Distributor agreements are in place with Gromark for Thailand (two units delivered) and Malaysia (two units ordered and paid for). In addition to its focus on developing markets already under contract, Gromark reports ongoing negotiations with respect to Indonesia, Macau, Australia, Japan and five regions of China. The Corporation cannot guarantee either if, or when, these negotiations will result in definitive agreements or purchase orders.

Poland: The first ETG Treatment Center opened in Warsaw, Poland in August 2005. Operating under the name "ETG Terapia", the Center is located in Warsaw's prime central business district in close proximity to the Ministry of Finance and the National Bank of Poland.

Turkey: In February 2006, the Corporation signed an exclusive distributorship agreement for the Republic of Turkey with Sanomed Medikal Teknoloji Co. ("Sanomed"). The agreement provides for the purchase of 34 ETG Mark 1 devices over the next 4 years. The principal of Sanomed, Mr. Ali Bicken, and his associate Dr. Serafettin Saracoglu, received training in Vancouver in February and two ETGs were delivered to dermatology/aesthetic clinics in Istanbul during March. In addition, during April orders for two more units were received, along with comment that an order for a fifth unit may be expected shortly.

Mexico: The exclusive distributor for Mexico, Current Image Technology S.A. de C.V. ("CIT"), opened a second ETG Treatment Center in Mexico City in July 2005. Situated in an historical building in the upscale San Angel district of the capital city, the new location compliments the successful three device flagship ETG Center in the Polanco district.

Venezuela: Centro Laser de la Belleza ("Centro Laser") was appointed exclusive distributor in December 2005, having agreed to purchase 18 ETGs over a period of 3 years. Centro Laser owns and/or operates 27 laser centers and is the largest provider of such services in Venezuela. The first ETG was shipped during Q1 of 2006 and additional orders are anticipated in the near future.

CSA International Certificate of Compliance as a Class 3872 81 Hygiene and Cosmetic Appliance certified to US standards. Date of reissue February 7, 2006.

CSA International CB Test Certificate under IEC 60335-1. Date of reissue February 8, 2006.

KEMA Quality B.V. CE Marking of Conformity Medical Devices. The certificate is valid until May 2008.

CSA International Certificate of Compliance as Class 8750 01 and Class 8750 81 medical electrical equipment. Date of issue September 9, 2005.

CSA International CB Test Certificate under IEC 60601-1. Date of reissue October 19, 2005.

KEMA - Registered Quality Inc. ISO 13485:2003. The certificate is valid until February 25, 2009.

The ETG Mark 1 has been approved as a medical device in the following countries: Canada, New Zealand, Mexico, Chile, Singapore and Thailand. In addition, the CE Marking of Conformity Medical Devices provides coverage in Europe and many other countries around the world with the exception of the United States.

Douglas Beder, PhD - New Director: Dr. Beder, Professor Emeritus, Department of Physics & Astronomy, University of British Columbia earned his undergraduate degree (Honors Mathematics and Physics) from McGill University, Montreal and his PhD in theoretical physics from the California Institute of Technology. Dr. Beder has also held, at various times, research appointments to several international centers including the Los Alamos National Laboratory, Lawrence Radiation Laboratory, Berkeley, California and the European Center for Nuclear Research, Geneva, Switzerland. A consultant to Current Technology since 1991, Dr. Beder has been intimately involved in the development of its patented TrichoGenesis platform and production of both ElectroTrichoGenesis and CosmeticTrichoGenesis units. He continues to be actively involved in the technology of the TrichoGenesis platform and plays an important role in the Quality Assurance program.

Dr. Nigel John Rulewski - New Medical and Scientific Advisor: On January 10, 2006, the Corporation announced the appointment of Nigel John Rulewski, MB, BS, DRCOG, DCH to its Medical and Scientific Advisory Board. Dr. Rulewski will also serve as Special Medical Advisor to the Chief Executive Officer and Managing Director of Current Technology (UK) Ltd. Dr. Rulewski has over 20 years experience in senior management positions in the pharmaceutical industry in both Europe and the United States. He served as Associate Medical Director of Fisons Corporation, Medical Director of Serono Inc., and Chief Medical Officer of Astra USA, Inc. (subsidiary of AstraZeneca Plc.), responsible for management of approximately 200 personnel and an R & D budget of $90 million per year.

Results of operations from a financial perspective are covered in detail later in the MD & A. The stark reality is the Corporation continues to lose significant amounts of money ($1,815,217 net loss in 2005). However, the financial results, in and of themselves, do not provide the reader with a sense of the Corporation's ability to effectively manage the potentially significant growth which may flow from the implementation of the revenue sharing model and successful rollout of all or some of the initiatives in the United States, the United Kingdom and France.

Part of the reason for the significant losses is that the Corporation has invested resources in critical areas required for rapid growth, as evidenced by the following:

The Corporation's ability to communicate with units anywhere in the world from head office is fully developed with a proprietary piece of technology useable on either an external fax modem or high speed line. This gives the Corporation the ability to monitor usage and performance, ensuring revenue generated is allocated in an appropriate manner.

The physical infrastructure is essentially in place. The addition of $25 - 50,000 of computer equipment will suffice to monitor over 1000 units placed around the world.

The human resources are also essentially in place. Additional clerical staff will be required, but only as increased volume dictates.

The Corporation's prime contractor and lead manufacturer, Sicom Industries Ltd., is moving into new manufacturing facilities in May, with space designated for manufacturing and assembly of TrichoGenesis platform products. Sicom confirms its desire and ability to meet any volume demands.

Importantly, the Corporation meets or exceeds all international standards for medical and cosmetic equipment. All required audits of the Corporation's manufacturing processes, quality assurances and quality control systems and equipment are in hand and up to date.

In summary, while the Corporation is not in a position to predict either if, or when, additional revenue will flow from these initiatives, management can confirm its ability to meet the demand in a timely and efficient manner.

Overview: The consolidated financial statements include Current Technology Corporation and Current Technology (UK) Ltd., a wholly owned subsidiary, incorporated in the United Kingdom on December 15, 2005. The subsidiary was inactive as at December 31, 2005. During the last three years, there have been no discontinued operations; no material changes in accounting policies other than the introduction of stock based compensation; and no acquisitions or dispositions other than the formation of Current Technology (UK) Ltd. The consolidated financial statements have been prepared in accordance to Canadian generally accepted accounting principles and United States generally accepted accounting principles consistently applied. The differences between Canadian and United States generally accepted accounting principles are summarized in Note 17 to the financial statements. In addition to Note 17, please refer to the Report of Independent Registered Public Accounting Firm. The reporting currency is Canadian dollars.

Consolidated Balance Sheet: The working capital deficiency decreased significantly from $1,287,023 at December 31, 2004 to $166,003 at December 31, 2005, for a total decrease of $1,121,020. This decrease in working capital deficiency was a result of the following factors: the conversion of a $347,028 convertible promissory note to equity; the restructuring of a promissory note of $881,632 to a convertible promissory note due January 2007 (offset by the addition of $141,135 of inventory financing in 2005); an increase in current assets of $92,163; an increase in subscription liability of $334,363 and a decrease in unearned revenue of $205,187. The aforementioned increase in current assets of $92,163 was primarily a result of an increase of cash of $134,443; a decrease in accounts receivable of $112,373; an increase in prepaid expenses of $22,636; and an increase in deferred financing costs of $47,317.

With respect to the shareholders' deficiency section of the balance sheet, shares were issued for $514,884 of cash; $366,569 for settlement of debt; $420,218 on conversion of a convertible promissory note; $6,127 on the exercise of options; and $298,554 on the exercise of warrants for a total increase in share capital of $1,606,352 upon the issuance of 14,414,766 shares. The equity component of the convertible promissory note increased by $108,283 after debt restructuring and contributed surplus increased by $467,951. The $467,951 increase consisted of $114,326 for stock based compensation and $353,625 for the 3.2 million warrants issued under terms of the Forbearance Agreement (please see "Debt Instruments"). The net effect of these changes was a decrease in shareholders' deficiency of $367,369 from $1,161,235 on December 31, 2004 to $793,866 on December 31, 2005.

Consolidated Statement of Loss and Deficit: During 2005, approximately 22% of expenses were stock-based rather than cash-based, as evidenced by the following:

Revenue increased from $334,441 in 2004 to $497,313 in 2005. Expenses increased from $2,175,459 in 2004 to $2,191,389 in 2005. "Other items" changed from a credit of $81,930 in 2004 to a debit of $121,141. In broad terms, the increase in revenue was more than offset by the over $200,000 negative change in "other items", while expenses remained essentially unchanged.

As a result, the net loss increased slightly from $1,759,088 in 2004 to $1,815,217 in 2005. Comparisons to 2003 have not been made as the level of activity in 2004 and 2005 appears to be more reflective of activity in 2006 and beyond; 2003 results are thus deemed to be not particularly relevant.

As previously noted, total expenses (2005 versus 2004) were essentially unchanged, but there were changes within various expense classifications worthy of comment. Increases in such expenses during 2005 as compared to 2004 consisted of: consulting of $19,400; financing costs of $35,487; total interest expenses of $23,785; legal, auditing and filing fees of $30,998; manufacturing of $149,862; marketing of $51,001; product development of $25,722; and salaries and benefits of $22,008. Decreases in such expenses during the same period consisted of: investor relations of $122,499; regulatory of $86,662; and research report of $130,802.

With respect to "other items", foreign exchange recovery increased from $81,930 in 2004 to $164,757 in 2005. In addition, in 2005, there was an $85,000 write-down of patents, licence and rights and $200,898 of accretion interest expense.

In addition to the foregoing analysis the following additional comments are in order with respect to the Consolidated Statement of Loss and Deficit. While total interest expense increased by $23,785, there was a significant change in the allocation between interest on convertible promissory note ($91,106 versus $19,924) and interest on promissory note ($33,048 versus $80,445) primarily reflecting the conversion of a promissory note to a convertible promissory note on March 22, 2005 pursuant to a Forbearance Agreement (please see "Debt Instruments" for further particulars). Approximately $200,000 of stock-based marketing expenses in 2005 relate to the termination of all legacy distribution agreements in the United States in anticipation of its agreement with Strategic Laser and MedSpa, LLC (please see "New Initiatives: United States" for further particulars). The increase in foreign exchange recovery is a reflection of exchange rate fluctuations between the Canadian and United States currencies and conversion of a convertible promissory note to common shares and warrants (see "Debt Instruments" for more particulars). The write-down of patents, licence and rights reflects the results of an impairment analysis under SFAS 144, which determined that the net present value of projected cash flows was sufficiently uncertain to warrant the write-down of the asset to zero. Accretion interest expense is explained in "Significant Accounting Policies: Debt Instruments".

Consolidated Statement of Cash Flows: The funding of operating activities of $1,255,943 and investing activity of $45,419 by net financing activities of $1,435,805 resulting in a net increase in cash of $134,443 is clearly demonstrated in this statement.

Effective January 1, 2002, the Corporation began to account for all its employee stock options with the fair value method "FAS 123". Under this method, compensation cost is

measured at the grant date based on fair value of the options granted. FAS 123 requires that the option be valued using the Black-Scholes Option Pricing Model.

The Corporation accounts for its non-employees stock options with the fair value method "FAS 123". Under this method, compensation cost is measured at the grant date based on fair value of the options granted. FAS 123 requires t hat the option be valued using the Black-Scholes Options Pricing Model.

The net result of this change is an expense of $38,200 in 2003, $120,300 in 2004 and $114,326 in 2005.

The liability component of the convertible promissory note is calculated as the present value of the scheduled cash payments of interest and principal due under the terms of the note discounted at the rate of interest applicable to a debt only instrument of comparable terms. The equity component, which represents the value ascribed to the holder's option to convert the principal balance into equity, is calculated as the difference between the amount issued and the liability component. Interest on the convertible promissory note, calculated as the amount required to accrete the liability component back to the amount payable on maturity, is charged to interest expense. When the Corporation issues warrants in connection with a debt instrument, the estimated fair market value of the warrants is credited to shareholders' equity. The reduced liability component of the debt is accreted by a charge to interest expense.

In addition to the foregoing, during the year 2005, the Corporation received US$287,500 for the private placement of 2,300,000 units. Subsequent to December 31, 2005, the Corporation received US$237,500 for the private placement of 1,900,000 units. Each unit consists of one share and one five year warrant with an exercise price of US$0.25. The Corporation may accelerate the expiration date of the warrants if the average closing price equals or exceeds $0.50 for 20 consecutive days. Under such circumstances the warrants must be exercised within 21 days. The units were issued April 13, 2006. Subsequent to December 31, 2005 the Corporation also received US$58,230 for the exercise of warrants, and US$9,375 for the exercise of options. There are no preferred shares outstanding.

The date that is one year and five business days after the date on which the new convertible promissory note is paid in full.

Stock Options: From time to time the Corporation grants incentive stock options to directors, officers, employees and promoters of the Corporation. In addition, on September 2, 2004 the Corporation adopted the 2004 Stock Option and Stock Bonus Plan with a maximum of 3,000,000 shares of common stock of the Corporation reserved for issuance upon exercise of options or grant of stock bonuses that may be issued under the Plan. The Corporation filed a Form S-8 registration statement in the United States, registering the shares issued under the Plan.

Promissory Note December 31, 2005: On July 25, 2005 the Corporation issued a secured promissory note in the amount of US$110,000. The secured note bears interest of 24% and matures on January 27, 2006. The note is secured by a registered charge on 20 TrichoGenesis units which are being manufactured. Payments under the note may be accelerated on a pro-rata basis as the units are sold. As additional consideration, the lender purchased 200,000 units for US$10,000. Each unit consists of one share and one five year warrant with an exercise price of US$0.15. The note was fully repaid on January 26, 2006.

Convertible Promissory Note December 31, 2005: The promissory note outstanding balance at December 31, 2004 was US$733,471. The promissory note was due to a lender who owns over 20% of the Corporation. The promissory note was restructured pursuant to a Forbearance Agreement to include a conversion feature where the lender can convert each US$0.25 of principal and accrued interest owing to one common share of the Corporation at any time until maturity. Subsequent to December 31, 2004 and prior to the restructuring, the lender advanced the Corporation US$76,456. Including interest accrual to March 22, 2005 of US$16,408, the total principal restructured on March 22, 2005 was US$826,335. This new convertible note bears interest of 10% and matures on January 2, 2007. At December 31, 2005, the liability portion of this note was $688,174, calculated as follows:

The promissory note is secured by a security agreement under which the Corporation agreed to grant the lender security interest over all the Corporation's property and assets, including all

intellectual property. It should be noted the conversion price of US$0.25 per share was set at the prevailing market price, not at a discount to market.

Convertible Promissory Note December 31, 2004: As at December 31, 2004, the Corporation had one convertible promissory note outstanding. The convertible promissory note was due to a lender who owns over 20% of the Corporation. The total principal amount owing was US$279,300 of which US$125,500 was non-interest bearing and US$153,800 with interest at a fixed rate of 10% per annum. The convertible promissory note was converted into shares and share purchase warrants of the Corporation on March 22, 2005 pursuant to a Forbearance Agreement. The Corporation agreed to include accrual interest up to August 31, 2005 in the amount of US$10,239.29 as part of the principal. As such the total principal of US$347,488 was converted at US$0.05 into one unit consisting of one common share and one warrant. As a result of the conversion, the lender received 6,949,766 of common shares and 6,946,766 of warrants. The 6,949,766 of warrants are exercisable for shares at US$0.05 and will expire on the later of January 7, 2007 or on the date which is one year and five business days after the Corporation repays the new convertible promissory note referred to above.

It should be noted no new advances were made under the subject convertible promissory note after September 2001. When the convertible promissory note was negotiated with the lender the stock was trading in the US$0.05 per share range. That is, once again, the conversion price for the transaction was negotiated at par, not at a discount to market.

As additional consideration for the above debt restructuring, the Corporation agreed to issue 3,200,000 share purchase warrants exercisable for common shares at US$0.25. The expiry date of these warrants is the later of January 2, 2010 and the date which is one year and five business days after the date on which principal and accrued interest owing are fully repaid.

The Corporation also agreed, as part of the above debt restructuring, to extend the expiry dates of all existing warrants held by the lender as follows:

the date that is one year and five business days after the date on which the debt and any interest payable has been repaid in full.

Currency Fluctuations: On December 31, 2005 the Corporation had a convertible promissory note denominated in US dollars. On March 22, 2005, under terms of a Forbearance Agreement, the Corporation restructured a promissory note and a convertible promissory note, both of which were outstanding on December 31, 2004 and also demonstrated in US dollars. There was a significant increase in the value of the Canadian dollar versus the US dollar from December 31, 2002 (.6339) to December 31, 2005 (.8598). This increase in the value (i.e. strength) of the Canadian dollar resulted in a significant unrealized foreign exchange gain or recovery in 2003 of $217,023, in a modest foreign exchange gain of $81,930 in 2004 and a gain of $165,757 to December 31, 2005. The actual foreign exchange gain or loss will not be recorded until the notes are converted or repaid. The Corporation does not hedge its foreign exchange risk.

It must be noted, these exchange rate fluctuations have both positive and negative effects on the Corporation. While a stronger Canadian Dollar is positive in terms of debt repayment, it is negative in terms of sales as the Corporation receives US Dollars from the sales of its products. As the value of the Canadian Dollar has increased versus the US Dollar, the amount of Canadian Dollars recorded per US Dollars of sales has decreased. For example, US$10,000 of sales would have been recorded as $15,776 on December 31, 2002 and only $12,965 on December 31, 2003, $12,020 on December 31, 2004, and $11,630 on December 31, 2005.

The following table sets forth unaudited quarterly information for each of the eight quarters ended March 31, 2004 through December 31, 2005. This information has been derived from unaudited interim financial statements that, in the opinion of the Corporation's management, have been prepared on a basis consistent with the audited annual financial statements. To that end, certain quarterly operating loss and net loss figures have been amended to conform with financial presentation used in the audited December 31, 2005 consolidated financial statements.

The Corporation announced recommencement of manufacturing of TrichoGenesis units at the end of June 2004. This event marked a significant departure from recent years, during which the only units available for sale were reconditioned used units. The lack of new or used inventory to fulfil orders was the reason revenue dropped so dramatically in Q3 of 2004. As new units from the manufacturing process became available for sale in Q4 of 2004, revenue increased and sales were sufficient to warrant a second order of 20 new units in July 2005. The reduction in revenue in Q4 of 2005 resulted primarily from a move towards the revenue sharing model wherein the Corporation maintains ownership of its TrichoGenesis units and participates in downstream revenue, as opposed to the more conventional sales model wherein title actually transfers and revenue is recorded as the sale is consummated. Management believes recommencement of manufacturing is one of the most significant developments of recent years as it is tangible evidence of improved circumstances and may portend future revenue growth.

However, as evidenced by ongoing losses, the Corporation has not achieved a breakeven position and does not generate sufficient revenue to sustain itself. Although revenue in 2004 was approximately 45% greater than 2003, and revenue for 2005 was approximately 50% greater than revenue for 2004, revenue can only be described as modest at best. In the circumstances, comparisons stated in percentage terms are not particularly meaningful. The Corporation believes annual revenue may increase significantly as a result of its initiatives in the United States, Europe and Asia, however, quarter by quarter comparisons will probably remain less than meaningful in the near term.

The Corporation incurred a net loss of $1,815,217 during the year ended December 31, 2005. The Corporation has reported recurring losses from operations since inception which have resulted in an accumulated deficit of $36,112,150 at December 31, 2005. A convertible promissory note with a balance of $1,084,629 on December 31,2005 is due January 2, 2007. Although the note is convertible at US$0.25 per share, the lender who already owns over 20% of the Corporation may demand payment in cash. The Corporation is currently engaged in

discussions with potential investors which could result in receipt of additional financing and/or the sale of certain rights for consideration including cash. There is no certainty that these discussions will be concluded successfully. The ability of the Corporation to continue as a going concern is dependent on the successful conclusion of these discussions and/or negotiations, the receipt of additional financing and/or proceeds on the sale of assets and ultimately its ability to generate sufficient cash from operations and financing sources to meet obligations as they come due.

I have reviewed this annual report on Form 20-F of Current Technology Corporation;

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this annual report;

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) <intentionally omitted per SEC Release 33-8238> for the Company and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

I have reviewed this annual report on Form 20-F of Current Technology Corporation;

based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Incorporated by reference to the Company’s Form 20-F, dated December 31, 2003 and filed July 8, 2004.

Incorporated by reference to the Company’s Form 20-F, dated December 31, 2004 and filed July 7, 2005.

In connection with the Annual Report of Current Technology Corporation (the "Company") on Form 20-F for the annual period ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned certifies pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Year Ended	Year Ended	Year Ended	Year Ended	Year Ended
Statement of	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,
Operations Data:	2005	2004	2003	2002	2001
Net Sales	$495,710	$333,441	$234,733	$104,337	$59,113
Other Income	1,603	1,000	129	2,451	586
Total Revenue	497,313	334,441	234,862	106,788	59,699
(Loss) from	(1,694,076)	(1,841,018)	(1,061,972)	(1,234,179)	(875,785)
Operations
(Canadian GAAP)
(Loss) from	(1,694,076)	(1,841,018)	(1,061,972)	(1,234,179)	(875,785)
Continuing
Operations
(Canadian GAAP)
Net Loss	(1,815,217)	(1,759,088)	(846,567)	(1,236,346)	(911,138)
(Canadian GAAP)
Net Loss (US	(1,815,217)	(1,759,088)	(846,567)	(1,236,346)	(1,100,799)
GAAP)
(Loss) from	(0.03)	(0.03)	(0.02)	(0.03)	(0.02)
Operations per
Common Share (US
GAAP)

	Year Ended	Year Ended	Year Ended	Year Ended	Year Ended
Statement of	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,	Dec. 31,
Operations Data:	2005	2004	2003	2002	2001
(Loss) from	(0.03)	(0.03)	(0.02)	(0.03)	(0.02)
Continuing
Operations per
Common Share (US
GAAP)
Balance Sheet Data:
Total Assets	719,254	692,568	259,962	299,438	689,065
Cash and Cash	339,973	205,530	27,288	62,011	47,488
Equivalents
Net Assets	(793,866)	(1,161,235)	(1,342,178)	(850,202)	(179,112)
Stockholders'
Equity
(Deficiency)
(Canadian GAAP)
Net Assets	(1,317,409)	(1,576,495)	(1,757,438)	(1,272,165)	(601,075)
Stockholders'
Equity(Deficiency)
(US GAAP)
Capital Stock	$34,061,493	$32,455,141	$30,635,410	$30,255,761	$29,107,492
Number of shares outstanding	74,655,023	60,240,257	51,136,811	48,333,015	44,003,015
Number of shares outstanding
(weighted average)(US GAAP)	66,637,565	54,477,115	48,585,542	47,333,293	41,249,884


Calendar Year		Average Rate for the Year
2001		1.55
2002		1.57
2003		1.40
2004 2005		1.30 1.21

	Stock-	Cash-based	Total
	based
Amortization	-	25,896	25,896
Bank charges and interest	-	13,444	13,444
Consulting	-	19,400	19,400
Financing costs	-	35,487	35,487
Interest on convertible promissory note	-	91,106	91,106
Interest on promissory note	-	33,048	33,048
Investor relations	36,762	90,044	126,806
Legal, auditing and filing fees	-	173,002	173,002
Manufacturing	23,338	322,856	346,194
Marketing	281,639	110,011	391,650
Office and other	-	52,918	52,918
Product development		25,722	25,722
Public relations	9,710	64,153	73,863
Regulatory	-	34,958	34,958
Rent	-	58,925	58,925
Salaries and benefits		382,458	382,458
Stock based compensation	114,326	-	114,326
Telephone	-	25,500	25,500
Test and studies	15,120	89,071	104,191
Travel	-	62,495	62,495
	$480,895	$1,170,494	$2,191,389

As at December 31, 2005
Contractual Obligations in CDN $		Payments Due by Period
					More than
	Total	Less Than	1-3 Years	3-5 Years	5 years
		One Year
Convertible promissory note *	$1,084,629	-	$1,084,629	-	-
Promissory note	141,135	141,135	-	-	-
Operating Leases	180,166	32,900	65,800	68,933	12,533
Total Contractual Obligations	$1,405,930	$174,035	$ 1,150,429	$68,933	$12,533

					New
Number of Warrants	Expiry Date		Exercise Price	Expiry Date*
2,000,000	January 3,	2005	$0.25	January	9,	2007
2,980,000	February 7,	2005	$0.10	January	9,	2007
179,167	September 27,	2006	$0.15	January	9,	2007
1,600,000	October 11,	2006	$0.50	January	9,	2007

		Number of	Canadian
		Shares	Dollar
			Amount
Common Shares Issued -
-	For cash	3,700,000	514,884
-	For settlement of debt	1,965,000	366,569
-	Conversion of promissory	6,949,766	420,218
note
-	Exercise of warrants	1,700,000	298,554
-	Exercise of options	100,000	6,127
		14,414,766	$1,606,352

Employee and Consultant Options To Purchase Common Stock Outstanding as of December 31, 2005

Number of	Price
Common Shares	Per Share	Expiry Date
570,000	$0.05	February	7,	2007*
100,000	$0.05	December	20,	2007*
275,000	$0.125	September	6,	2007
225,000	$0.26	December	19,	2007
250,000	$0.26	April	8,	2008
200,000**	$0.30	September	30,	2009
850,000	$0.25	October	17,	2009
75,000	$0.23	May	17,	2010
200,000	$0.28	November	20,	2010
175,000	$0.25	December	22,	2009
100,000**	$0.32	December	23,	2009
3,020,000***

Assets		2005	2004
Current:
Cash	$	339,973	$ 205,530
Accounts receivable		802	113,175
Inventory		64,461	64,321
Prepaid expenses		206,390	183,754
Deferred financing costs		47,317	-
		658,943	566,780
Equipment and website development (Note 3)		60,311	35,788
Patents, license and rights (Note 4)		-	90,000
	$	719,254	$ 692,568
Liabilities
Current:
Accounts payable and accrued liabilities	$	245,391	$ 315,899
Promissory notes (Note 5)		141,135	881,632
Convertible promissory notes (Note 6)		-	347,028
Subscription liability (Note 7)		334,363	-
Unearned revenue		104,057	309,244
		824,946	1,853,803
Convertible promissory notes (Note 6)		688,174	-
		1,513,120	1,853,803
Shareholders' Deficiency
Equity component of convertible promissory notes (Note 6)		243,728	135,445
Share capital (Note 7)		34,061,493	32,455,141
Contributed surplus (Note 8)		1,013,063	545,112
Deficit, per Exhibit "B"		36,112,150	34,296,933
		(793,866)	(1,161,235)
Future Operations (Note 1)
Commitments (Note 15)
Subsequent Events (Note 16)
	$	719,254	$ 692,568

		Accumulated	2005	2004
	Cost	Amortization	Net	Net
Computer equipment and software	$197,581	$180,474	$17,107	$11,994
Furniture and fixtures	43,932	41,443	2,489	15,106
Office equipment	117,273	97,015	20,258	1,952
Production equipment	13,110	655	12,455	-
Website development	42,575	34,573	8,002	6,736
	$414,471	$354,160	$60,311	$35,788

Principal and interest	$1,084,629
Less: Unamortized accretion from conversion feature	$139,273
Unamortized accretion from fair valuation of warrants	257,182	396,455
		$ 688,174

Number		Exercise		New
of Warrants	Expiry Date	Price		Expiry Date			*
2,000,000	January 3, 2005	US	$0.25	January	9,	2007
2,980,000	February 7, 2005	US	$0.10	January	9,	2007	*
179,167	September 27, 2006	US	$0.15	January	9,	2007
1,600,000	October 11, 2006	US	$0.50	January	9,	2007

	2005		2004
	Number		Number
	Shares of	Amount	Shares of	Amount
Balance, beginning	60,240,257	$32,455,141	51,136,811	$30,635,410
Common Shares Issued -
- For cash	3,700,000	514,884	5,637,696	919,745
- For settlement of debt	1,965,000	366,569	2,465,750	703,036
- Conversion of promissory note	6,949,766	420,218	-	-
- Exercise of options	100,000	6,127	-	-
- Exercise of warrants	1,700,000	298,554	1,000,000	196,950
Balance, ending	74,655,023	$34,061,493	60,240,257	$32,455,141

				Number
Expiry Date				of Shares	Option Price
February	7,	2007		3,070,000	US	$0.05
December	20,	2007		200,000	US	$0.05
September	6,	2007		275,000	US	$0.125
October	10,	2007		200,000	US	$0.20
December	19,	2007		225,000	US	$0.26
April	8,	2008		250,000	US	$0.26
September	30,	2009	*	200,000	US	$0.30
October	17,	2009		850,000	US	$0.25
December	22,	2009		175,000	US	$0.25
December	23,	2009	*	100,000	US	$0.25
May	17,	2010		175,000	US	$0.23
July	15,	2010		150,000	US	$0.26

	2005		2004
		Weighted		Weighted
		Average		Average
	Common	Exercise Price	Common	Exercise Price
	Shares	$	Shares	$
Outstanding, beginning	5,870,000	0.13	5,270,000	0.12
- Granted	600,000	0.24	600,000	0.26
- Exercised	(100,000)	0.05	-	-
- Cancelled	(100,000)	0.30	-	-
Outstanding, ending	6,270,000	0.14	5,870,000	0.13
Exercisable, ending	6,270,000	0.14	5,870,000	0.13

		2005	2004	2003
Revenue	$ 497,313		$ 334,441	$ 234,862
Expenses:
Amortization		25,896	35,320	42,391
Bank charges and interest		13,444	9,850	4,562
Consulting		19,400	-	11,085
Financing costs		35,487	-	-
Interest on convertible promissory note		91,106	19,924	32,181
Interest on promissory note		33,048	80,445	52,317
Investor relations		126,806	249,305	42,566
Legal, auditing and filing fees		173,002	142,004	132,807
Manufacturing		346,194	196,332	91,141
Marketing		391,650	340,649	79,745
Office and other		52,918	51,953	43,978
Product development		25,722	-	-
Public relations		73,863	62,919	86,290
Regulatory		34,958	121,620	20,227
Rent		58,925	51,258	49,267
Research report		-	130,802	-
Salaries and benefits		382,458	360,450	360,890
Stock-based compensation		114,326	120,300	38,200
Telephone		25,500	26,635	26,146
Tests and studies		104,191	108,965	108,650
Travel		62,495	66,728	74,391
		2,191,389	2,175,459	1,296,834
Loss before other items		1,694,076	1,841,018	1,061,972
Other Items:
Foreign exchange recovery		(164,757)	(81,930)	(217,023)
Loss on disposal of equipment		-	-	1,618
Write-down of patents, license and rights		85,000	-	-
Accretion interest expense		200,898	-	-
		121,141	(81,930)	(215,405)
Net Loss		1,815,217	1,759,088	846,567
Deficit, beginning		34,296,933	32,537,845	31,691,278
Deficit, ending, to Exhibit "A"	$36,112,150		$34,296,933	$32,537,845
Basic and fully diluted net loss per share	$	(0.03)	$ (0.03)	$ (0.02)

		2005		2004		2003
Future Income Tax Assets:
Eligible capital expenditure	$	51,878	$	51,878	$	58,257
Equipment and website development		389,920		346,399		368,744
Operating loss carryforward		2,277,074		2,460,546		2,981,545
Net capital loss carryforward		1,122,157		1,122,157		1,260,142
Financing cost		6,741		-		-
		3,847,770		3,980,980		4,668,688
Less: Valuation loss provision		(3,847,770)		(3,980,980)		(4,668,688)
	$	-	$	-	$	-

	2005	2004
Transactions During the Year -
Salaries and consulting fees accrued or paid	$318,278	$293,738
Interest paid to a director for overdue salary payable	8,000	6,000
These transactions are in the normal course of operations and
are measured at the exchange amount, which is the amount of
consideration established and agreed to by related parties.
Balance at Year End -
Salaries, consulting fees payable to directors and
companies controlled by directors of the company	17,608	26,608


	Stock-based	Cash-based	Total
Amortization	-	25,896	25,896
Bank charges and interest	-	13,444	13,444
Consulting	-	19,400	19,400
Financing costs	-	35,487	35,487
Interest on convertible promissory note	-	91,106	91,106
Interest on promissory note	-	33,048	33,048
Investor relations	36,762	90,044	126,806
Legal, auditing and filing fees	-	173,002	173,002
Manufacturing	23,338	322,856	346,194
Marketing	281,639	110,011	391,650
Office and other	-	52,918	52,918
Product development		25,722	25,722
Public relations	9,710	64,153	73,863
Regulatory	-	34,958	34,958
Rent	-	58,925	58,925
Salaries and benefits		382,458	382,458
Stock based compensation	114,326	-	114,326
Telephone	-	25,500	25,500
Test and studies	15,120	89,071	104,191
Travel	-	62,495	62,495

	$480,895	$1,170,494	$2,191,389


	Number of Shares	Amount
Balance, beginning	60,240,257	$32,455,141
Common Shares Issued -
- For cash	3,700,000	514,884
- For settlement of debt	1,965,000	366,569
- Conversion of promissory note	6,949,766	420,218
- Exercise of warrants	1,700,000	298,554
- Exercise of options	100,000	6,127

Balance, ending	74,655,023	$34,061,493


Principal and interest		$1,084,629
Less: Unamortized accretion from conversion feature	$139,273
Unamortized accretion from fair valuation of warrants	257,182	396,455
		$ 688,174