Edgar Filing: Revelstoke Industries, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended May 31, 2006

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

For the transition period from _____ to _______

Commission file number 0-32593

REVELSTOKE INDUSTRIES, INC.
_________________________________________________________________
(Exact name of small business issuer as specified in its charter)

NEVADA 98-0441019
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)

14977 21st Avenue
Surrey, British Columbia
Canada V4A 8G3
________________________________________
(Address of Principal Executive Offices)

(604) 329.9593
___________________________
(Issuer's telephone number)

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

None
________________
(Title of class)

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

Common Stock, Par Value $0.001
______________________________
(Title of class)

Indicate by check mark whether the issuer (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 issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of issuer's knowledge, in definitive
proxy of information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB. [X]

Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State issuer's revenues for its most recent fiscal year (ending May 31,
2006): $-0-.

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrant's most recently completed fiscal
quarter: August 31, 2006: $-0-

Applicable Only to issuers Involved in Bankruptcy Proceedings
During the Preceding Five Years.

N/A

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

Yes [ ] No [ ]

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

Class Outstanding as of September 13, 2006

Common Stock, $.001 par value 16,800,000

Documents Incorporated By Reference

List hereunder the following documents if incorporated by reference and
the Part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the
document in incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980).

INDEX PAGE

ITEM 1. DESCRIPTION OF BUSINESS 5

ITEM 2. DESCRIPTION OF PROPERTIES 14

ITEM 3. LEGAL PROCEEDINGS 15

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 15

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION 16

ITEM 7. FINANCIAL STATEMENTS 20

CONSOLIDATED BALANCE SHEET 23

CONSOLIDATED STATEMENT OF OPERATIONS 24

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 25

CONSOLIDATED STATEMENTS OF CASH FLOWS 26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 27

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 32

ITEM 8A. CONTROLS AND PROCEDURES 33

ITEM 8B. OTHER INFORMATION 34

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT 34

ITEM 10.EXECUTIVE COMPENSATION 36

ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 36

ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 37

ITEM 13.EXHIBITS 38

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES 38

SIGNATURES 39

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-KSB that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section
21E of the Securities Exchange Act of 1934. These statements often can be
identified by the use of terms such as "may," "will," "expect," "believe,"
"anticipate," "estimate," "approximate" or "continue," or the negative thereof.
We intend that such forward-looking statements be subject to the safe harbors
for such statements. We wish to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations
and events and those presently anticipated or projected. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.

AVAILABLE INFORMATION

Revelstoke Industries, Inc. files annual, quarterly, current reports,
proxy statements, and other information with the Securities and Exchange
Commission (the "Commission"). You may read and copy documents referred to in
this Annual Report on Form 20-F that have been filed with the Commission at the
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You
may obtain information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission
filings by going to the Commission's website at http://www.sec.gov

PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

Revelstoke Industries, Inc. was incorporated under the laws of the
State of Nevada on April 5, 2004 for the purpose of reclaiming and stabilizing
land in preparation for construction in Canada. We intend to enter the United
States market utilizing this business strategy.

Throughout this report, and unless otherwise noted, the words "we,"
"our," "us," or the "Company" refer to Revelstoke Industries, Inc.

RECENT DEVELOPMENTS

MAY 1, 2006 FORWARD STOCK SPLIT

On May 1, 2006, our Board of Directors pursuant to minutes of written
consent in lieu of a special meeting authorized and approved a forward stock
split of forty-two (42) for one of our total issued and outstanding shares of
common stock (the "Forward Stock Split").

The Forward Stock Split was effectuated based on market conditions and
upon a determination by our Board of Directors that the Forward Stock Split was
in our best interests and of the shareholders. In our judgment the Forward Stock
Split will result in an increase in our trading float of shares of common stock
available for sale resulting in facilitation of investor liquidity and trading
volume potential. The intent of the Forward Stock Split is to increase the
marketability of our common stock.

The Forward Stock Split was effectuated with a record date of May 1,
2006 upon filing the appropriate documentation with NASDAQ. The Forward Stock
Split increased our issued and outstanding shares of common stock from 400,000
to approximately 16,800,000 shares of common stock. The common stock will
continue to be $0.001 par value.

CURRENT BUSINESS OPERATIONS

GENERAL

We are currently engaged in the identification of certain parcels of
land for the purpose of reclaiming and stabilizing such land in preparation for
construction throughout Canada and the United States. We currently identify,
reclaim and stabilize such parcels of property under the expertise of Alantic
Contractors Ltd., a construction contractor company with over thirty years
experience ("Alantic"). Using Alantic's management and expertise, we intend to
expand into the United States market for construction and reclamation and
preparation. We believe there are significant parcels of land in the United
States, including largely peat-bearing lands, currently not viable for
development because they are unstable. Traditional techniques and costs to

develop such lands would render the land prohibitively expensive. Therefore, we
intend to open our first sales office on the west coast of the United States and
market our services to large and mid-size commercial builders. Until we have
established a sufficient client base to justify hiring full-time staff, we will
act essentially as a marketing and contracting company. All land reclamation
contracts we enter into will be subcontracted to Alantic. As we gain clients and
as revenue increases, we intend to open one or more west coast construction
offices and hire experience staff to manage our land reclamation contracts
ourselves.

SITE RECLAMATION AND STABILIZATION

Peat, silt and other organic soils present an unstable base for
construction. Buildings, parking lots and other improvements on such unprepared
soils will settle unevenly, thereby causing structural instability and,
eventually, costly site remediation or loss of the foundation. Unstable soils
must be either preloaded, excavated and replaced, or pilings must be installed
to provide a stable base for foundation. Depending upon the depth of the
unstable soils, removal of undesirable materials and replacement with structural
fill, or the installation of pilings may be uneconomical alternatives. Proper
staged preloading may be the only viable alternative in relatively deep,
unstable soils.

In Canada, Alantic has developed an expertise in preloading and
stabilizing fragile land unable to support the weight of commercial buildings,
and reclaiming it for profitable development. Preloading is a process whereby
unstable soils are consolidated and settled by loading the site in stages with
structural fill -- sometimes yards deep and weighing thousands of tons -- in a
predetermined manner. This compacts and consolidates the underlying soils over a
period of months and possibly years. When the short term settlement has been
exhausted, the preload -- that is, the amount of material above finished grade -
-- is removed, leaving the site with a stable foundation for construction.

Preloading is not a new technology; in fact, it has been in use for
many years. In recent years, however, a niche has developed where contractors
like Alantic have capitalized on the need for sites (landfills) to receive
excess structural fill generated as a consequence of multilevel underground
developments. Through the relocation of this structural fill, and with the
revenue generated by tipping fees charged, sites which were once not
economically viable to develop are afforded the opportunity to proceed.

With our ability to contract Alantic's management and senior staff, and
with outside geotechnical engineers, we intend to assist owners of unstable
lands to prepare and reclaim their lands for development. The process for us
will typically begin with a review of the particular site's soils by a
geotechnical engineer, including soil composition, depth and other
characteristics that will describe its behavior and viability for its intended
use. See "BUSINESS - Material Contracts."

Along with the geotechnical consultant, we will develop a staged plan
to fill and preload prospective sites. Next, the subject site would be cleared
and instrumentation installed in preparation for monitoring the site elevation
changes and any possible effects on surrounding properties or structures.
Structural landfill materials would be sourced through local projects and
excavation contractors, with tipping fees being negotiated. Initial fill depths
would be designed to allow for broad access over the site, while inducing some
of the dramatic, primary settlement. Over a period of months and even years,

additional layers of structural fill will be added as fill, and ultimately a
preload to prepare the location of any structures to be built.

The rate of settlement will be monitored over the ensuing months using
surveyors to gather data from the instrumentation installed prior to preloading.
The geotechnical consultant is responsible for determining the array of
instrumentation to be installed, the frequency of data collection, and
interpretation of the data. The rate of settling or lateral movement is
typically greatest in the early months, and declines over time. The performance
of the site as proven in the data will determine adjustments to the proposed
plan of site filling and preloading. This will be done in consultation with the
geotechnical engineer.

We will not provide reclamation services relating to contaminated
soils.

MARKET AND INDUSTRY ANALYSIS

Alternatives to preloading for preparing unstable-soil sites for
construction include soil removal and replacement, and installation of pilings.
The removal of unstable soils and replacement with structurally suitable fill
may be appropriate for shallow soil depths, however the volume of soil required
to be removed from sites with deeper soils could make excavation, hauling and
disposal uneconomical.

Pilings are a traditional solution for long term stabilization. This is
typically an expensive solution, and may be particularly uneconomical in deep
soils.

Our competitors in site preparation and reclamation by preloading range
from contractors with similar background and experience such as Hayward Baker,
Inc. in California and Case Foundation Company in Arizona, to small contractors
with little or no experience in other than general excavation services. We
intend to build on the experience and reputation of Alantic to develop our
clientele in the United States. See `BUSINESS - Competition."

MATERIAL CONTRACTS

On approximately January 27, 2005, we entered into an agreement of
understanding with Alantic (the "Alantic Agreement"), pursuant to which Alantic
will provide us with guidance in launching our operations within the United
States, advise on operational matters and assist us in promoting our business
through Alantic's existing associates. In accordance with the terms and
provisions of the Alantic Agreement: (i) we will utilize our contacts and
business network to procure potential properties within the United States for
site preparation and reclamation; (ii) Alantic will act as contractor and
perform services including, but not limited to, the following: (a) establish
initial budgets, (b) supervise and procure engineering services, (c) obtain
state and local regulatory approvals, (d) prepare periodic project budget
reviews, (e) implement systems to conform to local and state regulations, (f)
supervise construction team, including site engineering by Alantic's own staff
engineer, (g) acquire equipment and/or services of local subcontrators, (h)
select and source potential fill materials, and (i) establish and direct
day-to-day operations; and (iii) we shall compensate Alantic for their goods and
services on a cost plus basis, which entails payment for their costs plus a
markup of 5% for overhead and 10% for profit for a total of a 15% markup and a
flat fee in the amount of $2,500 plus travel expenses to appraise the viability
of individual prospective projects.

We believe that Alantic and its management have over thirty years of
expertise and excavation experience, and have specialized in soft-ground
development almost exclusively for the last fifteen years. Alantic is owned and
managed by Mr. Russell J. Shiels of Langley, British Columbia, Canada, who is
one of our significant shareholders.

We further believe that an expertise in the field of soft-ground
development is necessary to minimize the risk of damage to adjacent buildings
and nearby infrastructure, unexpected on-site soil structure damage, and future
damage to newly constructed buildings. Experienced management and staff and
geotechnical preparation reduces this risk to a manageable level. Expertise is
also necessary for the proper management of structural fill inventories and
availabilities. Costs can increase markedly when large volumes of structural
fill must be transported over great distances. Economies can be had when fill
can be removed from one site and moved a short distance to provide the fill for
another site. Proper management of structural fill is a function of management
experience.

REGULATION

As of the date of this Annual Report, we intend to conduct business in
the United States under the regulation of United States corporate law,
environmental laws, such as those administered by the U.S. Environmental
Protection Agency, state building codes, such as the regulations administered by
respective state building standards commissions, local zoning laws, such as
those contained in local municipal codes; construction and workers' compensation
regulations, and pertinent business and professional codes.

These regulations will impact on our business by guiding how and when
we undertake our operations, the type and frequency of regulatory reporting, and
the payment of related taxes. Our clientele will be responsible for the cost of
all zoning prior to the commencement of our work on particular construction
sites.

COMPETITION

We operate in a highly competitive industry, competing with major site
preparation and reclamation companies, independent contractors and institutional
and individual investors, which are actively seeking properties throughout the
world together with the equipment, labor and materials required to reclaim and
stabilize sites by preloading. Most of our competitors have financial resources,
staffs and facilities substantially greater than ours. The principal area of
competition is encountered in the financial ability to identify and acquire
viable sites. Competition for the acquisition of sites may be intense. We may
not be successful in identifying, reclaiming and stabilizing profitable
properties in the face of this competition. No assurance can be given that a
sufficient number of sites will be available.

RESEARCH AND DEVELOPMENT ACTIVITIES

No research and development expenditures have been incurred during the
past three years.

EMPLOYEES

We do not employ any persons on a full-time or on a part-time basis.
Marcus Johnson is our President and Chief Executive Officer, D. Bruce Horton is
our Chief Financial Officer and Principal Accounting Officer. These individuals
are primarily responsible for all our day-to-day operations. Other services are
provided by outsourcing, consultant, and special purpose contracts.

RISK FACTORS

An investment in our common stock involves a number of very significant
risks. You should carefully consider the following risks and uncertainties in
addition to other information in evaluating our company and its business before
purchasing shares of our common stock. Our business, operating results and
financial condition could be seriously harmed due to any of the following risks.
The risks described below are all of the material risks that we are currently
aware of that are facing our company. Additional risks not presently known to us
may also impair our business operations. You could lose all or part of your
investment due to any of these risks.

RISKS RELATED TO OUR BUSINESS

OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE A LIMITED
OPERATING HISTORY. In considering whether to invest in our common stock, you
should consider that there is only limited historical financial and operating
information available on which to base your evaluation of our performance. Our
inception as a reclamation and stabilization of land for construction was April
2004 and, as a result, we have a limited operating history. Moreover, businesses
which are starting up or in their initial stages of development present
substantial business and financial risks and may suffer significant losses from
which they cannot recover. We will face all of the challenges of a new business
enterprise, including but not limited to, locating suitable office space,
engaging the services of qualified support personnel and consultants,
establishing budgets and implementing appropriate financial controls and
internal operating policies and procedures. We will need to attract and retain a
number of key employees and other service personnel. Further, there is no
assurance that we will be able, upon completion of this Offering, to
successfully continue our operations or that we will ever operate profitably.

WE HAVE A HISTORY OF OPERATING LOSSES AND THERE CAN BE NO ASSURANCES WE
WILL BE PROFITABLE IN THE FUTURE. We have a history of operating losses, expect
to continue to incur losses, and may never be profitable, and we must be
considered to be in the development stage. Further, we have been dependent on
sales of our equity securities and debt financing to meet our cash requirements.
We have incurred losses totaling approximately $136,754 since inception (April
5, 2004) through fiscal year ended May 31, 2006. As of May 31, 2006, we had a
working capital surplus of $37,413. However, we do not anticipate positive cash
flow from operations in the near term. There is no assurance that actual cash
requirements will not exceed our estimates. In particular, additional capital
may be required to meet our objectives and provide more working capital for
expanding our development capabilities and to achieve our ultimate plan of
expansion and full scale of operations. There can be no assurance that we will
be able to obtain such financing on attractive terms, if at all.

WE HAVE RECEIVED A GOING CONCERN OPINION FROM OUR INDEPENDENT AUDITORS
REPORT ACCOMPANYING OUR MAY 31, 2006 AND 2005 FINANCIAL STATEMENTS. The
independent auditor's reports accompanying our May 31, 2006 and 2005 financial
statements contains an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The consolidated financial
statements have been prepared "assuming that the Company will continue as a
going concern," which contemplates that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business. Our ability
to continue as a going concern is dependent on raising additional capital to
fund our operations and ultimately on generating future profitable operations.
There can be no assurance that we will be able to raise sufficient additional
capital or eventually have positive cash flow from operations to address all of
our cash flow needs. If we are not able to find alternative sources of cash or
generate positive cash flow from operations, our business and shareholders will
be materially and adversely affected.

WE WILL REQUIRE ADDITIONAL FUNDING IN THE FUTURE. Based upon our
historical losses from operations, we will require additional funding in the
future. If we cannot obtain capital through financings or otherwise, our ability
to execute our development plans will be greatly limited. Historically, we have
funded our operations through the issuance of equity and short-term debt
financing arrangements. We may not be able to obtain additional financing on
favorable terms, if at all. Our future cash flows and the availability of
financing will be subject to a number of variables, including the viability of
the construction industry. Further, debt financing could lead to a diversion of
cash flow to satisfy debt-servicing obligations and create restrictions on
business operations. If we are unable to raise additional funds, it would have a
material adverse effect upon our operations.

ADVERSE ECONOMIC CONDITIONS MAY NEGATIVELY IMPACT OUR BUSINESS. In an
economic slowdown or during periods of rising interest rates, new construction
typically declines, which means the demand for our services will decline. The
construction industry, in general, may be adversely affected by slowdown in
regional demand for new commercial and residential construction. If demand for
new construction declines in the region in which we do business, the demand for
our site reclamation services may decline. It is difficult, if not impossible,
to predict the demand for reclaiming and stabilizing land in preparation for
construction. Depressed demand for new construction would have a material
adverse effect on our operations.

WE FACE COMPETITION FROM LARGER COMPANIES IN OUR BUSINESS. We will be
competing against other construction site reclamation and excavation companies
such as Hayward Baker, Inc. in California and Case Foundation Company in
Arizona, some of which sell their services globally, and some of these providers
will have considerably greater resources and abilities than we do. These
competitors may have greater marketing and sales capacity, established
distribution networks, significant goodwill and global name recognition. In
addition, these companies may have a greater ability to continue operations
during periods of low construction demand. Our larger competitors may be able to
absorb the burden of present and future federal, state, local and other laws and
regulations more easily than we can, which could adversely affect our
competitive position. In addition, because we have fewer financial and human
resources than many companies in our industry, we may be at a competitive
disadvantage.

WE ARE DEPENDENT ON THE EFFORTS OF MANAGEMENT WHICH IS ESSENTIAL TO OUR
SUCCESS. Our success will depend to a significant degree upon the involvement of
our management, who will be in charge of strategic planning and operations. The
officers, directors, management and advisors have experience in construction
site reclamation and preparation, which will be essential to our success.
However, we may need to attract and retain additional talented individuals in
order to carry out our business objectives. The competition for such persons
could be intense and there are no assurances that these individuals will be
available to us.

WE ARE ECONOMICALLY DEPENDENT ON ALANTIC CONTRACTORS LTD. Due to our
limited resources and size, we currently subcontract all land stabilization
contracts to our one supplier - Alantic Contractors Ltd. Our ability to continue
viable operations is dependent upon these services until we can grow our
business and develop the ability to deliver the services internally. See
"BUSINESS - Material Contracts."

ANY CHANGE TO GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A
NEGATIVE IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY. The laws,
regulations, policies or current administrative practices of any government
body, organization or regulatory agency in the United States or any other
jurisdiction, may be changed, applied or interpreted in a manner which will
fundamentally alter our ability to carry on business. The actions, policies or
regulations, or changes thereto, of any government body or regulatory agency, or
other special interest groups, may have a detrimental effect on us. Any or all
of these situations may have a negative impact on our ability to operate and/or
our profitably. As many of our planned activities will be subject to federal,
state and local regulation, and as these rules are subject to constant change or
amendment, there can be no assurance that our operations will not be adversely
affected by new or different government regulations, laws or court decisions
applicable to our operations.

A DECLINE IN THE PRICE OF OUR COMMON STOCK COULD AFFECT OUR ABILITY TO
RAISE FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR OPERATIONS. As of the
date of this Annual Report, our common stock has not commenced trading on the
OTC Bulletin Board. We anticipate that by approximately December 31, 2006 our
common stock will have commenced trading on the OTC Bulletin Board. Once trading
commences, a decline in the price of our common stock could result in a
reduction in the liquidity of our common stock and a reduction in our ability to
raise additional capital for our operations. Because our operations to date have
been principally financed through the sale of equity securities, a decline in
the price of our common stock could have an adverse effect upon our liquidity
and our continued operations. A reduction in our ability to raise equity capital
in the future would have a material adverse effect upon our business plan and
operations, including our ability to continue our current operations. If our
stock price declines, we may not be able to raise additional capital or generate
funds from operations sufficient to meet our obligations.

THE POTENTIAL PROFITABILITY IN RECLAMATION AND STABILIZATION OF LAND IN
PREPARATION FOR CONSTRUCTION DEPENDS UPON FACTORS BEYOND OUR CONTROL. The
potential profitability of our business is dependent upon many factors beyond
our control. For instance, markets for geotechnical construction technology may
be unpredictable, highly volatile, potentially subject to certain governmental
controls, or any combination of these and other factors, and respond to changes
in domestic, international, political, social, and economic environments.
Additionally, due to worldwide economic uncertainty, the availability and cost
of funds for operational expenses have become increasingly difficult, if not

impossible, to project. These and other changes and events may materially affect
our financial performance.

OUR RESULTS OF OPERATIONS MAY BE DEPENDENT UPON MARKET DEMAND FOR
GEOTECHNICAL CONSTRUCTION TECHNOLOGY, WHICH MAY FLUCTUATE WIDELY AND ARE BEYOND
OUR CONTROL. Our revenue, profitability, and cash flow may depend upon the
prices and demand for overall construction activity. The construction markets
are very volatile and even relatively modest drops may significantly affect our
financial results and impede our growth. Construction demand may also affect the
amount of future cash flow available for capital expenditures and may affect our
ability to raise additional capital.

Factors that can cause potential profitability fluctuation include: (i)
the level of construction demand; (ii) weather conditions; (iii) domestic and
foreign governmental regulations; (iv) price and availability of alternative
resources for stabilization of lands; (v) technical advances affecting
stabilization of land; (vi) political conditions; and (vii) the overall domestic
and global economic environments.

WE MAY BE UNABLE TO RETAIN KEY EMPLOYEES OR CONSULTANTS OR RECRUIT
ADDITIONAL QUALIFIED PERSONNEL. Our extremely limited personnel means that we
would be required to spend significant sums of money to locate and train new
employees in the event any of our employees resign or terminate their employment
with us for any reason. Due to our limited operating history and financial
resources, we are entirely dependent on the continued service of Marcus Johnson,
Chief Executive Officer and D. Bruce Horton, Chief Financial Officer. Further,
we do not have key man life insurance on either of these individuals. We may not
have the financial resources to hire a replacement if one or both of our
officers were to die. The loss of service of either of these employees could
therefore significantly and adversely affect our operations.

OUR OFFICERS AND DIRECTORS MAY BE SUBJECT TO CONFLICTS OF INTEREST. Our
officers and directors serve only part time and are subject to conflicts of
interest. Each of our executive officers and directors serves only on a part
time basis. Each devotes part of his working time to other business endeavors,
much time to devote to our affairs, as well as what business opportunities
should be presented to the company. Such conflicts include deciding how much
time to devote to our affairs, as well as what business opportunities should be
presented to the company. Because of these relationships, our officers and
directors will be subject to conflicts of interest.

RISKS RELATED TO OUR COMMON STOCK

SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE
PUBLIC MARKET BY CERTAIN STOCKHOLDERS MAY RESULT IN SIGNIFICANT DOWNWARD
PRESSURE ON THE PRICE OF OUR COMMON STOCK AND COULD AFFECT YOUR ABILITY TO
REALIZE THE CURRENT TRADING PRICE OF OUR COMMON STOCK. Sales of a substantial
number of shares of our common stock in the public market by certain
stockholders could cause a reduction in the market price of our common stock. As
of the date of this Annual Report, we have 16,800,000 shares of common stock
issued and outstanding.

Of the total number of issued and outstanding shares of common stock,
certain stockholders are able to resell up to an aggregate of 11,025,000 shares
of our common stock (262,500 pre-Forward Stock Split shares) pursuant to a
registration statement declared effective on approximately November 18, 2005. As
a result of the registration statement: (i) 4,200,000 shares of common stock

(100,000 pre-Forward Stock Split shares) were registered to be issued upon
subscription at a purchase price of $1.00 per share; and (ii) 6,825,000 shares
of common stock (162,500 pre-Forward Stock Split shares) held by existing
shareholders of record were registered, which, if resold, would have an adverse
effect on the price of our common stock. To the extent stockholders resold the
shares of common stock issued to them (subject to applicable securities law
restrictions), the price of our common stock may decrease due to the additional
shares of common stock in the market.

As of the date of this Annual Report, there are no outstanding shares
of our common stock that are restricted securities as that term is defined in
Rule 144 under the Securities Act of 1933, as amended (the "Securities Act").
Although the Securities Act and Rule 144 place certain prohibitions on the sale
of restricted securities, restricted securities may be sold into the public
market under certain conditions. There are no stock options or warrants
outstanding.

Any significant downward pressure on the price of our common stock as
the selling stockholders sell their shares of our common stock could encourage
short sales by the selling stockholders or others. Any such short sales could
place further downward pressure on the price of our common stock.

WHEN TRADING COMMENCES, THE TRADING PRICE OF OUR COMMON STOCK ON THE
OTC BULLETIN BOARD MAY FLUCTUATE SIGNIFICANTLY AND STOCKHOLDERS MAY HAVE
DIFFICULTY RESELLING THEIR SHARES. As of the date of this Annual Report, our
common stock has not commenced trading on the OTC Bulletin Board. Upon
commencement of trading, in addition to volatility associated with Bulletin
Board securities in general, the value of your investment could decline due to
the impact of any of the following factors upon the market price of our common
stock: (i) changes in the world wide demand for geotechnical construction
technology; (ii) disappointing results from our operations of site
identification and reclamation efforts; (iii) failure to meet our revenue or
profit goals or operating budget; (iv) decline in demand for our common stock;
(v) downward revisions in securities analysts' estimates or changes in general
market conditions; (vi) technological innovations by competitors or in competing
technologies; (vii) lack of funding generated for operations; (viii) investor
perception of our industry or our prospects; and (ix) general economic trends.

In addition, stock markets have experienced price and volume
fluctuations and the market prices of securities have been highly volatile.
These fluctuations are often unrelated to operating performance and may
adversely affect the market price of our common stock. As a result, investors
may be unable to sell their shares at a fair price and you may lose all or part
of your investment.

ADDITIONAL ISSUANCES OF EQUITY SECURITIES MAY RESULT IN DILUTION TO OUR
EXISTING STOCKHOLDERS. Our Articles of Incorporation authorize the issuance of
50,000,000 shares of common stock. The Board of Directors has the authority to
issue additional shares of our capital stock to provide additional financing in
the future and the issuance of any such shares may result in a reduction of the
book value or market price of the outstanding shares of our common stock. If we
do issue any such additional shares, such issuance also will cause a reduction
in the proportionate ownership and voting power of all other stockholders. As a
result of such dilution, if you acquire shares of our common stock, your
proportionate ownership interest and voting power could be decreased. Further,
any such issuances could result in a change of control.

OUR COMMON STOCK WILL BE CLASSIFIED AS A "PENNY STOCK" UNDER SEC RULES
WHICH LIMITS THE MARKET FOR OUR COMMON STOCK. Because our stock is not currently
traded on a stock exchange or on the NASDAQ National Market or the NASDAQ Small
Cap Market, and because the market price of the common stock will be less than
$5 per share, the common stock will be classified as a "penny stock." SEC Rule
15g-9 under the Exchange Act imposes additional sales practice requirements on
broker-dealers that recommend the purchase or sale of penny stocks to persons
other than those who qualify as an "established customer" or an "accredited
investor." This includes the requirement that a broker-dealer must make a
determination that investments in penny stocks are suitable for the customer and
must make special disclosures to the customers concerning the risk of penny
stocks. Many broker-dealers decline to participate in penny stock transactions
because of the extra requirements imposed on penny stock transactions.
Application of the penny stock rules to our common stock will reduce the market
liquidity of our shares, which in turn will affect the ability of holders of our
common stock to resell the shares they purchase, and they may not be able to
resell at prices at or above the prices they paid.

LIMITED LIABILITY OF OFFICERS AND DIRECTORS LIMITS INVESTORS' RIGHTS.
We have adopted provisions in our Articles of Incorporation and Bylaws which
limit the liability of our officers and directors and provide for
indemnification by us of our officers and directors to the full extent permitted
by Nevada corporate law. Our articles generally provide that our officers and
directors will have no personal liability to us or our stockholders for monetary
damages for breaches of their fiduciary duties as directors, except for breaches
of their duties of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, acts involving unlawful
payment of dividends or unlawful stock purchases or redemptions, or any
transaction from which a director derives an improper personal benefit. These
provisions substantially limit the shareholders' ability to hold officers and
directors liable for breaches of fiduciary duty, and may require us to indemnify
our officers and directors.

Insofar as indemnification for liability arising under the Securities
Act may be permitted to directors, officers and controlling persons of a company
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission this indemnification is
against public policy and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by one of our directors, officers or controlling
persons in the successful defense of any action, suit or proceeding) is asserted
by a director, officer or controlling person in connection with the securities
being offered, we will, unless in the opinion of counsel, the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether indemnification is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of that issue.

ITEM 2. DESCRIPTION OF PROPERTIES

We lease approximately 400 square feet for our principal executive and
administrative office space located at 1081 Kent Street, White Rock, British
Columbia, Canada V4B 4T2. We currently intend to relocate our principal offices
in 2,0000 square feet at another location in the State of California or
elsewhere in the western United States. Consideration in selecting an
appropriate location include proximity to our clientele and construction sites
and the cost of suitable industrial facilities.

ITEM 3. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving us or our properties. As of
the date of this Annual Report, no director, officer or affiliate is (i) a party
adverse to us in any legal proceeding, or (ii) has an adverse interest to us in
any legal proceedings. Management is not aware of any other legal proceedings
pending or that have been threatened against us or our properties.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During fiscal year ended May 31, 2006, no matters were submitted to our
stockholders for approval.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR COMMON EQUITY

As of the date of this Annual Report, shares of our common stock do not
trade on the OTC Bulletin Board or any other exchange. When trading commences,
the market for our common stock will be limited and can be volatile.

As of August 15, 2006, we had 52 shareholders of record.

DIVIDEND POLICY

No dividends have ever been declared by the Board of Directors on our
common stock. Our losses do not currently indicate the ability to pay any cash
dividends, and we do not indicate the intention of paying cash dividends either
on our common stock in the foreseeable future.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS

We have not adopted any equity compensation plan.

RECENT SALES OF UNREGISTERED SECURITIES

As of the date of this Annual Report and during fiscal year ended May
31, 2006, to provide capital, we sold stock in private placement offerings,
issued stock in exchange for our debts or pursuant to contractual agreements as
set forth below.

PRIVATE PLACEMENT OFFERING

On December 8, 2005, we completed a private placement offering under
Regulation D and Regulation S of the Securities Act of 1933 Securities Act, as
amended (the "Securities Act"). Pursuant to the terms of the private placement,
we sold 4,200,000 pre-Forward Stock Split shares of our restricted common stock
(17,640,000 post-Forward Stock Split shares) at a subscription price of $0.238
per share for aggregate proceeds of $100,000. Therefore, we issued 4,200,000
Pre-Forward Stock Split shares of our restricted common stock to 52 investors in
reliance on Regulation D and Regulation S under the Securities Act. The per
share price of the offering was arbitrarily determined by our Board of Directors
based upon analysis of certain factors including, but not limited to, stage of
development, industry status, investment climate, perceived investment risks,
our assets, and net estimated worth. We issued shares to investors who were

either a U.S. accredited resident or a non-U.S. resident. The investors executed
subscription agreements and acknowledged that the securities to be issued have
not been registered under the Securities Act, that they understood the economic
risk of an investment in the securities, and that they had the opportunity to
ask questions of and receive answers from our management concerning any and all
matters related to acquisition of the securities.

Of the 4,200,000 shares sold in the offering, 162,500 pre-Forward Stock
Split shares have been registered on Form SB-2 under the Securities Act with the
Securities and Exchange Commission (see section immediately below).

SHARES ELIGIBLE FOR FUTURE SALE

During fiscal year ended December 31, 2005, we filed a registration
statement on Form SB-2 under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission (the "Registration Statement"). The
Securities and Exchange Commission declared the Registration Statement effective
on February 16, 2006, pursuant to which 100,000 pre-Forward Stock Split shares
to be issued were registered and certain purchasers of shares, other than
affiliates, may resell their shares of common stock held of record aggregating
162,500 pre-Forward Stock Split shares immediately. A current shareholder who is
an "affiliate" of us, defined in Rule 144 as a person who directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, us, will be required to comply with the resale
limitations of Rule 144. Sales by affiliates will be subject to the volume and
other limitations of Rule 144, including certain restrictions regarding the
manner of sale, notice requirements, and the availability of current public
information about us. The volume limitations generally permit an affiliate to
sell, within any three month period, a number of shares that does not exceed the
greater of one percent of the outstanding shares of common stock or the average
weekly trading volume during the four calendar weeks preceding his sale. A
person who ceases to be an affiliate at least three months before the sale of
restricted securities beneficially owned for at least two years may sell the
restricted securities under Rule 144 without regard to any of the Rule 144
limitations.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The summarized financial data set forth in the table below is derived
from and should be read in conjunction with our audited financial statements for
the period from inception (April 5, 2004) to May 31, 2006 and fiscal year ended
May 31, 2006, including the notes to those financial statements which are
included in this Annual Report.

______________________________________________________________________
For the Period from
Inception (April 5, 2004)
to May 31, 2006
______________________________________________________________________

Revenues $ 46,974
______________________________________________________________________
Net Loss ($136,754)
______________________________________________________________________
For the Year Ended May
31, 2006 (audited)
______________________________________________________________________

Revenue $ -0-
______________________________________________________________________
Direct Costs -0-
______________________________________________________________________
Gross Profit -0-
______________________________________________________________________
Office and general expenses 14,244
______________________________________________________________________

Consulting Fees 8,161
______________________________________________________________________
Professional Fees 42,676
______________________________________________________________________
Net Loss for the Year ($ 65,081)
______________________________________________________________________
As of May 31, 2006
(audited)
______________________________________________________________________

Working Capital $ 37,413
______________________________________________________________________
Total Assets 73,383
______________________________________________________________________
Total Number of Shares of Common Stock
Outstanding 16,800,000
______________________________________________________________________
Deficit (136,754)
______________________________________________________________________
Total Stockholders Equity $ 37,413
______________________________________________________________________

MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATION

FOR FISCAL YEAR ENDED MAY 31, 2006 COMPARED TO FISCAL YEAR ENDED MAY
31, 2005

Our net loss during fiscal year ended May 31, 2006 was approximately
($65,081) compared to ($66,246) for fiscal year ended May 31, 2005 (a decrease
of $1,165).

During fiscal year ended May 31, 2006, we did not generate any revenue
compared to $46,974 in revenue generated during fiscal year ended May 31, 2005.
We are in the development stage and, therefore, have not commenced producing
significant consistent revenue. During fiscal year ended May 31, 2005, we earned
$46,974 of revenue from site reclamation and incurred $56,481 of costs directly
relating to that revenue resulting in a gross loss of ($9,507). As we begin to
implement our business plan, we expect the number of site reclamation jobs and
revenue to increase and direct costs as a percentage of that revenue to fall
over the next twelve months.

During fiscal year ended May 31, 2006, we incurred general and
administrative expenses of approximately $65,081 compared to general and
administrative expenses of $56,739 during fiscal year ended May 31, 2005 (an
increase of $8,342). The general and administrative expenses incurred during
fiscal year ended May 31, 2006 consisted of: (i) $42,676 (2005: $20,574) in
professional fees; (ii) $14,244 (2005: $18,533) as office and general expenses;
and (iii) $8,161 (2005: $17,632) as consulting fees. The slight increase in
general and administrative expenses incurred during fiscal year ended May 31,
2006 compared to fiscal year ended May 31, 2005 resulted primarily from the
increase in professional fees relating to investigating the opportunities in the
construction site reclamation and stabilization business in the United States
and to legal fees associated with preparation of the Registration Statement.
General and administrative expenses generally include corporate overhead,
financial and administrative contracted services, marketing, and consulting
costs.

As discussed above, the slight decrease in net loss during fiscal year
ended May 31, 2006 compared to fiscal year ended May 31, 2005 is attributable
primarily to the operating gross loss realized during fiscal year ended May 31,
2005. Our net loss during fiscal year ended May 31, 2006 was ($65,081) or
($0.00) per share compared to a net loss of ($66,246) or ($0.00) per share for
fiscal year ended May 31, 2005. The weighted average number of shares

outstanding was 14,590,685 at May 31, 2006 compared to 9,178,134 at May 31,
2005.

LIQUIDITY AND CAPITAL RESOURCES

Our financial statements have been prepared assuming that we will
continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of
liabilities that might be necessary should we be unable to continue in
operation.

As at fiscal year ended May 31, 2006, our current assets were $73,383
and our current liabilities were $35,970, resulting in a working capital surplus
of $37,413. As at fiscal year ended May 31, 2006, our total assets were
comprised of current assets of $73,383 in cash. As at fiscal year ended May 31,
2006, our total liabilities were comprised of current liabilities of: (i)
$19,171 in accounts payable and accrued liabilities; and (ii) $16,799 in amounts
due to related parties. See " - Material Commitments."

Stockholders' equity increased from $2,494 at May 31, 2005 to $37,413
at May 31, 2006.

We have not generated positive cash flows from operating activities.
For fiscal year ended May 31, 2006, net cash flow used in operating activities
was ($90,248) compared to net cash flow from operating activities of $591 for
fiscal year ended May 31, 2005. Net cash flow used in operating activities
during fiscal year ended May 31, 2006 consisted primarily of a net loss of
($65,081) adjusted by ($40,827) to reconcile accounts payable and accrued
liabilities.

During fiscal year ended May 31, 2006, net cash flow provided by
financing activities was $99,927 compared to net cash flow from financing
activities of $19,000 for fiscal year ended May 31, 2005. Net cash flow from
financing activities during fiscal year ended May 31, 2006 pertained primarily
to $100,000 received as proceeds from the sale of our shares of common stock.

We expect that working capital requirements will continue to be funded
through a combination of our existing funds, cash flow from operations and
further issuances of securities. Our working capital requirements are expected
to increase in line with the growth of our business. We believe the residential
and commercial real estate market in the United States is presently active so we
expect the demand for our services will remain stable or increase in the
foreseeable future.

PLAN OF OPERATION AND FUNDING

On December 8, 2005, we closed our private placement offering pursuant
to which we issued an aggregate of 4,200,000 pre-Forward Stock Split shares of
common stock at $0.238 per share for gross proceeds of $100,000. Existing
working capital, further advances and possible debt instruments, anticipated
warrant exercises, further private placements, and anticipated cash flow are
expected to be adequate to fund our operations over the next six months. We have
no lines of credit or other bank financing arrangements. Generally, we have
financed operations to date through the proceeds of the private placement of
equity and debt securities. In connection with our business plan, management
anticipates that administrative expenses will decrease as a percentage of
revenue as our revenue increases over the next twelve months.

Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations.

The reports of the independent registered public accounting firms that
accompanies our May 31, 2006 and May 31, 2005 financial statements contain an
explanatory paragraph expressing substantial doubt about our ability to continue
as a going concern. The financial statements have been prepared "assuming that
we will continue as a going concern," which contemplates that we will realize
our assets and satisfy our liabilities and commitments in the ordinary course of
business.

MATERIAL COMMITMENTS

As of the date of this Annual Report, we do not have any significant
material commitments for fiscal year 2006/2007.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next
twelve months.

SUMMARY OF RECENT ACCOUNTING PRONOUNCEMENTS

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140",
to simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", to permit fair value re-measurement for any
hybrid financial instrument with an embedded derivative that otherwise would
require bifurcation, provided that the whole instrument is accounted for on a
fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
Impairment or Disposal of Long-Lived Assets", to allow a qualifying
special-purpose entity to hold a derivative financial instrument that pertains
to a beneficial interest other than another derivative financial instrument.
SFAS No. 155 applies to all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with earlier application allowed. This standard is not expected to have a
significant effect on our future reported financial position or results of
operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing
of Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. This adoption of this statement is not
expected to have a significant effect on our future reported financial position
or results of operations.

ITEM 7. FINANCIAL STATEMENTS

Revelstoke Industries, Inc.
(A Development Stage Company)

FINANCIAL STATEMENTS

May 31, 2006

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BALANCE SHEETS

STATEMENTS OF OPERATIONS

STATEMENT OF STOCKHOLDERS' EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

DALE MATHESON
CARR-HILTON LABONTE
CHARTERED ACCOUNTANTS
Partnership of:

Robert J. Burkart, Inc. James F. Carr-Hilton, Ltd.
Alvin F. Dale, Ltd. Peter J. Donaldson, Inc.
Wilfred A. Jacobson, Inc. Reginald J. LaBonte, Ltd.
Robert J. Matheson, Inc. Rakesh I. Patel, Inc.
Fraser G. Ross, Ltd. Brian A. Shaw, Inc.
Anthony L. Soda, Inc.
________________________________________________________________________________

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

________________________________________________________________________________

To the Stockholders and Board of Directors of Revelstoke Industries, Inc.

We have audited the balance sheet of Revelstoke Industries, Inc. as at May 31,
2006 and the statements of operations, stockholders' equity and cash flows for
the year then ended and for the cumulative period from April 5, 2004 (date of
inception) to May 31, 2006. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The Company's financial statements at
May 31, 2005 and for the year then ended, and for the period April 5, 2004 (date
of inception) to May 31, 2005 were audited by other auditors whose report dated
July 14, 2005 included an explanatory paragraph regarding the Company's ability
to continue as a going concern. The financial statements for the period from
April 5, 2004 (date of inception) to May 31, 2005 reflect a total net loss of
$71,673 of the related cumulative totals. The other auditors' reports have been
furnished to us, and our opinion, insofar as it relates to amounts included for
such prior period, is based solely on the reports of such other auditors.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our 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 also 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
audit provide a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at May 31, 2006 and the
results of its operations and its cash flows and the changes in stockholders'
equity for the year then ended and for the period from April 5, 2004 (date of
inception) to May 31, 2006 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, to date the Company has reported net losses since
inception from operations and requires additional funds to meet its obligations
and fund the costs of its operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management plans in
this regard are described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

"DALE MATHESON CARR-HILTON LABONTE"

CHARTERED ACCOUNTANTS
Vancouver, B.C.
August 31, 2006

A MEMBER OF MGI INTERNATIONAL, A WORLDWIDE NETWORK OF INDEPENDENT ACCOUNTANTS
AND BUSINESS ADVISORS

VANCOUVER Suite 1500 - 1140 West Pender Street, Vancouver, B.C., Canada V6E 4G1,
Tel: 604 687 4747 * Fax: 604 689 2778 - Main Reception
Suite 1700 - 1140 West Pender Street, Vancouver, B.C., Canada V6E 4G1,
Tel: 604 687 4747 * Fax: 604 687 4216

CHARTERED ACCOUNTANTS 1100 - 1177 West Hastings Street
MacKay LLP mackay.ca
Vancouver, BC 46E 4T5
Tel: 604-687-4511
Fax: 604-687-5805
Toll Free: 1-800-351-0426
www.MacKayLLP.ca

Report of Registered Public Accounting Firm

To the Shareholders of
Revelstoke Industries, Inc.
(a Development Stage Enterprise)

We have audited the balance sheets of Revelstoke Industries, Inc., (a
development stage enterprise) as at May 31, 2005 and May 31, 2004 and the
statements of operations and deficit, stockholders' equity, and cash flows for
the year ended May 31, 2005 and for the periods from inception on April 5, 2004
to May 31, 2004 and May 31, 2005. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the generally accepted auditing
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material misstatements.
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.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at May 31, 2005 and May 31,
2004 and the results of its operations and its cash flows for the year ended May
31, 2005 and the periods from inception on April 5, 2004 through May 31, 2004
and May 31, 2005, in accordance with generally accepted accounting principles in
the United States of America.

The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company is in the development stage, and has
no permanently established source of revenue and is dependent on its ability to
raise capital from shareholders or other sources to sustain operations. These
factors, along with other matters as set forth in Note 1, raise substantial
doubt that the Company will be able to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

Vancouver, Canada. "MacKay LLP"
July 14, 2005 Chartered Accountants

REVELSTOKE INDUSTRIES, INC.
(A Development Stage Company)

BALANCE SHEETS

May 31, May 31,
2006 2005
__________________________________________________________________________________________________

ASSETS

CURRENT ASSETS
Cash $ 73,383 $ 63,704
Due from related party (Note 4) - 7,285
Prepaid expenses - 8,375
__________________________________________________________________________________________________

$ 73,383 $ 79,364
==================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 19,171 $ 17,000
Due to related parties (Note 4) 16,799 59,870
__________________________________________________________________________________________________
35,970 76,870
__________________________________________________________________________________________________

CONTINGENCY AND COMMITMENTS (Notes 1 and 6)

STOCKHOLDERS' EQUITY
Capital stock (Note 3)
Authorized
50,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
16,800,000 shares of common stock (May 31, 2005 - 12,600,000) 16,800 300
Additional paid-in capital 157,367 73,867
Deficit accumulated during the development stage (136,754) (71,673)
__________________________________________________________________________________________________
37,413 2,494
__________________________________________________________________________________________________
$ 73,383 $ 79,364
==================================================================================================

The accompanying notes are an integral part of these financial statements

REVELSTOKE INDUSTRIES, INC.
(A Development Stage Company)

STATEMENTS OF OPERATIONS

Cumulative
results from
April 5, 2004
Year ended Year ended (inception) to
May 31, 2006 May 31, 2005 May 31, 2006
__________________________________________________________________________________________________

REVENUE $ - $ 46,974 $ 46,974
__________________________________________________________________________________________________

DIRECT COSTS - 56,481 56,481
__________________________________________________________________________________________________

GROSS MARGIN (LOSS) - (9,507) (9,507)
__________________________________________________________________________________________________

GENERAL AND ADMINISTRATIVE EXPENSES
Office and general 14,244 18,533 32,904
Consulting fees 8,161 17,632 29,093
Professional fees 42,676 20,574 65,250
__________________________________________________________________________________________________
(65,081) (56,739) (127,247)
__________________________________________________________________________________________________

NET LOSS $ (65,081) $(66,246) $(136,754)
==================================================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.00) $ (0.00)

===========================================================================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING -BASIC AND DILUTED 14,590,685 9,178,134
===========================================================================

The accompanying notes are an integral part of these financial statements

REVESTOKE INDUSTRIES, INC.
(A Development Stage Company)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE PERIOD FROM APRIL 5, 2004 (INCEPTION) TO MAY 31, 2006

Deficit
Common Stock Accumulated
_______________________ Additional During the
Number of Paid-in Development
shares Amount Capital Stage Total
_________________________________________________________________________________________________________

Common stock issued for cash at
$0.0016 per share
April 5, 2004 5,775,000 $ 138 $ 9,029 $ - $ 9,167

Net loss for the period - - - (5,427) (5,427)
_________________________________________________________________________________________________________

Balance, May 31, 2004 5,775,000 138 9,029 (5,427) 3,740

Common stock issued for cash at
$0.009 per share
November 30, 2004 6,825,000 162 64,838 - 65,000

Net loss for the period - - - (66,246) (66,246)
_________________________________________________________________________________________________________

Balance, May 31, 2005 12,600,000 300 73,867 (71,673) 2,494

Common stock issued for cash at
$0.238 per share
December 8, 2005 4,200,000 100 99,900 - 100,000

Reclassification for stock split,
May 1, 2006 (Note 3) 16,400 (16,400) - - -
Net loss - - - (65,081) (65,081)
_________________________________________________________________________________________________________

Balance, May 31, 2006 16,800,000 $ 16,800 $157,367 $ 136,754 $ 37,413
=========================================================================================================

The accompanying notes are an integral part of these financial statements

REVELSTOKE INDUSTRIES, INC.
(A Development Stage Company)

STATEMENTS OF CASH FLOWS

Cumulative
results from
April 5, 2004
Year ended Year ended (inception) to
May 31, 2006 May 31, 2005 May 31, 2006

______________________________________________________________________________________________________________

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(65,081) $(66,246) $(136,754)
Adjustments to reconcile net loss to net cash used in
operating activities:
Due from related party 7,285 (7,285) 16,799
Prepaid expenses 8,375 2,625 -
Accounts payable and accrued liabilities (40,827) 71,497 19,171
______________________________________________________________________________________________________________

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (90,248) 591 (100,784)
______________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
Promissory notes repaid - (45,000) -
Proceeds on sale of common stock 100,000 65,000 174,167
Repayments to related parties (73) (1,000) -
______________________________________________________________________________________________________________

NET CASH PROVIDED BY FINANCING ACTIVITIES 99,927 19,000 174,167
______________________________________________________________________________________________________________

NET INCREASE IN CASH 9,679 19,591 73,383

CASH, BEGINNING 63,704 44,113 -
______________________________________________________________________________________________________________

CASH, ENDING $ 73,383 $ 63,704 $ 73,383
==============================================================================================================

Supplemental disclosures with respect to cash flows:

Interest paid $ - $ - $ -
==============================================================================================================

Income taxes paid $ - $ - $ -
==============================================================================================================

The accompanying notes are an integral part of these financial statements

REVELSTOKE, INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2006
________________________________________________________________________________

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________

The Company was incorporated in the State of Nevada on April 5, 2004. The
Company is engaged in the business of reclaiming and stabilizing land in
preparation for construction in the United States of America. The Company has
elected a fiscal year of May 31. On May 5, 2006; the Company completed a forward
stock split by the issuance of 42 new shares for each 1 outstanding share of the
Company's common stock.

GOING CONCERN
To date the Company has generated minimal revenues from its business operations
and has incurred operating losses since inception of $136,754. The Company
requires additional funding to meet its ongoing obligations and operating
losses. The ability of the Company to continue as a going concern is dependant
on raising capital to fund its initial business plan and ultimately to attain
profitable operations. Accordingly, these factors raise substantial doubt as to
the Company's ability to continue as a going concern. The Company intends to
continue to fund its initial operations by way of private placements and
advances from related parties as may be required.

COMPARATIVE FIGURES
Certain comparative figures have been reclassified in order to conform to the
current year's financial statement presentation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________

BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with generally accepted accounting principles in the
United States of America.

USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of expenses during the period. Accordingly, actual results
could differ from those estimates.

INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances. Deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the date of enactment or
substantive enactment. As at May 31, 2006 the Company had net operating loss
carry forwards. However, due to the uncertainty of realization the Company has
provided a full valuation allowance for the deferred tax assets resulting from
these loss carryforwards.

NET LOSS PER SHARE
The Company computes loss per share in accordance with SFAS No. 128, "Earnings
per Share" which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all dilutive potential common shares outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive.

FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated to their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date. Revenue
and expenses are translated at average rates of exchange during the period.
Related translation adjustments are reported as a separate component of
stockholders' equity, whereas gains or losses resulting from foreign currency
transactions are included in results of operations.

REVELSTOKE, INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2006
________________________________________________________________________________

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
________________________________________________________________________________

REVENUE RECOGNITION
The Company derives its revenues from land stablization contracts and recognizes
those revenues on the percentage of completion basis. Revenue is measured by the
Proportion of construction costs incurred to date as a percentage of estimated
total construction costs. The Company records provisions for estimated losses on
uncompleted contracts in the period in which those losses are determined.

STOCK-BASED COMPENSATION
On March 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS No.
123R), Share-Based Payment, which addresses the accounting for stock-based
payment transactions in which an enterprise receives employee services in
exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprise's equity instruments or that may
be settled by the issuance of such equity instruments. In January 2005, the
Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB)
No. 107, which provides supplemental implementation guidance for SFAS No. 123R.
SFAS No. 123R eliminates the ability to account for stock-based compensation
transactions using the intrinsic value method under Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees, and instead
generally requires that such transactions be accounted for using a
fair-value-based method. The Company uses the Black-Scholes-Merton ("BSM")
option-pricing model to determine the fair-value of stock-based awards under
SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS
No. 123, Accounting for Stock-Based Compensation. The Company has elected the
modified prospective transition method as permitted by SFAS No. 123R and
accordingly prior periods have not been restated to reflect the impact of SFAS
No. 123R. The modified prospective transition method requires that stock-based
compensation expense be recorded for all new and unvested stock options,
restricted stock, restricted stock units, and employee stock purchase plan
shares that are ultimately expected to vest as the requisite service is rendered
beginning on March 1, 2006, the first day of the Company's second quarter in
fiscal 2007 . Stock-based compensation expense for awards granted prior to March
1, 2006 is based on the grant date fair-value as determined under the pro forma
provisions of SFAS No. 123.

Prior to the adoption of SFAS No. 123R, the Company measured compensation
expense for its employee stock-based compensation plans using the intrinsic
value method prescribed by APB Opinion No. 25. The Company applied the
disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure, as if the fair-value-based
method had been applied in measuring compensation expense. Under APB Opinion No.
25, when the exercise price of the Company's employee stock options was equal to
the market price of the underlying stock on the date of the grant, no
compensation expense was recognized.

The Company has not adopted a stock option plan and has not granted any stock
options. Accordingly, no stock-based compensation has been recorded to date.

FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of SFAS No. 107, the Company has determined
the estimated fair value of financial instruments using available market
information and appropriate valuation methodogies. The fair value of financial
instruments classified as current assets or liabilities approximate their
carrying value due to the short-term maturity of the instruments.

RECENT ACCOUNTING PRONOUNCEMENTS
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", to permit fair value re-measurement for any
hybrid financial instrument with an embedded derivative that otherwise would
require bifurcation, provided that the whole instrument is accounted for on a
fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
Impairment or Disposal of Long-Lived Assets", to allow a qualifying
special-purpose entity to hold a derivative financial instrument that pertains
to a beneficial interest other than another derivative financial instrument.
SFAS No. 155 applies to all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with earlier application allowed. This standard is not expected to have a
significant effect on the Company's future reported financial position or
results of operations.

REVELSTOKE, INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2006
________________________________________________________________________________

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
________________________________________________________________________________

RECENT ACCOUNTING PRONOUNCEMENTS (continued)
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. This adoption of this statement is not
expected to have a significant effect on the Company's future reported financial
position or results of operations.

NOTE 3 - STOCKHOLDERS' EQUITY
________________________________________________________________________________

The Company's capitalization is 50,000,000 common shares with a par value of
$0.001 per share.

On May 1, 2006, a majority of shareholders and the directors of the Company
approved a special resolution to undertake a forward stock split of the common
stock of the Company on a 42 new shares for 1 old share basis whereby 16,400,000
common shares were issued pro-rata to shareholders of the Company as of the
record date on May 1, 2006.

All references in these financial statements to number of common shares, price
per share and weighted average number of common shares outstanding prior to the
42:1 forward split have been adjusted to reflect these stock splits on a
retroactive basis, unless otherwise noted.

2004 SHARE TRANSACTIONS
On April 5, 2004 the Company completed private placements for 5,775,000 shares
of the Company's common stock at a price of $0.0016 per share, with net proceeds
to the Company of $9,167.

On November 30, 2004 the Company completed private placements for 6,825,000
shares of the Company's common stock at a price of $0.009 per share, with net
proceeds to the Company of $65,000.

2005 SHARE TRANSACTIONS
On December 8, 2005 the Company completed private placement for 4,200,000 shares
of the Company's common stock at a price of $0.238 per share, with net proceeds
to the Company of $100,000.

To May 31, 2006 the Company has not granted any stock options and has not
recorded any stock-based compensation.

REGISTRATION STATEMENT
Of the total number of issued and outstanding shares of common stock, certain
stockholders are able to resell up to an aggregate of 11,025,000 shares of the
Company's common stock (262,500 pre-Forward Stock Split shares) pursuant to an
SB-2 Registration Statement filed November 16, 2005. As a result of the
Registration Statement: (i) 4,200,000 shares of common stock (100,000
pre-Forward Stock Split shares) were registered to be issued upon subscription
at a purchase price of $1.00 per share; and (ii) 6,825,000 shares of common
stock (162,500 pre-Forward Stock Split shares) held by existing shareholders of
record were registered.

NOTE 4 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________

A company which is owned by a significant shareholder of the Company is owed
$16,799 as of May 31, 2006 ($59,797 - May 31, 2005) for consulting and
sub-contracts on land stabilization programs which were provided in the year
ended May 31, 2005. The amounts payable are unsecured, non-interest bearing with
no set terms of repayment.

REVELSTOKE, INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2006
________________________________________________________________________________

NOTE 4 - RELATED PARTY TRANSACTIONS (continued)
________________________________________________________________________________

As of May 31, 2005 a former director and shareholder of the Company was indebted
to the Company for $7,285 for prepaid travel expenses. The Company also owed him
$3 as of May 31, 2005 which was repaid in 2006. This advance was unsecured,
non-interest bearing and had no set terms of repayment. During the year ended
May 31, 2006 the advance was determined to be unrecoverable and was expensed as
office and general.

The above transactions have been in the normal course of operations and, in
management's opinion, undertaken with the same terms and conditions as
transactions with unrelated parties.

(Refer to Note 6.)

NOTE 5 - INCOME TAXES
________________________________________________________________________________

The Company has adopted FASB No. 109 for reporting purposes. As of May 31, 2006,
the Company had net operating loss carry forwards of approximately $137,000 that
may be available to reduce future years' taxable income. These carry forwards
will begin to expire, if not utilized, commencing in 2023. Future tax benefits
which may arise as a result of these losses have not been recognized in these
financial statements, as their realization is determined not likely to occur and
accordingly, the Company has recorded a valuation allowance for the deferred tax
asset relating to these tax loss carry forwards.

The Company reviews its valuation allowance requirements on an annual basis
based on projected future operations. When circumstances change and this causes
a change in management's judgment about the recoverability of future tax assets,
the impact of the change on the valuation allowance is generally reflected in
current income.

A reconciliation of income taxes at statutory rates with the Company's effective
tax rate is as follows:

May 31, 2006 May 31, 2005
$ $
_______________________________

Loss before income taxes (65,081) (66,246)
Federal income tax statutory rate 35.0% 35.0%
__________________________

Expected income tax recovery (22,778) (23,186)
Non-deductible items for tax purposes - 171
Unrecognized benefit of non-capital loss carry forwards 22,778 23,015
__________________________
Future income tax provision (recovery) - -
==========================

The significant components of the company's income
tax assets are as follows:

May 31, 2006 May 31, 2005
$ $
_______________________________
Future income tax assets:
Loss carry forwards 47,950 24,914
Valuation allowance (47,950) (24,914)
__________________________
Net future tax assets - -
==========================

As the criteria for recognizing deferred income tax assets have not been met due
to the uncertainty of realization, a valuation allowance of 100% has been
recorded for the current and prior periods.

REVELSTOKE, INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2006
________________________________________________________________________________

NOTE 6 - COMMITMENT
________________________________________________________________________________

On January 27, 2005, the Company entered into an agreement of understanding with
Alantic Contractors Ltd. (the "Alantic Agreement"), pursuant to which Alantic
will provide the Company with guidance in launching its operations within the
United States, advise on operational matters and assist in promoting the
Company's business through Alantic's existing associates. Alantic is a private
company engaged in the business of site preparation and reclamation by
reloading. An officer and director of Alantic is also a significant shareholder
of the Company.

The Company will compensate Alantic for their goods and services on a cost plus
basis, which entails payment for their costs plus a markup of 5% for overhead
and 10% for profit for a total of a 15% markup. The Company will also pay
Alantic a flat fee in the amount of $2,500 plus travel expenses to appraise the
viability of individual prospective projects. An officer and director of Alantic
is also a significant shareholder of the Company.

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

On August 6, 2006, our Board of Directors approved termination of
the services of MacKay LLP ("MacKay") as our principal independent accountant.
Termination of the services of MacKay was a result of communication between us
and MacKay regarding a mutual decision that it would be in our best interests to
effect a change in auditors in order to address the needs of a small business
development company. During our two most recent fiscal years and any subsequent
interim period preceding the resignation of MacKay, there were no disagreements
with MacKay which were not resolved on any matter concerning accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of MacKay,
would have caused MacKay to make reference to the subject matter of the
disagreements in connection with its reports. The report of MacKay for fiscal
years ended May 31, 2005 indicated the following:

"The accompanying financial statements referred to above have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company is in the

development stage, and has no permanently established source of revenue and is
dependent on its ability to raise capital from shareholders or other sources to
sustain operations. These factors, along with other matters as set forth in Note
1, raise substantial doubt that the Company will be able to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty."

Except as described in the immediately preceding paragraph, the report
of MacKay did not contain an adverse opinion or a disclaimer of opinion, and was
not qualified or modified as to uncertainty, audit scope, or accounting
principles.

On August 11, 2006, our Board of Directors approved and authorized the
engagement of the services of Dale Matheson Car-Hilton LaBonte, Chartered
Accountants ("DMCL"). DMCL's address is 1500-1140 West Pender Street, Vancouver,
British Columbia, Canada V6E 4G1.

We did not previously contact DMCL prior to its engagement regarding
application of accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on our
financial statements, and nether written nor oral advice was sought by us from
DMCL prior to its engagement regarding an important factor considered by us in
reaching a decision as to the accounting, auditing or financial reporting issue.

ITEM 8A. CONTROLS AND PROCEDURES

FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES

An evaluation was conducted under the supervision and with the
participation of our management, including Marcus Johnson, our Chief Executive
Officer ("CEO") and D. Bruce Horton, our Chief Financial Officer ("CFO"), of the
effectiveness of the design and operation of our disclosure controls and
procedures as of May 31, 2006. Based on that evaluation, Messrs. Johnson and
Horton concluded that our disclosure controls and procedures were effective as
of such date to ensure that information required to be disclosed in the reports
that we file or submit under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms. Such officers also confirm that there was no change in our internal
control over financial reporting during the year ended May 31, 2006 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

AUDIT COMMITTEE REPORT

As of the date of this Annual Report, we have not appointed members to
an audit committee and, therefore, the respective role of an audit committee has
been conducted by our Board of Directors. When established, the audit
committee's primary function will be to provide advice with respect to our
financial matters and to assist our Board of Directors in fulfilling its
oversight responsibilities regarding finance, accounting, tax and legal
compliance. The audit committee's primary duties and responsibilities will be
to: (i) serve as an independent and objective party to monitor our financial
reporting process and internal control system; (ii) review and appraise the
audit efforts of our independent accountants; (iii) evaluate our quarterly
financial performance as well as its compliance with laws and regulations; (iv)
oversee management's establishment and enforcement of financial policies and

business practices; and (v) provide an open avenue of communication among the
independent accountants, management and our Board of Directors.

Our Board of Directors has considered whether the regulatory provision
of non-audit services is compatible with maintaining the principal independent
accountant's independence.

ITEM 8B. OTHER INFORMATION

Not applicable.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of our directors hold office until the next annual general meeting
of the shareholders or until their successors are elected and qualified. Our
officers are appointed by our board of directors and hold office until their
earlier death, retirement, resignation or removal.

Our directors and executive officers, their ages, positions held are as
follows:

__________________________________________________________

Name Age Position with the Company
__________________________________________________________

Marcus Johnson 57 President/Chief Executive
Officer/Principal Executive
Officer and Director
__________________________________________________________

D. Bruce Horton 61 Secretary/Treasurer/Chief
Financial Officer/Principal
Accounting Officer
__________________________________________________________

Alan Sedgwick 53 Director
__________________________________________________________

Stephen Jewett 67 Director
__________________________________________________________

BUSINESS EXPERIENCE

The following is a brief account of the education and business
experience of each director, executive officer and key employee during at least
the past five years, indicating each person's principal occupation during the
period, and the name and principal business of the organization by which he or
she was employed.

MARCUS JOHNSON. Marcus Johnson has been our President/Chief Executive
Officer/Principal Executive Officer and a director since March 2006. For the
past ten years, Mr. Johnson has been active in management in both the private
and public sectors as a consultant to management with an emphasis on investor
relations and awareness. Mr. Johnson has performed consulting services for
Intergold Corporation, now known as Lexington Resources, Inc., and Vega-Atlantic
Corporation, now known as Transax International Limited. Mr. Johnson is a
professional architect and a member of the American Institute of Architects. Mr.
Johnson has been the professional architectural consultant of record on various
commercial projects and is a consultant to Exterior Research & Design LLC, where

he is currently retained as an expert for determining architectural management
standards.

D. BRUCE HORTON. D. Bruce Horton has been our Secretary/Treasurer/Chief
Financial Officer/Principal Accounting Officer and a director since March 2006.
During the past five years, Mr. Horton has been active in the financial arena in
both the private and public sectors as an accountant and financial management
consultant with an emphasis on corporate financial reporting, financing and tax
planning. Mr. Horton has specialized in corporate management, re-organization,
merger and acquisition, international tax structuring, and public and private
financing for over thirty years. From 1972 through 1986, Mr. Horton was a
partner in a public accounting firm. In 1986, Mr. Horton co-founded the Clearly
Canadian Beverage Corporation, of which he was a director and chief financial
officer from June 1986 to May 1997. He is a principal consultant in Calneva
Financial Services Ltd. that provides accounting and financial management
consulting services as well as investment banking services focusing on venture
capital opportunities in Asia. Mr. Horton is also director and audit committee
member to Uranium Energy Corp. (since March 2005) and Morgan Creek Energy Corp.

ALAN SEDGWICK. Alan Sedgwick has been a director since inception. From
approximately 1992 to present, Mr. Sedgwick has been an automotive lease
specialist for Ocean Park Ford Ltd., a motor vehicle dealer located in White
Rock, British Columbia, Canada. After graduating from Southern Alberta
Institutes of Technology (Business Administration) in 1975, Mr. Sedgwick
developed a diverse 30-year background in direct marketing and sales. During the
mid-seventies, he recognized the potential of the mini-computer and became of
the first to market them in western Canada for Olivetti Canada. After moving to
British Columbia, Mr. Sedgwick formed The Nova Communication Group, which was
active in all aspects of advertising and promotion of small and mid-sized
companies in the interior of the province. At the same time, Mr. Sedgwick
ventured into the food and beverage industry, opening Jonathan Segal's Bar &
Restaurant Ltd. For the past fifteen years, Mr. Sedwick has been in the
automotive leasing industry, focusing on niche markets such as the British
Columbia film industry.

STEPHEN JEWETT. Stephen Jewett has been a director since May 2006.
Since 1978, Mr. Jewett has been the owner of Stephen Jewett - Chartered
Accountants. During his career, Mr. Jewett was auditor of several public
companies. Mr. Jewett received his degree as a Chartered Accountant from the
Institute of Chartered Accountants of British Columbia and is the audit
committee's financial expert.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers
or persons that may be deemed promoters is or have been involved in any legal
proceeding concerning (i) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (ii) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (iii) being
subject to any order, judgment or decree, not subsequently reversed, suspended,
or vacated, of any court of competent jurisdiction permanently or temporarily

enjoining, barring, suspending or otherwise limiting involvement in any type of
business, securities or banking activity; or (iv) being found by a court, the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law (and the
judgment has not been reversed, suspended or vacated).

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our directors and officers,
and the persons who beneficially own more than ten percent of our common stock,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Copies of all filed reports are required to be furnished to
us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on
the reports received by us and on the representations of the reporting persons,
we believe that these persons have complied with all applicable filing
requirements during the fiscal year ended May 31, 2006.

ITEM 10. EXECUTIVE COMPENSATION

None of our directors or officers received an annual salary and bonus
that exceeded $100,000 during fiscal years ended May 31, 2006 or 2005. Our
officers and directors may be reimbursed for any out-of-pocket expenses incurred
by them on our behalf. We presently have no pension, health, annuity, insurance,
profit sharing, stock option or similar benefit plans. Neither Mr. McDougall,
our prior Chief Executive Officer, nor Mr. Johnson, our current Chief Executive
Officer, received any compensation from the Company.

EMPLOYMENT CONTRACTS

As of the date of this Annual Report, there are no employment
agreements in place with any employee, officer or director. As we receive
funding and hire employees and engage consultants, employment and consulting
agreements may be considered.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of the date of this Annual Report, the following table sets forth
certain information with respect to the beneficial ownership of our common stock
by each stockholder known by us to be the beneficial owner of more than 5% of
our common stock and by each of our current directors and executive officers.
Each person has sole voting and investment power with respect to the shares of
common stock, except as otherwise indicated. Beneficial ownership consists of a
direct interest in the shares of common stock, except as otherwise indicated. As
of August 28, 2006, there are 16,800,000 shares of common stock issued and
outstanding.

__________________________________________________________________________
Percent of
Name and Address of Beneficial Amount and Nature of Beneficial
Owner Beneficial Ownership Ownership
__________________________________________________________________________

Darlene Rodocker 2,625,000 (1) 15.63%
1081 Kent Street
White Rock, British Columbia
Canada V4B 4T2
__________________________________________________________________________

Alan Sedgwick 2,625,000 (1) 15.63%
1081 Kent Street
White Rock, British Columbia
Canada V4B 4T2
__________________________________________________________________________

Janet Shiels 2,100,000 (1) 12.50%
6156 224th Street
Langley, British Columbia
Canada V4B 4T2
__________________________________________________________________________

Russell J. Shiels 3,150,000 (1) 18.75%
6156 224th Street
Langley, British Columbia
Canada V2Y 2L5
__________________________________________________________________________

Steve Jewett -0- 0%
14977 21st Avenue
Surrey, British Columbia
Canada V4A 8G3
__________________________________________________________________________

Marcus Johnson -0- 0%
14977 21st Avenue
Surrey, British Columbia
Canada V4A 8G3
__________________________________________________________________________

D. Bruce Horton -0- 0%
14977 21st Avenue
Surrey, British Columbia
Canada V4A 8G3
__________________________________________________________________________

All officers and directors as 2,625,000 (1) 15.63%
a group (4 persons)
__________________________________________________________________________

(1) These are free-trading shares and non-restricted.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except for the transactions described below, none of our directors,
officers or principal stockholders, nor any associate or affiliate of the
foregoing, have any interest, direct or indirect, in any transaction from April
5, 2004 to the date of this Annual Report, or in any proposed transactions,
which has materially affected or will materially affect us.

ALANTIC AGREEMENT

and procure engineering services, (c) obtain state and local regulatory
approvals, (d) prepare periodic project budget reviews, (e) implement systems to
conform to local and state regulations, (f) supervise construction team,
including site engineering by Alantic's own staff engineer, (g) acquire
equipment and/or services of local subcontrators, (h) select and source
potential fill materials, and (i) establish and direct day-to-day operations;
and (iii) we shall compensate Alantic for their goods and services on a cost
plus basis, which entails payment for their costs plus a markup of 5% for
overhead and 10% for profit for a total of a 15% markup and a flat fee in the
amount of $2,500 plus travel expenses to appraise the viability of individual
prospective projects.

Mr. Russell J. Shiels, one of our principal shareholders, is the sole
shareholder and officer/director of Alantic.

ITEM 13. EXHIBITS

The following exhibits are filed as part of this Annual Report.

3.1 Articles of Incorporation (1)

3.2 Bylaws of Revelstoke Industries, Inc. (1)

10.01 Letter of Understanding between Revelstoke Industries, Inc. and
Alantic Contractors Ltd. dated January 27, 2005. (1)

23.1 Consent of MacKay LLP dated September 13, 2006

31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange Act.

31.2 Certification of Chief Financial Officer Pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange Act.

32.1 Certification of Chief Executive Officer Under Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.

32.2 Certification of Chief Financial Officer Under Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.

(1) Incorporated by reference to exhibits filed to the Registration
Statement on Form SB-2 with the Securities and Exchange Commission on May 13,
2005.

ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES

During fiscal year ended May 31, 2006, we incurred approximately
$18,000__ in fees to our principal independent accountant for professional
services rendered in connection with the audit of our financial statements for
fiscal year ended May 31, 2006 and for the review of our financial statements
for the quarters ended August 31, 2005, November 30, 2005 and February 28, 2006.

During fiscal year ended May 31, 2006, we did not incur any other fees
for professional services rendered by our principal independent accountant for
all other non-audit services which may include, but is not limited to,
tax-related services, actuarial services or valuation services.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

REVELSTOKE INDUSTRIES, INC.

Dated: September 12, 2006 By: /s/ MARCUS JOHNSON
_______________________________
Marcus Johnson, President/Chief
Executive Officer

Dated: September 12, 2006 By: /s/ D. BRUCE HORTON
________________________________
D. Bruce Horton, Treasurer/Chief
Financial Officer