UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form 10-KSB/A


(Amendment
No. 1)




ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934




For
the Fiscal Year Ended December 31, 2007


Logo  Energy
King, Inc.


(Exact name of
registrant as specified in its charter)




Nevada
            
            0-27454
            
            20-3161375(State
      or jurisdiction of incorporation or organization)
            
            (Commission
      File No.)
            
            (I.R.S.
      Employer Identification Number)




4455
Lamont Street, Suite 3,


San
Diego, CA 92109


(858)
272-6600


(Address
and telephone number of Principal Executive Offices)





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




Title
      of Each ClassCommon
      Stock, $.001 par value




Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.  o





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes
 x  No  o




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




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




As of
March 28, 2008, the aggregate market value of the 23,835,795 shares of the
registrant's common stock held by non-affiliates of the registrant was
$2,621,937, based on the $.11 last sale price of the registrant's common stock
on the OTC.BB Exchange on March 28, 2008.


As of
March 28, 2008, 105,412,850 shares of the issuer’s common stock were
outstanding.














FORWARD-LOOKING
STATEMENTS




This
report contains “forward-looking statements.” Such forward-looking statements
are made only as of the date of this report and involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company, or industry results, to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such risks, uncertainties and other
important factors include, among others, the retention of key management,
national or regional weakness in residential and non-residential construction
activity, difficulty in obtaining or increased costs associated with bonding,
shortages of labor and specialty building materials, seasonal fluctuations in
the demand for HVAC systems, the use of incorrect estimates for bidding a
fixed price contract, the Company's backlog failing to translate into actual
revenue or profits, the result of competition in the Company's markets, and the
imposition of past and future liability from environmental, safety and health
regulations. Important factors that could cause actual results to differ are
discussed under “Item 1A. Company Risk Factors.”




Table of
Contents


INDEX





PART
      IITEM
      1.
            Description
      of Business
            3ITEM
      1A.
            Risk
      Factors
            13ITEM
      2.
            Description
      of Properties
            19ITEM
      3.
            Legal
      Proceedings
            20ITEM
      4.
            Submission
      of Matters to a Vote of Security HoldersPART
      IIITEM
      5.
            Market
      for Common Equity, Related Stockholder Matters and Small Business Issuer
      Purchases of Equity Securities
            21ITEM
      6.
            Management's
      Discussion and Analysis or Plan of Operation
            23ITEM
      7.
            Consolidated
      Financial Statements
            33ITEM
      8.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            57ITEM
      8A/8A(T).
            Controls
      and Procedures
            57ITEM
      8B.
            Other
      information
            57PART
      IIIITEM
      9.
            Directors,
      Executive Officers, Promoters and Control Persons, Compliance with Section
      16(a) of the Exchange Act
            58ITEM
      10.
            Executive
      Compensation
            62ITEM
      11.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            63ITEM
      12.
            Certain
      Relationships and Related Transactions
            64ITEM
      13.
            Exhibits
            64ITEM
      14.
            Principal
      Accountant Fees and Services
            67Signatures
            68




2





PART I


ITEM 1.  DESCRIPTION OF
BUSINESS




General


The terms
“Energy King,” “ENKG,” ”EKI,” “we,” “us,” or “the Company” refer to Energy King,
Inc. and its consolidated subsidiaries, as appropriate in the
context.




Energy
King, Inc., originally named Buckeye Ventures, Inc. was formed in July 2005 for
the purpose of becoming a consolidator of independent local and regional
providers of residential heating, ventilating, air conditioning and plumbing
("HVAC/Plumbing") services and replacement equipment through the United
States.




The
Company's goal is to become a leading HVAC/Plumbing service provider in each of
the markets in which it operates or will operate. The Company's management is
comprised of executives and operators with extensive experience in the
HVAC/Plumbing industry generally as well as experience in HVAC/Plumbing service
consolidation, management and operations, including large multi-location,
national, regional and local HVAC/Plumbing companies.




The
Company believes that by pursuing its plan of combining local and regional
HVAC/Plumbing service providers into a well-managed national organization, the
Company should be able to create a national HVAC/Plumbing service provider with
brand name recognition throughout the HVAC/Plumbing service industry. We
believe that with national recognition the Company will be able to
strengthen and consolidate its customer bases and improve overall operating
efficiency, utilizing centralized management expertise and strong local
presences in each market.




Energy
King, Inc., a Nevada corporation, provides comprehensive heating,
ventilation and air conditioning (“HVAC”) installation, maintenance, repair and
replacement services within the mechanical services industry in 3 locations in
the United States. We operate primarily in the residential HVAC markets, and
perform most of our services within residential homes. In addition to standard
HVAC services, certain locations also provide specialized applications such as
improved home insulation through window installations. Approximately 80% of our
consolidated 2007 revenues were derived from residential installation customers
with approximately 15% of the revenues attributable to maintenance, repair and
replacement services and 5% attributable to windows installation. Our
consolidated 2007 revenues were derived from the following activities, all
of which are in the residential services industry, the single industry segment
we currently serve:


Service Activity
              
              
              Percentage of
      RevenueHVAC
      residential installations
              
              
              80Maintenance,
      repair and replacement services
              
              
              15Windows
              
              
              5Other
              
              
              -Total
              
              
              100%
  Energy
King, Inc. ("ENKG") was originally incorporated in Michigan under the name World
Wide Motion Pictures Corporation ("WWMO") on December 9, 1980. Pursuant to a
Share Exchange Agreement dated October 14, 2005 (which closed February 22, 2006,
effective March 1, 2006), ENKG (then known as WWMO) acquired Buckeye Ventures,
Inc. ("BVI") in a "reverse acquisition" transaction and accordingly the trading
symbol was changed from WWMO to BEYV in April 2006.




BVI was
incorporated in Nevada on June 24, 2005 for the purpose of acquiring and
operating businesses in the heating, ventilation and air conditioning ("HVAC")
and plumbing service industries. On September 22, 2005 (effective July 31,
2005), BVI acquired its first HVAC subsidiary located in the Boston, MA
region.




The Share
Exchange Agreement provides for the transfer of the assets and operations of
WWMO to a WWMO subsidiary, World Wide Entertainment, whose name was subsequently
changed to World Wide Motion Pictures Corporation ("WWMPC"). WWMO and its media
subsidiaries were organized to acquire, produce, finance, develop and distribute
motion picture and television properties and render consulting services to the
entertainment industry.




3


On July
6, 2007, Buckeye Ventures, Inc. filed to merge its Michigan company into its
Nevada BVI company. The Nevada corporation became the surviving entity as
Buckeye Ventures, Inc., a Nevada corporation. The Company’s Board of Directors
approved, and shareholders owning 64,462, 06 or 62.83% of the shares of the
Company’s common stock outstanding and 975,086 or 97.69% of the shares of the
Company's preferred stock outstanding as of July 6, 2007, consented in writing
to the merger of the Company into its wholly-owned subsidiary Buckeye Ventures,
Inc., (the "Nevada Company") and the action taken in connection with Company's
merger into the Nevada Company authorizing the increase in the authorized shares
of common stock of the Nevada Company from  50,000,000 shares to
500,000,000 shares and the authorized shares of preferred stock from 3,000,000
shares to 5,000,000. Such approval and consent constituted the approval and
consent of a majority of the total number of shares of outstanding common stock
and preferred stock of the Company and were sufficient pursuant to the
provisions of the Michigan Business Corporation Act and the Company’s By-Laws to
approve the action. Accordingly, the action was not submitted to the other
shareholders of the Company for a vote, and an Information Statement was
furnished to shareholders to provide them with certain information concerning
the action in accordance with the requirements of the Securities Exchange Act of
1934 and the regulations promulgated there under, including Regulation 14C,
and the provisions of the Michigan Business Corporation Act. The increase in the
number of authorized shares of common stock was necessary in order for the
Company to have sufficient shares of common stock for potential business
acquisitions and related financing transactions. At present, the Company has not
entered into any business transaction that would require the Company to utilize
share issuance exceeding the number of authorized but unissued shares of common
and preferred stock.





Effective
February 15, 2008, Buckeye Ventures, Inc. officially changed its name to Energy
King, Inc. to better reflect the scope of services provided by the
company.




Our
present and future focus is on the HVAC service and replacement markets for
residential and small commercial customers because it is our management's
belief, based upon years of industry experience, that the service and
replacement market offers higher margins and exposes us to a reduced level of
credit risk compared to the levels of risk usually associated with larger scale
new construction projects. In addition, we believe that the HVAC/Plumbing
service and replacement market offers more attractive pricing due to demands by
both residential and small commercial customers in local markets for
prompt, convenient and reliable service that can be offered by local
HVAC/Plumbing service providers.




Our
Internet address ishttp://www.beyv.com. We make available free of charge on or through our
website our annual report on Form 10-KSB, quarterly reports on
Form 10-QSB, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Exchange Act as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the Securities and Exchange
Commission, or the Commission.




GENERAL
DESCRIPTION OF THE HEATING, VENTILATION AND AIR CONDITIONG SERVICES
INDUSTRY


The
HVAC/Plumbing service industry is highly fragmented and the Company estimates,
based upon industry data, that there are at least 80,000 HVAC/Plumbing companies
in the US, mostly privately held companies that operate from a single location.
We believe based upon published industry data estimates that the market for the
service and replacement of HVAC/Plumbing systems in existing homes is in excess
of $50 billion annually.




Generally,
local HVAC/Plumbing companies are small, owner-operated, independent contractors
who serve customers in local markets, with limited access to capital for
investment in infrastructure, technology and expansion. We believe that
HVAC/Plumbing businesses are typically closely-held, single-center operators
that serve a limited geographic area and are heavily dependent upon referrals to
generate business. We also believe that, in many cases, these small-sized
service providers are operated by former service technicians who lack the
management experience and marketing expertise necessary to expand their
businesses, generate profitable operations and compete effectively with larger
operators in their local market as well as regional operators competing in their
market.




Our
management believes that larger HVAC/Plumbing contractors are generally better
able to operate efficiently and cost-effectively, offer customers a broader
array of HVAC/Plumbing related products and services and provide a higher level
of customer service than smaller operators. We believe that these competitive
advantages are the result of greater managerial and financial resources as well
as economies of scale in purchasing and marketing expenses, which factors
should enable us to promote a trend toward consolidation in the HVAC/Plumbing
industry and present an opportunity for well-capitalized operators, including
public companies such as the Registrant, to acquire additional operators on
favorable terms.




4





At
present, we serve the greater Sacramento, CA and Boston, MA metropolitan area
markets, principally providing renovation and replacement service to residential
and small business customers rather than new construction HVAC/Plumbing
installations. It is the view of our management, based upon their experience and
continuing HVAC/Plumbing industry analysis, that many metropolitan and suburban
areas in the U.S. have experienced significant growth in residential
HVAC/Plumbing renovation and replacement activity over the last several years as
a result of the past several years of strong residential housing market
nationally. We believe, even with the recent slowing in new residential
construction and the slowing of sale price increases in residential home that
the demographic trends indicate continued growth in the areas of HVAC/Plumbing
renovation and replacement as homeowners seek ways to add value to their
homes.




The
HVAC/Plumbing service industry is influenced by seasonal factors, which
generally result in lower activity during winter months than in other periods.
This factor is especially apparent in northern and mid-western regions of the
U.S. As a result, we expect that revenues and profits from our Sacramento, CA
and Boston, MA area operations and other such markets in which we make
acquisitions will generally be lower in the first and fourth quarters of each
fiscal year, and higher in the second and third quarters. As we make
acquisitions in the south and southwest areas of the U.S., seasonal factors will
become less apparent in our consolidated operations.




HVAC
systems provide the primary method of circulating fresh air in residences during
peak periods of heat and cold climate conditions. In many instances, replacing
an aging system with a modern, energy-efficient HVAC system significantly
reduces a home's heating and cooling costs and improves air quality and HVAC
system effectiveness. Older residential HVAC systems often have poor air quality
as well as inadequate air conditioning, and older HVAC systems result in
significantly higher energy costs than do modern systems. These factors cause
many residential owners to consider replacing older systems before the end of
their functioning lives. More than fifty percent of the HVAC systems replaced
are operational at the time of replacement.




Many
factors positively affect HVAC industry growth, particularly (i) population
growth, which has increased the need for residential space, (ii) an aging
installed base of HVAC equipment, (iii) increasing sophistication,
complexity, and efficiency of HVAC systems, (iv) growing emphasis on indoor
air quality, (v) reduction or elimination of the refrigerants commonly used
in older HVAC systems, and (vi) increasingly stringent regulations on minimum
HVAC and house ducting systems efficiency standards. We believe these factors
should increase demand for the reconfiguration or replacement of existing HVAC
systems and may also mitigate, to some extent, the effect on the HVAC industry
of the cyclicality inherent in the traditional construction
industry.





HVAC/PLUMBING
SERVICE




HVAC. At present, we offer HVAC
replacement and renovation services through both of our operating subsidiaries,
Energy King, Inc. and Heating & Air Conditioning Services, having operations
and facilities in the Sacramento, CA and Boston, MA metropolitan areas,
respectively. To date these operations have generated nearly all of our
revenues. HVAC systems typically involve air duct systems and air-handling and
condenser equipment. Other equipment components of an HVAC system include:
heaters, furnaces, condensers, air handlers and blowers. A typical HVAC
replacement project for residential or small commercial projects begins with a
thorough inspection of the current equipment. Engineering calculations are
performed to determine the appropriate replacement equipment. In most cases, the
air-handling equipment and condensing equipment are replaced as well as the
refrigeration lines. When necessary, duct repairs and modifications are also
made.




Maintenance,
Repair and Replacement. Maintenance and repair
contracting services are generally provided on a fee per visit basis. In
addition, we provide our customers with service contracts which generally have
an annual fee with additional sums due for certain products and services.
Revenues generated from repair and maintenance contracting services historically
represent a small portion of the overall revenue of the Company.




Windows. As we acquire new
HVAC/Plumbing service providers, our window replacement services will involve
the replacement of residential windows with more energy efficient models to
provide a better seal for the residential structure. Having a better seal makes
the residence more energy efficient by cutting down on heat loss in winter
operation and heat gains in summer operation thus providing cost savings to the
homeowner. The offering of energy efficient windows in tandem with HVAC systems
enhances the Company's presentation to the homeowner as a provider of a more
complete energy solution.




Plumbing. We anticipate a strong
synergy between HVAC operations and plumbing. As we acquire new HVAC/Plumbing
service providers, our plumbing services will involve the repair of residential
plumbing systems that convey domestic water throughout a home or supply natural
gas to various equipment or appliances, as well as the repair and replacement of
heaters, boilers, ovens and stoves, and kitchen and bathroom equipment. A
domestic water system typically includes separate piping for hot and cold water
as well as a number of fixtures including sinks, bathtubs, showers and hot tubs.
Substantially all of the equipment and component parts we will install are
purchased from third-party wholesale suppliers or directly from the
manufacturers or "OEMs", which equipment and components will be resold to our
customers as part of the contracted installation and repairs.




5




Strategy


OUR HVAC/PLUMBING BUSINESS OPERATING
STRATEGY




We
believe that successful implementation of our operating strategy, including our
acquisition program, should enable us to establish a national brand recognition
for the Company, with a reputation for superior, high quality service, skilled
technicians, cost efficiencies and customer satisfaction.




By
developing a national reputation, our management believes that we will appeal to
a large number of customers who will become familiar with and rely upon us as a
large, nationally recognized HVAC/Plumbing service company. Our operating
strategy is based on the following key elements:





(i)
            providing
      superior, high quality service in a professional and timely
      manner;(ii)
            offering
      competitive pricing structures;(iii)
            providing
      comprehensive training programs to our employees/technicians to further
      improve operating procedures and customer relations;(iv)
            generating
      a positive public image for the Energy King name from our customers' good
      will and satisfaction; and(v)
            promoting
      our program of entering into maintenance service agreements for existing
      and new customers in order to build customer
  loyalty.




We have
adopted and will continue to implement and update a manual of standardized
policies and operating procedures, based upon our management's extensive
industry experience, for each of our acquired HVAC/Plumbing subsidiaries. We
apply our policies and procedures to enable our subsidiaries to achieve a
consistent professional performance standard that will be recognized in their
respective markets for high-quality service supervised by our local management
teams and their respective skilled technicians, with oversight by our
professional corporate management. Our practice of promoting in each of our
markets of customer maintenance service agreements will also serve to generate
increasing, recurring revenues and at the same time will enhance our efforts to
develop loyal customer bases, providing us with the opportunity for
cross-marketing our services and products.




During
the past several years, the HVAC industry has experienced significant
improvement and new technology with respect to products and services. As a
result, HVAC service providers have begun to utilize newly introduced sensor
equipment to monitor the presence and levels of certain harmful substances
existing in customers' residential as well as commercial spaces. We offer
and actively promote through our existing HVAC/Plumbing service centers and will
promote in all future service centers a variety of Indoor Air Quality Services
("IAQ") products designed to detect and promptly remediate unhealthy air
quality. Our management believes that at present, IAQ products and services are
not widely offered from most small local HVAC service providers. Our IAQ
products and services include, among others, periodic duct cleaning, fresh air
ventilation and heat recovery systems, the use of ultraviolet light processes to
address the presence of living organisms in the indoor air such as airborne
bacteria, the use of highly efficient particulate removal filtration systems to
address microscopic particulates in the indoor air, and the sale and
installation of devices that address the presence of VOCs (Volatile Organic
Compounds) in the indoor air.




In order
for the Company to achieve and maintain operating efficiencies based on
economies of scale as we continue our consolidation plan, it is our intention to
consolidate certain administrative functions at our corporate headquarters in
San Diego, CA, to include centralized accounting and financial reporting systems
and procedures, while basic accounting activities will be conducted at the
operating level at each of our HVAC/Plumbing service centers. In addition, the
Company will implement a system of budgets, forecasts, reports and financial
controls, including procedures related to internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)).




We will
also consolidate in our San Diego headquarters operational controls, including
purchase and maintenance of insurance coverage, the leasing of service fleet
equipment, consolidation of the negotiation and purchase of inventory, legal
functions and national and regional sales and marketing. We will continue to
evaluate our controls and procedures for the purpose of generating further
economies of scale through selective consolidation of administrative and other
functions as we grow our HVAC/Plumbing business and complete additional
acquisitions.




Enhanced
Purchasing Power.As we make additional
acquisitions of operating HVAC/Plumbing service center locations in the future,
we intend to utilize our increasing size and market presence to enhance our
purchasing power on behalf of all of our HVAC/Plumbing service center operations
to generate economies of scale and improve operating margins. Based upon our
present level of negotiations with existing operators and planned future
negotiations that we hope will be successful, we believe that we will achieve
sufficient size to use our scale and purchasing power to improve our margins and
growth prospects.




6





At
present, we purchase our materials directly from the manufacturer or through
wholesalers and other distributors. We intend to use our future purchasing power
to negotiate with our suppliers to receive discounts whenever possible and plan
to enhance our material procurement strategy to actively reduce the number of
distributors from which we source materials. As a result of greater purchasing
power, it is our management's belief that our costs of material as a percentage
of revenues will decrease and our margins will increase.




The
implementation of our acquisition strategy provides for expansion into new
geographic areas including the Sunbelt states in the U.S. together with the
expansion of our presence in our existing markets in the Sacramento, CA and
Boston, MA areas. Because the U.S. residential HVAC/Plumbing service industry
historically has been and remains highly fragmented at present, we believe that
many HVAC/Plumbing businesses lack the capital necessary to expand operations,
and their business models typically do not provide for a profitable exit
strategy. As a result of our being a public reporting company with securities
registered under the Exchange Act, we believe that many desirable HVAC/Plumbing
operators will respond positively to the advantages of becoming affiliated with
and being a subsidiary of the Company. We intend to provide the following tools
and benefits to our operating subsidiaries:




(i)
            business
      and marketing support systems from the corporate parent that will enable
      the local HVAC/Plumbing service centers to operate more
      profitably;(ii)
            centralize
      administrative functions in order to increase each local operator's focus
      on its existing customers and increasing customer base by providing
      enhanced customer service without the time and effort presently devoted to
      administrative tasks;(iii)
            the
      development of a potential national name recognition;
  and(iv)
            the
      opportunity for the small HVAC/Plumbing service center operator and its
      key employees to acquire an equity interest in a public company with
      securities subject to quotation on the NASD
  OTCBB.





Our
acquisition program involves making acquisitions of existing HVAC/Plumbing
businesses in new markets that are not being served by the Company. Management's
main criteria for acquisitions of HVAC/Plumbing businesses are that they operate
successfully in their respective markets, have developed a growing customer base
and have reputations for high quality service and customer satisfaction. We
intend to target businesses that have annual revenue ranging from $2.5 million
to $15.0 million. In order to evaluate each potential acquisition target, we
consider additional criteria including whether potential acquisition targets
are: well-positioned in attractive markets; financially stable having positive
cash flow from operations; and have in place a strong management
team.




Initial
Acquisition.
Effective July 31, 2005, Buckeye acquired Heating and Air Conditioning Services,
Inc. (HACS), which has operated in the Boston metropolitan market and contiguous
suburban markets for over 20 years. HACS had revenues of approximately $4.7
million in 2005, $5.1 million in 2006 and $5,440,844 in 2007, approximately 95%
of which were derived each year from residential customers and 5%
from small commercial customers. HACS had 35 employees as of December 31,
2006 and 26 employees at December 31, 2007. We estimate that HACS will generate
revenues of approximately $5.5 million in 2007 and continue to be
profitable.




We focus
on strengthening operating competencies and on increasing profit margins. The
key elements of our operating strategy are:




Achieve
Excellence in Core Competencies. We have
identified six core competencies, which we believe are critical to attracting
and retaining customers, increasing operating income and cash flow and creating
additional employment opportunities. The six core competencies are:
(i) customer development and fulfillment, (ii) estimating,
(iii) timeliness, (iv) vendor relations, (v) safety, and
(vi) service capability.




Achieve Operating
Efficiencies. We think we can
achieve operating efficiencies and cost savings through purchasing economies,
adopting “best practices” operating programs, and focusing on job management to
deliver services in a cost-effective and efficient manner. We have placed great
emphasis on improving the “job loop” at our locations--qualifying, estimating,
pricing and executing projects effectively and efficiently, then promptly
assessing project experience for applicability to current and future projects.
We have initiated plans to use our combined purchasing to gain volume discounts
on products and services such as HVAC components, raw materials, services,
vehicles, bonding, insurance and employee benefits.




Attract, Retain
and Invest in our
Employees. We seek to
attract and retain quality employees by providing them an enhanced career path
from working for a larger company, the opportunity to realize a more stable
income and attractive benefits packages. Over the preceding year we have
substantially increased our investment in training. We believe these programs
can lead to significantly increased efficiency and growth.




Focus on
Residential Markets. We primarily
focus on residential markets, with particular emphasis on after-sale
installation services, and on maintenance, repair and replacement services. We
believe that the residential HVAC and plumbing markets are attractive because of
their growth opportunities, sizeable customer base, attractive margins and
potential for long-term relationships for continued maintenance and repair
services with existing client bases.





7


Seek
Growth Through Expansion and Measured Acquisitions.  The Company's
current acquisition targets are intended to expand the geographic coverage of
the Company by seeking entry into new U.S. markets including the Sunbelt and
other growing residential markets, in addition to increasing the Company's
presence in the Northeast U.S. markets and in California. The Company is in
advanced negotiations to acquire companies with revenues of approximately $9.7
million. Our plan is to continue discussions with other HVAC/Plumbing service
providers in desirable markets with the intention of making acquisitions which
management hopes will generate annual revenues of up to $100 million or more
within 24 months. We believe that we can increase our operating income by
opportunistically entering new markets or service lines through expansion and
acquisition. When we find opportunities to acquire businesses that have
attractive valuations and meet other criteria involving financial, operational,
management, geographic and legal due diligence considerations, we will consider
such transactions.




Sources
of Supply


The raw
materials and components we use include HVAC system components, ductwork, steel,
sheet metal and copper tubing and piping. These raw materials and components are
generally available from a variety of domestic or foreign suppliers at
competitive prices. Delivery times are typically short for most raw materials
and standard components, but during periods of peak demand, may extend to one
month or more.




Sales
and Marketing




We have a
diverse residential customer base, with no single customer accounting for more
than 1% of consolidated 2007 consolidated revenues. Management and a dedicated
sales force are responsible for developing and maintaining successful long-term
relationships with residential customers. We intend to continue our emphasis on
developing and maintaining long-term relationships with our customers by
providing superior, high-quality service in a professional manner. We believe we
can continue to leverage the diverse technical and marketing strengths at
individual locations to expand the services offered in other local
markets.





Employees




As of
December 31, 2007, we had 71 employees. We have no collective bargaining
agreements with existing employees. We have not experienced and do not expect
any significant strikes or work stoppages and believe our relations with
all employees are good.




Category
            Corporate
              Office
            Heating
      Air
              Conditioning
              Services,
      Inc.
            Energy
      King, Inc.
              -
      Sacramento
            Energy
      King, Inc.
              -
      Barnett
            World
      Wide Motion Pictures, Inc.
            Totals
            %Management
            3
            4
            2
            1
            --
            10
            15%Admin
            1
            1
            1
            4
            --
            7
            10%Service
      & dispatch
            --
            5
            5
            5
            --
            15
            21%Installers
            --
            10
            6
            8
            --
            24
            34%Sales
            --
            5
            3
            2
            --
            10
            14%Other
            1
            1
            3
            --
            --
            5
            6%Totals
            5
            26
            20
            20
            --
            71
            100%




Recruiting,
Training and Safety




Our
continued success depends, in part, on our ability to continue to attract,
retain and motivate qualified service technicians, installers, and field
supervisors. We believe our success in retaining qualified employees will be
based on the quality of our recruiting, training, compensation, employee
benefits programs and opportunities for advancement. We provide on-the-job
training, technical training, apprenticeship programs, attractive benefit
packages and career advancement opportunities within our company.





We have
established comprehensive safety programs throughout our operations to ensure
that all technicians comply with safety standards we have established and that
are established under federal, state and local laws and regulations.
Additionally, we have implemented a “best practices” safety program throughout
our operations, which provides employees with incentives to improve safety
performance and decrease workplace accidents. Regional safety directors
establish safety programs and benchmarking to improve safety within their
region. Finally, our employment screening process seeks to determine that
prospective employees have requisite skills, sufficient background references
and acceptable driving records, if applicable.





8




Risk
Management, Insurance and Litigation


The
primary risks in our operations are bodily injury, property damage and workers'
compensation injuries. We retain the risk for worker's compensation, employer's
liability, auto liability, general liability and employee group health claims
resulting from uninsured deductibles per incident or occurrence.




We have
not experienced insurance related injury claims. Because we have large
deductibles, we would anticipate that the vast majority of any work related
injuries would be small and such claims would be paid by us before an insurance
claim would be made. On the job security is an ongoing training issue for us. We
constantly reinforce safety on the job.




We are
subject to certain claims and lawsuits arising in the normal course of business.
We maintain various insurance coverages to minimize financial risk associated
with these claims. Should we have a material claim, we would estimate and
provide accruals for probable losses and related legal fees associated with
certain of our litigation in our consolidated financial statements. While we
cannot predict the outcome of any such proceedings, in our opinion and based on
reports of counsel, any liability arising from these matters individually and in
the aggregate will not have a material effect on our operating results or
financial condition, after giving effect to provisions already
recorded.




In
addition to the matters described above, we are defending a dispute arising out
of an alleged performance issue related to a residential customer. If we are not
successful in this dispute, it could have a material adverse effect on us.
However, management believes the likelihood of an adverse result of this
magnitude is remote, and management believes our accruals relating to the matter
appropriately reflect a probable outcome.




We
typically warrant labor for the first year after installation on new HVAC
systems and pass through to the customer manufacturers' warranties on equipment.
We generally warrant labor for 30 days after servicing of existing HVAC systems.
We do not expect warranty claims to have a material adverse effect on our
financial position or results of operations.





Competition




The HVAC
industry is highly competitive and consists of thousands of local and regional
companies. We believe that purchasing decisions in the residential  market
are based on (i) competitive price, (ii) long-term customer
relationships, (iii) quality, timeliness and reliability of services
provided, (iv) an organization's perceived stability based on years in
business and financial strength, (v) range of services provided, and
(vi) scale of operation. To improve our competitive position we focus on
the residential after-market including the maintenance, repair and replacement
market to promote first the development and then the strengthening of long-term
customer relationships. In addition, we believe our ability to provide
multi-location coverage, access to financing, a broader residential energy
efficiency perspective and specialized technical skills for residential owners
gives us a strategic advantage over smaller competitors who may be unable to
provide these services to customers at a competitive price.




We
believe that we are larger than most of our competitors, which are generally
small, owner-operated companies that typically operate in a limited geographic
area. However, there are divisions of larger contracting companies, utilities
and HVAC equipment manufacturers that provide HVAC services in some of the same
service lines and geographic areas we serve. Some of these competitors and
potential competitors have greater financial resources than we do to finance
development opportunities and support their operations.





We
believe our smaller competitors generally compete with us based on price and
their long-term relationships with local customers. Our larger competitors
compete with us on those factors but may also provide attractive financing and
comprehensive service and product packages.




Vehicles




We
operate a fleet of various owned or leased service trucks, vans and support
vehicles. We believe these vehicles generally are well maintained and sufficient
for our current operations.




Governmental
Regulation and Environmental Matters




Our
operations are subject to various federal, state and local laws and regulations,
including: (i) licensing requirements applicable to engineering,
construction and service technicians, (ii) building and HVAC codes and
zoning ordinances, (iii) regulations relating to consumer protection,
including those governing residential service agreements, and
(iv) regulations relating to worker safety and protection of the
environment. We believe we have all required licenses to conduct our operations
and are in substantial compliance with applicable regulatory requirements. If we
fail to comply with applicable regulations we could be subject to substantial
fines or revocation of our operating licenses.




9


Many
state and local regulations governing the HVAC services trades require
individuals to hold permits and licenses. In some cases, a required permit or
license held by a single individual may be sufficient to authorize specified
activities for all of our service technicians who work in the state or county
that issued the permit or license. We seek to ensure that, where possible, we
have two employees who hold any such permits or licenses that may be material to
our operations in a particular geographic region.




Our
operations are subject to the federal Clean Air Act, as amended, which governs
air emissions and imposes specific requirements on the use and handling of
chlorofluorocarbons, or CFCs, and certain other refrigerants. Clean Air Act
regulations require the certification of service technicians involved in the
service or repair of equipment containing these refrigerants and also regulate
the containment and recycling of these refrigerants. These requirements have
increased our training expenses and expenditures for containment and recycling
equipment. The Clean Air Act is intended ultimately to eliminate the use of CFCs
in the United States and to require alternative refrigerants to be used in
replacement HVAC systems. We do not believe these regulations involving CFCs
will materially affect our business on the whole because, although they require
us to incur modest ongoing training costs, our competitors also incur such
costs, and the regulations may encourage our customers to update their HVAC
systems.




Executive
Officers and Directors




Alan J. Mintz,age 58,
currently serves as our Chief Executive Officer and President. He was our
Chairman of the board of directors, CEO and President since inception in May
2005. On November 5, 2006, Mr. Alfred R. Roach was appointed Chairman, and Mr.
Mintz continues to serve as a Director. Alan Mintz provides Buckeye Ventures a
combination of operational and acquisitions-related experience that is virtually
unmatched in the industry today. Prior to joining Buckeye in 2005, Mr.
Mintz was a self employed consultant from 2003 through 2004. He gained this
experience while serving as an integral part of the senior management teams of
both ARS and Blue Dot Services, from 1990 to 2002, and it was this period that
shaped his insight regarding the shortcomings of traditional
Consolidation.  Moreover, it was while serving in these roles that he came
to fully appreciate the full potential that would be available to those
companies that could truly establish an effective national brand. In addition to
his duties with ARS and Blue Dot, Mintz served as president of Atlantic
Richfield's $30 million HVAC contracting division, and he founded Havsco Heating
and Air Conditioning, which became the largest residential and light commercial
HVAC company in the Cleveland area. Alan was founder of the Greater Cleveland
Air Conditioning Contractors Association. Alan's accomplishments include
involvement with more than 100 acquisitions on both the buy and sell
side.




Larry Weinstein,age 59,has served as our
Executive Vice President over Investor Relations since May 2005. He has launched
and developed with Alan Mintz, the business strategy and organizational
structure of Buckeye Ventures, Inc. From 2000 to 2005, Mr. Weinstein was an
independent contractor providing consulting and fund raising services. From 1999
through 2000, Mr. Weinstein was Vice President of Strategic Projects for
Cybergold, Inc., a high technology public company in Oakland, California. He was
a senior executive involved in its successful Initial Public Offering. He
has been instrumental in securing investment capital for Buckeye Ventures, Inc.
and raised millions of dollars for other small technology companies as well as
handling their Investor Relations campaigns.




Stephan Kurz,age 53,has served as our
Regional Vice President since March 2006. Steve is instrumental in locating
prospective acquisition candidates, due diligence, and assimilating new
acquisitions into the Buckeye structure. Steve works with existing subsidiaries
of Buckeye to improve operations and increase sales. From January 2004 until
January 2006, Mr. Kurz served as General Manager of ARS, Inc. As General Manger
of American Residential Services, he was assigned the responsibility of service
center turn around. From November 2001 through December 2003, he was certified
as a Six Sigma Black Belt which teaches the implementation of measurement-based
strategies that focus on process improvements and variation reductions. Mr.
Kurz worked at Blue Dot Services as the East Coast Acquisitions Manager in 1998
and 1999.




Henry S. Leonard, age 51,
serves as Chief Financial Officer and Chief Accounting Officer of Buckeye
Ventures, Inc. and has handled the duties of Corporate Controller since August
2006 and those of CFO since January, 2007. Henry was Chief Financial Officer and
director Global Health Trax from 2003 to 2006. He served as CFO and Director for
Nutri-Sport from 1999 to 2003. Prior to 1999, Mr. Leonard was self-employed as a
full time CPA. He is a Certified Public Accountant licensed to practice in
California, Hawaii and Florida. He holds a Doctorate in Business Administration,
Master of Business Administration and is a Certified Management Accountant. He
is a member of the American Institute of Certified Public Accountants, The
Institute of Management Accountants, and the California and Hawaii CPA
societies. He is an adjunct faculty member of National University, the
University of Phoenix and DeVry University in finance and accounting. Henry has
maintained a public accounting practice since 1994 which currently occupies
approximately fifteen hours per week of his time.




Alfred R. Roach, Jr., age 63,
serves as Chairman of the Board of Buckeye Ventures, Inc. Alfred R. Roach, Jr.
brings Buckeye Ventures one of the most distinguished careers in the HVAC
industry.  From August 2004 to the present, Mr. Roach has been owner and
CEO of 20 Minutes To Fitness of Sarasota, Florida, Inc. From May 2000 to the
present, Mr. Roach has been a general partner in legal practice with Callahan,
Roach and Garofalo. Mr. Roach practiced law in Atlanta, Georgia, from 1972 until
1986 with Callahan, Roach and Associates before returning in 2000.




10





His
practice focused on general corporate and commercial law, including corporate
finance, merger and acquisitions, with a heavy emphasis on franchise law.
His franchise practice included document preparation (franchise agreements and
disclosure), deal negotiations, compliance management, and franchisee relations
and dispute resolutions. As partner with Callahan/Roach & Garofalo, past
president of Encompass Services Mechanical Group from July 1997 to April 2000
and prior president and general counsel for Service America Corporation from
1987 to 1989, he offers a level of insight and practical understanding of the
sector that few can match.  Along with participating in the building and
operation of significant HVAC businesses himself, he has also been instrumental
in the development and dissemination of operational and pricing programs that
have set the standard for HVAC operations nationally.  He is widely
sought-out as a consultant on virtually all aspects of the business, and he is
generally regarded as one of the principal architects of the contemporary
comfort services industry.




Randy Eakin,age 45, serves as
a Director on the Board of Buckeye Ventures, Inc. Since 2006 he has been Chief
Financial Officer for Mini-Skool's Early Learning Centers. He was most recently
Senior Vice President and Chief Financial Officer for Swope Community
Enterprises from 2004 through 2005, which is a holding company with member
companies operating in the healthcare, real estate development and urban
planning industries. Swope had over $300 million of annual revenues and more
than 500 employees. Prior to Swope, Mr. Eakin served at the Director level at
P.F. Chang's China Bistro, Inc. in 2004, a national publicly held multi-unit
restaurant company operating two concepts in the Asian niche with annualized
revenues of $775 million and over 16,500 employees. Certain of his duties at
P.F. Chang's included matters of corporate finance, including the establishment
of formal processes and infrastructure for Sarbanes-Oxley compliance. Mr.
Eakin's background also includes high level positions at Sprint Nextel
Corporation from 1993 through 2003 and PriceWaterhouseCoopers from 1985 to1993
with extensive experience in the areas of auditing, risk management and
corporate financial planning and analysis.




Larry Epstein, 57, serves as a
Director on the Board of Buckeye Ventures, Inc. He is a practicing attorney in
Southern California.  He has been a sole practitioner since 1987
specializing in business, family and entertainment law. He was previously
involved for three years as Executive Vice President and in-house legal counsel
to Cherrystone Pictures, Inc., an independent feature film production company
based in Los Angeles, and in that capacity oversaw all corporate and
administrative fiduciary responsibilities of the company and orchestrated all
documentation for domestic and international co-ventures and related agreements.
Prior to his production company involvement, Mr. Epstein was a Senior Partner in
the Los Angeles-based law firm of Abouaf, Epstein, Meyers & Gronemeier,
specializing in business, tax, and entertainment law. He is a member of the
State Bar of California, San Fernando Valley Bar Association, Los Angeles County
Bar Association and The American Bar Association. Mr. Epstein has sat for 7
years as special referee and judge for the State Bar of California and is also
currently Judge Pro Tem for the Superior Court, State of California, County of
Los Angeles.




Paul Hancock, 50, serves as a
Director on the Board of Buckeye Ventures, Inc. He is the founder and developer
of World Wide Motion Picture's film/television production concept, and has
served as President and Chief Executive Officer of the company since its
inception in July of 1977. Prior to and during his tenure with the company, he
has functioned as a production and business advisor to various film financing
and production companies and has supervised the development/packaging and
production of a wide variety of moderately budgeted/cost-controlled feature film
and television projects. Mr. Hancock was responsible for leading one of the
first exploratory film finance teams to the Wall Street capital markets in the
late 1970's in order to develop and encourage motion picture financing by the
investment banking community. He was instrumental in the formulation of
entertainment industry relationships specifically in moderate budget feature
film production financing with companies such as E.F. Hutton & Co.; Kidder,
Peabody and Prudential-Bache Securities. Mr. Hancock has also been a lecturer on
various aspects of the entertainment industry, entrepreneurship and finance at
university graduate schools of business, seminars and conferences, is a frequent
radio talk show guest discussing independent film financing, production and
marketing, and is published in various print media encompassing film and
television industry topics. He has developed and maintained a specialized
expertise in and conducted diverse consulting for motion picture and television
financial packaging, specifically for public securities offerings,
private sector investments and commercial banking. He was previously
employed in a variety of management capacities in the theater and hotel
businesses for Farber Enterprises and Ramada Incorporated. Mr. Hancock attended
the Cranbrook Academies, Eastern Michigan University, and the University of
California at Los Angeles. He belongs to several professional organizations
including the Academy of Television Arts and Sciences.




Ronald L. Smith, 71, serves as
a Director on the Board of Buckeye Ventures, Inc. In 1965 after working for
another local company for three years, he founded Modern Air Conditioning. Inc.
in Ft Myers, FL with a borrowed $500, no customers and no coworkers, and built
it into one of the premier and most recognized and respected firms in the U.S.
with $15 million in annual revenues before selling it in 1986 to a
Philadelphia based mechanical contractor. Later he purchased, significantly
grew, and then sold three similar air conditioning companies in the Louisiana
and Florida markets. In 1985 he founded Service America, based in Atlanta, GA,
the first national HVAC franchiser. In less than four years the firm had over
100 franchisees. Ron Smith & Associates (RS&A), an HVAC exclusive
training and consulting company based in Roswell, GA was founded in 1991.
RS&A, with its focus on operations, systems, processes, and disciplines soon
became one of the industry's leading training and consulting firms.




11





In 1997
he joined Service Experts in Brentwood, TN, an HVAC consolidator and public
company, as its Chief Operating Officer and served in that position until mid
2000 after the company was sold to Lennox Industries. Currently, Ron consults
with and coaches, on a limited basis, contractors and distributors. Ron founded,
co-founded, owned, or has an ownership position in fourteen businesses. They are
Modern Air Conditioning in Ft. Myers, FL; Service America in Atlanta, GA; Carl's
Service America in Baton Rouge, LA; Edwards and Smith in Ft. Myers, FL; Hart's
Electric Motor Shop in Ft. Myers, Fl; R.L. Anderson in Venice, FL; Venture
International (Ron Smith & Associates) in Roswell, GA; Anderson Firestone in
Ft. Myers, FL; Spiro International in Fribourg, Switzerland; Service Canada in
Mississauga, Canada; Energy Management and Controls in Sarasota, FL; Service
Roundtable in Grapevine, TX; Ron Smith Coaching and Consulting in
Brentwood, TN; and, HVACR Business in Cleveland, OH. He served eleven years as a
member of the Florida Construction Industry Licensing Board, and also served on
the Florida Governor's Conference on Small Business. In 1979 he was chosen Free
Enterprise Citizen of the Year in Ft. Myers/Lee County, Fl. In 1980/81 he
graduated from Harvard Business School's Executive Education Program, Managing
Organizational Effectiveness. He is proud of being one of only 27 people to have
been elected to the HVAC Hall of Fame. He is on the board of directors of
Service Roundtable in Grapevine, TX and is one of the founders of the company.
He is on the Advisory Board for HVACR Business (a trade journal), has authored
many articles for various trade journals for the past 30 years and speaks at
HVAC conventions and symposiums. In the past he served on the board of directors
of Spiro International S.A. in Friborg, Switzerland, the Advisory Board for
North Carolina National Bank in Ft. Myers, FL, and the Advisory Board for
Roto-Rooter/Service America in Boca Raton, FL.




Adam Taylor, 55, serves as a
Director on the Board of Buckeye Ventures, Inc. He is currently President of
Associated Production Music, the world's largest music production company,
having the largest available collection of original production music. He has
held this position since 2001. For more than the past twenty years, Mr. Taylor
has specialized in providing consulting services to intellectual property
companies, organizations and individuals related to optimizing the economic
value of copyrights, trademarks and patents. From 1979 to 1989, Mr. Taylor
served as the Chief Executive Officer and President of Caswell-Massey, the
oldest chemist and perfumers in the U.S., established in 1752. Mr. Taylor also
was a founding partner of a firm that developed entertainment properties,
including several television series from 1990 to 1996




Board
committees and Director Independence




Our board
of directors has established (i) an Audit Committee, (ii) an Executive
Committee, (iii) a Finance Committee, and (iv) a
Compensating-Nominating-Governance Committee.  The members of each
committee are listed above in the subsection titled “Executive Officers and
Directors.”




Our
      Audit Committee is responsible for reviewing our financial reporting
      procedures and internal controls, the scope of annual and any special
      audit examinations carried out by our auditors, the performance,
      independence, and compensation of our auditors, systems and disclosure
      controls established to comply with regulatory requirements and our annual
      financial statements before they are reviewed and approved by our board of
      directors.  Such reviews are carried out with the assistance of
      our auditors and our senior financial
  management.




Our
      Executive Committee is responsible for general oversight and policy
      implementation relative to corporate strategy and operations. The
      Executive Committee acts on behalf of the board of directors in matters of
      corporate operations and policy, except for certain powers reserved
      exclusively to the board of directors. In addition, the Executive
      Committee may assist in identifying potential new members for the board of
      directors, subject to review by the independent
      Compensating-Nominating-Governance Committee, and may assist in
      identifying potential executive
officers.




Our
      Finance Committee is responsible for reviewing the banking and financial
      activities of the company and making recommendations to the board of
      directors and the Executive Committee with respect to those matters, as
      well as any other matters affecting the business and affairs of the
      company that may be referred to it by the Chief Executive Officer, the
      Chairman of the Board or the Executive
  Committee.




Our
      Compensating-Nominating-Governance Committee is responsible for
      identifying individuals qualified to become members of the board of
      directors and reviewing and evaluating such candidates. This committee is
      also responsible for reviewing and recommending compensation for corporate
      officers and consultants. The Compensating-Nominating-Governance Committee
      is comprised entirely of "independent" directors, as defined under NASD
      listing standards and SEC rules.




We
believe that the following directors are considered “independent” under Rule
4200(a)(15) of the National Association of Securities Dealers listing standards:
Alfred R. Roach, Jr., Randy Eakin, Ronald L. Smith, and Adam
Taylor.




12


ITEM 1A.  RISK
FACTORS




RISK FACTORS




Investing
in our common shares involves substantial risk, including the potential loss of
your entire investment. You should carefully consider the following factors as
well as other information contained in this prospectus and any prospectus
supplement before deciding to invest in our common shares.




Risks
Related To Our Business




Economic
Conditions In The Housing Market Could Adversely Affect Our
Business.




While our
subsidiaries are primarily engaged in the HVAC renovation, service and
replacement business for residential customers, the company's business plan
involves the full range of HVAC/Plumbing related services, including the service
and maintenance of all HVAC and plumbing systems principally for
residential replacement and renovation in each of the markets it which we
operate and will in the future operate. This business is dependent upon the
levels of residential and small business renovation customers. Ability to
maintain or increase revenues will depend on the number of residential and small
business customers starting and completing replacement and renovation projects
in the markets in which we presently operate and will in the future operate.
Levels of replacements and renovations is cyclical in nature and will be
affected by general and local economic conditions, changes in interest rates and
other factors, including the following:




-
            regional
      economic conditions;-
            interest
      rates and other factors affecting the availability and cost of
      financing;


-
            overall
      consumer confidence;




At
present we operate in both the Sacramento, CA and the Boston, MA metropolitan
markets and this concentrates our risk to local economic conditions in these
regions. Downturns in economic conditions in our markets could result in a
material reduction in our HVAC/Plumbing replacement and renovation activity
levels and our financial condition.




Our
HVAC/Plumbing Growth Will Depend On Our Ability To Acquire New HVAC/Plumbing
Service Locations In Other Markets, Our Ability To Successfully Integrate New
Locations And Our Ability To Finance New Acquisitions.




Our
ability to achieve our growth plan is dependent upon our ability to successfully
complete acquisitions of other HVAC/Plumbing service providers in additional
markets, as well as the economic conditions that prevail in such markets. We
intend to continue to pursue our program of selected acquisitions by identifying
and evaluating acquisition prospects with the view to complement and expand our
existing business. The timing, size and success of completing future
acquisitions and the required capital commitments for future acquisitions cannot
be predicted. If we are unable to find appropriate acquisitions and successfully
complete acquisitions at acceptable terms, our ability to increase our revenues
and generate profit may be diminished. Acquisitions may expose us to additional
business risks that are different than those we have traditionally experienced.
We also may encounter difficulties integrating acquisitions and successfully
managing the growth we expect to experience from these
acquisitions.




Each
acquisition involves a number of risks, including:




-
            the
      diversion of our management's attention from existing business operations
      to efforts involving integrating the operations and personnel of the
      acquired HVAC/Plumbing businesses;-
            possible
      adverse effects on our operating results during the integration process;
      and-
            our
      possible inability to achieve the intended objectives of the
      combination.




We may,
when and if the opportunity arises, acquire other products, technologies or
businesses involved in activities, or having product lines, that are
complementary to our business. Acquisitions involve numerous risks, including
difficulties in the assimilation of the operations, technologies and products of
the acquired companies, the diversion of management’s attention from other
business concerns, risks associated with entering markets or conducting
operations with which we have no or limited direct prior experience and the
potential loss of key employees of the acquired company. Moreover, any
anticipated benefits of an acquisition may not be realized. Future acquisitions
by us could result in potentially dilutive issuances of equity securities, the
incurrence of debt and contingent liabilities, and the write-off of acquired
research and development costs, all of which could have a material adverse
effect on our financial condition, results of operations and cash
flows.




13





We expect
to finance future acquisitions through the issuance or use of debt and/or equity
securities as well as through cash flow from operations. There can be no
assurance that we will be able to secure debt or equity financing, if and when
needed, at acceptable terms, nor can there be assurance that our cash flow will
be sufficient for financing acquisitions. If we should proceed with an
acquisition for cash consideration, we would require financing in addition to
our present financial resources, which could have an adverse effect on our
working capital required for our existing operations. Any future acquisitions
could also dilute the equity interests of our existing stockholders, require us
to write off assets for accounting purposes, or create other accounting
issues, such as significant expenses for amortization of goodwill or other
intangible assets.




We May Experience Difficulties In
Managing Internal Growth.




In order
to continue to grow internally, we expect to expend significant time and effort
managing and expanding our existing operations while implementing our
acquisition program. There can be no assurance that our systems, procedures and
controls will be adequate to support our expanding operations, including the
timely receipt of financial information from any acquired locations, which would
adversely affect our ability to remain current in our reporting requirements
under the Securities Exchange Act of 1934. Our growth can be expected to impose
significant added responsibilities on our corporate management, including the
need to identify, recruit and integrate new senior managers and executives, as
well as increasing costs associated with such efforts. If we are unable to
manage our growth, or if we are unable to attract and retain additional
qualified management, our operations could be materially adversely
affected.




We Are Dependent Upon Our Ability To
Retain Qualified Personnel Technicians And Any Shortage May Negatively Impact
Our Business, Including Our Ability To Grow.




We are
dependent upon an adequate supply of skilled HVAC technicians and plumbers to
complete our contracts in our Boston, MA and Sacramento, CA markets in a timely
manner. It may be expected, as we make acquisitions of other HVAC/Plumbing
service providers engaged in new residential construction installation or
make use of personnel with technical specialties in this area of expertise, that
from time to time, especially during periods of significant growth in the
housing sector in the markets in which we operate and in the future
will operate, we may experience a shortage of qualified plumbers and HVAC
technicians. We must compete with other HVAC and plumbing contracting companies
for a limited supply of skilled technicians. As a result, our ability to
increase productivity and profitability may be limited by our ability to employ,
train and retain skilled technicians necessary to meet our anticipated growth
requirements. In addition, labor shortages could result in wage increases, which
could reduce operating margins and have a negative effect on our financial
condition and results of operations. While we believe that we offer a
competitive compensation and benefits package, there can be no assurance that
our employees will continue their employment under present terms and as a
result, there can be no assurance that:




-
            we
      will be able to maintain the skilled labor force necessary to operate
      efficiently;-
            our
      labor expenses will not increase as a result of any shortage in the supply
      of skilled technicians; and-
            we
      will be able to grow during any period of labor
  shortage.




Due To Seasonality And Differing
Regional Economic Conditions, Our Results May Fluctuate From Period To
Period.




The
HVAC/Plumbing industry is influenced by seasonal declines in operations and
demand that affect the HVAC/Plumbing replacement and renovation business as well
as the new construction business. These seasonal declines are due to weather,
buying trends and other factors and typically result in reduced levels of
HVAC/Plumbing activity during the first and fourth quarters of the calendar
year. Our present business operations are limited to our Sacramento and Boston
metropolitan area markets, which markets are subject to seasonal variations in
operations and demand. Our revenues in the winter are typically significantly
lower than in the period from May to August, which is the peak air conditioning
season in both markets. As a result, our performance in any particular quarter
may not be indicative of the results that can be expected for any other quarter
or for the entire year. However, as we acquire additional HVAC/Plumbing service
providers in other locations including warmer weather areas in the U.S., it may
be expected that seasonality may have less of an impact on our results of
operations from period to period. However, there can be no assurance that our
future combined geographic, service and product mix will be sufficient to
overcome any declines that may occur in the future or that other seasonal
patterns will not emerge.




The Highly Competitive Nature Of The
HVAC/Plumbing Industry Could Affect Our Profitability By Reducing Our Profit
Margins.




The
HVAC/Plumbing service contracting industry is highly fragmented with many small
and mid-sized owner-operated private companies competing in each market. In
addition, we will be required to compete with larger regional companies that
operate in several markets and states, as well as with other companies,
including public and large private companies that operate nationally serving the
residential HVAC market, having far longer operating histories and far greater
financial, personnel and other resources.




14




Such
larger public and private companies have grown their businesses through
acquisition programs similar to our acquisition plan and it may be expected that
we will face competition in pursuing desirable acquisition candidates. We expect
that we will also compete in the future with companies that will offer customers
a greater range of services than we will provide or who have lower overhead
cost structures, and therefore will be able to provide comparable service
at lower rates. We may also face competition from former employees of both our
Sacramento and Boston area operations, as well as from future operations in new
markets, who are familiar with our current and future employees, customers,
pricing structure and operational practices. If we are unable to offer our
services at competitive prices or if we have to reduce prices to remain
competitive, our future profitability would be impaired.




Our Operations Are Subject To
Physical Hazards Associated With The Installation And Repair Of HVAC Systems; If
An Accident Occurs It Could Adversely Affect Our Business.




The
nature of our business exposes us to potential claims for personal injury or
death resulting from injuries to employees and other persons, transportation
accidents, property damage and negligence, intentional misconduct or defective
materials or workmanship in connection with the installation, repair or
maintenance of HVAC/plumbing systems. Claims could arise from the presence of
mold in structures that contain HVAC/plumbing systems that we have installed or
may install in the future. We will implement and maintain an active mold
remediation program in place to respond to any potential future claims. There
can be no assurance that the amount of any mold claims will not exceed insurance
coverage limits. Future claims by customers may be based on the warranties we
provide with respect to materials or workmanship or may be based on common law
as well as state statutes relating to the conduct of HVAC/plumbing contractors.
Although our operations are and will continue to be covered by comprehensive
insurance, subject to deductibles and policy limits, certain types of claims,
such as claims for punitive damages or damages arising from intentional
misconduct, are generally not covered by insurance. There can be no assurance
that any future claims would not exceed the amount of our insurance coverage,
consisting of $1,000,000 per occurrence and in aggregate, or that such insurance
will continue to be available on economically reasonable terms, if at
all.




The Loss Of A Group Of Key Management
Personnel, Either At The Corporate Or Operating Level, Could Adversely Affect
Our Business.




The loss
of key management personnel at the corporate level and/or at our operating
subsidiaries' locations could have an adverse effect on our business, financial
condition and results of operations. Our operations depend on the continued
efforts of our current and future executive officers, senior management and
management personnel at each of our Service Centers. One of the primary criteria
that we use in our evaluation of potential acquisition candidates is the quality
of their management and while our acquisition negotiation process includes the
retention of qualified management, we cannot guarantee that any member of
management of an acquired business will continue to remain in their capacity for
any particular period of time. Our subsidiaries service operations are managed
on a decentralized basis at the local level and our results of operations will
depend on the efforts, business contacts and experience of the management teams
of our operating locations. At present, we do not maintain key man life
insurance on any key personnel.




Our Results Of Operations Could Be
Adversely Affected As A Result Of Goodwill Amortization Or
Write-Offs.




When we
acquire a business, we may record an asset called "goodwill" equal to the excess
amount we pay for the business, including liabilities assumed, over the fair
value of the tangible assets of the business we acquire. Pursuant to generally
accepted accounting principles, we would be required to amortize this goodwill,
if traceable to specific items such as a customer base, over its estimated
useful life following the acquisition, which would directly impact our earnings.
Furthermore, we would be required to continually evaluate whether events or
circumstances have occurred which indicate that any intangible assets such as
goodwill may become impaired and subsequently require adjustments against
earnings.




Past And Future Environmental, Safety
And Health Regulations Combined With Governmental Laws And Regulations Could
Impose Significant Additional Costs On Us That Reduce Our Profits And
Consequently Adversely Affect Our Business Operations.




HVAC
systems are subject to various environmental statutes and regulations, including
the Clean Air Act and those regulating the production, servicing and disposal of
certain ozone depleting refrigerants used in HVAC systems. There can be no
assurance that the regulatory environment in which we operate will not change
significantly in the future. Various local, state and federal laws and
regulations impose licensing standards on technicians who install and service
HVAC systems. Our failure to comply with these laws and regulations could
subject us to substantial fines and potentially the loss of our
licenses.




It is
impossible to predict the full nature and effect of judicial, legislative or
regulatory developments relating to health and safety regulations and
environmental protection regulations applicable to our operations.




15





Most
states require that at least one employee be a licensed master, and many
jurisdictions in which we will operate also regulate the number and level of
license holders who must be present on a construction site during the
installation of plumbing and mechanical systems. Some jurisdictions in which we
will operate will require us to obtain a building permit for each plumbing or
mechanical project. In addition, we must comply with labor laws and
regulations.




We are
subject to safety standards established and enforced by the Occupational Safety
and Health Administration as well as various environmental laws and regulations
relating to the use, storage, transportation and disposal of various materials.
Our HVAC and refrigeration systems work is subject to additional restrictions
and regulations governing the availability, handling and recycling of various
refrigerants due to the phase-out of ozone-depleting substances under the
Montreal Protocol and the Clean Air Act.




HVAC
systems are subject to various environmental statutes and regulations,
including, but not limited to, laws and regulations implementing the Clean Air
Act, as amended (the "Clean Air Act"), relating to minimum energy efficiency
standards of HVAC systems and the production, servicing and disposal of certain
ozone depleting refrigerants used in such systems. Both our Sacramento and
Boston markets and additional markets in which we will operate are also
subject to various federal, state and local environmental regulations, including
laws and regulations governing the generation of hazardous substances and
maintenance of underground storage tanks, among other laws and regulations. As
we enter into new markets, we expect that we will become subject to additional
regulations. There can be no assurance that the regulatory environment in which
we presently operate or will operate in the future will not change significantly
in the future, which could adversely affect our business. Various local,
state and federal laws and regulations, including, but not limited to, laws and
regulations implementing the Clean Air Act, impose licensing standards on
technicians who service HVAC units. While the installers and technicians
presently employed by us are duly certified by applicable local, state and
federal agencies and have been able to meet or exceed such standards to date,
there can be no assurance that they will be able to meet stricter standards if
adopted in the future. In addition, installers must comply with local building
codes when installing HVAC units in residences and commercial buildings. In some
states, warranties provided for in our service agreements may be deemed
insurance contracts by applicable state insurance regulatory agencies, thereby
subjecting our business including our service agreements to the insurance laws
and regulations of any such state.




Actual And Potential Claims, Lawsuits
And Proceedings Could Ultimately Reduce Our Profitability And Liquidity And
Weaken Our Financial Condition.




We are
likely to continue to be named as a defendant in legal proceedings claiming
damages from us in connection with the operation of our business. Most of the
actions against us arise out of the normal course of our performing services on
work sites. We also are and are likely to continue to be a plaintiff in legal
proceedings against customers, in which we seek to recover payment of
contractual amounts due to us as well as claims for increased costs incurred by
us. When appropriate we establish provisions against certain legal exposures,
and we adjust such provisions from time to time according to ongoing
developments related to each exposure. If in the future our assumptions and
estimates related to such exposures prove to be inadequate or wrong, we
could experience a reduction in our profitability and liquidity and a weakening
of our financial condition. In addition, claims, lawsuits and proceedings may
harm our reputation or divert management resources away from operating our
business.




Earnings
For Future Periods May Be Affected By Impairment Charges.




Because
we have grown in large part through acquisitions, goodwill and other acquired
intangible assets represent a substantial portion of our assets. We perform an
annual goodwill impairment review in the fourth quarter of every fiscal year. In
addition, we perform a goodwill impairment review whenever events or changes in
circumstances indicate the carrying value may not be recoverable. As a result of
our goodwill impairment review in the fourth quarter of 2007, we recorded no
impairment charges for 2007. At some future date, we may determine that a
significant impairment has occurred in the value of our unamortized intangible
assets or fixed assets, which could require us to write off an additional
portion of our assets and could adversely affect our financial condition or our
reported results of operations.




Failure
Or Circumvention Of Our Disclosure Controls And Procedures Or Internal Controls
Over Financial Reporting Could Seriously Harm Our Business.




We plan
to continue to maintain and strengthen internal controls and procedures to
enhance the effectiveness of our disclosure controls and internal controls over
financial reporting.





Any
system of controls, however well designed and operated, is based in part on
certain assumptions and can provide only reasonable, and not absolute,
assurances that the objectives of the system are met. Any failure of our
disclosure controls and procedures or internal controls over financial reporting
could harm our financial condition and results of operations.




16





Failure
To Successfully Comply With Section 404 Of The Sarbanes-Oxley Act Of 2002
On A Timely Basis Could Seriously Harm Our Business.




Section 404
of the Sarbanes-Oxley Act of 2002 requires our management to report on our
internal controls over financial reporting and also requires our independent
registered public accountants to attest to this report. Although we have
historically been able to successfully comply with Section 404, in the
future, we may not be successful in complying with Section 404 on a timely
basis. The failure to comply with Section 404 could harm our financial
condition and results of operations.




Risks
Related To Ownership Of Our Common Stock




Market Prices Of Our Equity
Securities Can Fluctuate Significantly.




The
market price of our common stock may change significantly in response to various
factors and events beyond our control. A variety of events may cause the market
price of our common stock to fluctuate significantly, including the following:
(i) the risk factors described in this prospectus; (ii) a shortfall in
operating revenue or net income from that expected by securities analysts and
investors; (iii) changes in securities analysts' estimates of our financial
performance or the financial performance of our competitors or companies in our
industry generally; (iv) general conditions in the economy as a whole;
(v) general conditions in the securities markets; (vi) our
announcements of significant contracts, milestones, acquisitions; (vii) our
relationship with other companies; (viii) our investors' view of the
sectors and markets in which we operate; and (ix) additions or departures
of key personnel. Some companies that have volatile market prices for their
securities have been subject to security class action suits filed against them.
If a suit were to be filed against us, regardless of the outcome, it could
result in substantial costs and a diversion of our management's attention and
resources. This could have a material adverse effect on our business, results of
operations and financial condition.




There Is A Limited Trading Market For
Our Common Stock.




Our
common stock is subject to quotation on the Over-The-Counter Bulletin Board.
Recently, there has been limited trading activity in our common stock. There can
be no assurance that a more active trading market will commence in our
securities. Further, in the event that an active trading market commences, there
can be no assurance as to the level of any market price of our shares of common
stock, whether any trading market will provide liquidity to investors, or
whether any trading market will be sustained.




That DividendsHave Never Declared Or Paid
AndMay Not be Issued by
the Company in the Near
Future Could Adversely Impact its Ability to Attract
Investors.




We do not
expect to pay dividends in the immediate future. The payment of dividends, if
any, will be contingent upon our future revenues and earnings, capital
requirements and general financial condition. The payment of any dividends will
be within the discretion of our board of directors. It is our intention to
retain earnings for use in the business operations and accordingly, we do not
anticipate that the company will declare any dividends in the near
future.




The Possible Issuance Of Additional
Securities Would Cause Existing Stockholders to Experience a Dilution of Their
Respective Ownership Interests in the Company.




Our
Articles of Incorporation authorize the issuance of 500,000,000 shares of common
stock and 5,000,000 shares of preferred stock. At December 31, 2007, we had
105,412,850 common shares outstanding and 998,086 preferred shares outstanding
(which are convertible into an aggregate of 259,268 common shares). In
connection with the authorization of any future acquisitions, management
incentive plans or otherwise, it may be expected that we will issue additional
shares of common and/or preferred stock. To the extent that additional shares of
common stock are issued, our stockholders would experience dilution of their
respective ownership interests in the company. The issuance of additional shares
of common stock may adversely affect the market price of our common stock and
could impair our ability to raise capital through the sale of our equity
securities.




Compliance With Penny Stock RulesMay Negatively Impact
Sales of the Company’s Securities.




Our
securities are currently considered a "penny stock" as defined in the Exchange
Act and the rules there under, since the price of our shares of common stock is
currently less than $5. Unless our common stock is otherwise excluded from the
definition of "penny stock," the penny stock rules apply with respect to that
particular security.





The penny
stock rules require a broker-dealer prior to a transaction in penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document prepared by the SEC that provides information about penny stocks and
the nature and level of risks in the penny stock market.




17





The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
sales person in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require that the broker-dealer, not otherwise exempt from
such rules, must make a special written determination that the penny stock is
suitable for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure rules have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. So long as the common stock is subject to the penny
stock rules, it may become more difficult to sell such securities. Such
requirements, if applicable, could additionally limit the level of trading
activity for our common stock and could make it more difficult for investors to
sell our common stock.




The
Conversion Of Our Convertible Securities And The Exercise Of Our Warrants Could
Result In Substantial Dilution To The Interests Of Our
Stockholders.




As of
September 30, 2007, there were outstanding (i) debt securities convertible into
approximately 17,765,625 common shares, (ii) options convertible into
approximately -0- common shares, and (iii) warrants exercisable into
approximately 19,920,000 common shares. The conversion or exercise of our
outstanding convertible securities and warrants would substantially increase the
number of our common shares issued and outstanding and may decrease the
percentage ownership of our current stockholders.




The
Sale Of The Common Shares Acquired By The Selling Stockholder Upon The
Conversion Of Debentures Or The Exercise Of Warrants Could Cause The Price Of
Our Common Shares To Decline.




We are
registering 6,316,854 common shares. The number of common shares ultimately
offered for sale by the Selling Stockholder under this prospectus is dependent
upon the number of shares converted under the terms of the convertible
debentures or exercised under the terms of the warrants by the Selling
Stockholder. All 6,316,854 common shares registered in this offering are
expected to be freely tradable. Depending upon market liquidity at the time, the
sale of our common shares by Selling Stockholder under this offering at any
given time could cause the trading price of our common shares to
decline.




The
Market Price Of Our Common Shares Could Be Reduced If The Holders Of Our
Warrants Or Convertible Debentures Exercise Such Warrants Or Convert Such
Debentures, Such That We Would Be Required To Issue Additional Common
Shares.




Current
holders of our outstanding warrants and convertible debentures have the right to
exercise such warrants and convert such debentures into our common shares. If
all of our warrant holders exercised such warrants and all of our convertible
debenture holders converted such debentures into common shares, we would have to
issue approximately 19,920,000 additional common shares, which would result in
substantial dilution to the equity interests of holders of our common shares.
Public resales of our common shares following such warrant exercises and
conversion of such convertible debentures could depress the prevailing market
price of our common shares. Even prior to the actual warrant exercises or
debenture conversions, the perception of a significant market “overhang”
resulting from the existence of our obligation to honor the warrant exercises
and debenture conversions could depress the market price of our common
shares.




Should
Our Operating Revenues Fail To Increase To Provide Sufficient Cash Flow To Fund
Operations We May Require Additional Financing, Which We May Be Unable To Obtain
Or Which May Have A Dilutive Effect On The Percentage Ownership Of Current
Stockholders.




We
estimate that our current cash flow from operations and our cash on hand are
sufficient to fund our operations and service our debt obligations until
approximately January 2010. Actual results that vary from projections may
require the need for additional cash during that period. Our ability to arrange
such financing in the future will depend in part upon the prevailing capital
market conditions as well as our business performance. We may not be successful
in our efforts to arrange additional financing, if needed, on terms satisfactory
to us or at all. The failure to obtain adequate financing could result in a
substantial curtailment of our operations and our ability to service our debt
obligations. A failure to service our debt under the Trafalgar debentures could
result in a seizure of our assets. If additional financing is raised by the
issuance of securities, control of Buckeye Ventures, may change and/or our
stockholders may suffer significant dilution.




The
Concentration Of Common Share Ownership By Our Directors, Officers And Greater
Than 5% Stockholders May Delay, Deter Or Prevent Actions That Would Result In A
Change In Control And Might Affect The Market Price Of Our Common
Shares.




18


Our
present officers, directors and greater than 5% stockholders together
beneficially own 71,523,825 common shares or approximately 68.8% of our
outstanding common shares. As a result, these stockholders, if they act
together, are able to control all matters requiring stockholder approval
including the election of directors and approval of significant corporate
transactions. However, at this time, we are not aware of any formal or informal
agreement of such persons to act together on matters that may affect us. This
concentration of ownership may delay, deter or prevent actions that would result
in a change of control and might affect the market price of our common
shares.




The
Market Price Of Our Common Shares Has Fluctuated Significantly In The Past And
Is Likely To Fluctuate Significantly In The Future.




Since the
first quarter of fiscal 2004, our common shares have traded on the
Over-The-Counter Bulletin Board between a low of $0.03 per share and a high of
$1.30 per share. Furthermore, securities markets have experienced significant
price and volume fluctuations in recent history. Fluctuations in our common
shares could result from, among other things:




•
            quarterly
      variations in operating results;•
            short-selling
      of our common shares;•
            significant
      sales or issuances of our common shares or the perception that such sales
      or issuances could occur;•
            events
      affecting other companies that investors deem to be comparable to us;
      and•
            general
      economic trends and conditions.




These
market fluctuations might have a material adverse effect the market price of our
common shares.




Because
Our Common Shares Are Quoted On The Over-The-Counter Bulletin Board, You May
Have Difficulty Reselling Any Of The Common Shares You Purchase From A Selling
Stockholder.




Trading
in stocks quoted on the Over-The-Counter Bulletin Board is often thin and
characterized by wide fluctuations in trading prices due to many factors that
may have little to do with a company’s operations or business prospects.
Moreover, the Over-The-Counter Bulletin Board is not a stock exchange, and
trading of securities on the Over-The-Counter Bulletin Board is often more
sporadic than the trading of securities listed on a quotation system such as the
NASDAQ Stock Market or a stock exchange such as the American Stock Exchange.
Accordingly, you may have difficulty reselling any of the common shares you
purchase from a Selling Stockholder.




Our
Insurance Coverage May Be Inadequate To Cover All Loses Or Liabilities That May
Be Incurred In Our Operations.




Our
operations are subject to a number of hazards and risks. We maintain insurance
at levels, consisting of $1,000,000 per occurrence and in aggregate, that are
customary in our industry to protect against these liabilities; however, our
insurance may not be adequate to cover all losses or liabilities that might be
incurred in our operations. Moreover, we will be subject to the risk that we may
not be able to maintain or obtain insurance of the type and amount desired
at reasonable rates. If we were to incur a significant liability for which we
were not fully insured, it could seriously harm our business.





ITEM
2.  DESCRIPTION OF PROPERTY




We lease
the real property and buildings from which we operate. Our HVAC subsidiaries'
facilities are located in Massachusetts and California and consist of offices,
shops, and maintenance and warehouse facilities. The leases for our California
subsidiaries are for 4,000 square feet in Sacramento on a month-to-month basis
at an annual rental of $32,400 and 4,000 square feet in Riverbank on a
month-to-month basis at an annual rental of $21,600. Our Massachusetts
subsidiary leases 12,000 square feet through January 31, 2010 at an annual
rental of $90,000. The Company paid its Massachusetts' location rent under
during 2007 to an employee of the Company, who is President of the Buckeye's
wholly owned subsidiary, HACS. The rents paid HACS and terms under the sublease
are the same as was paid prior to its acquisition. Our WWMPC subsidiary leases
its premises of 400 square feet annual rental of $7,785.These premises, except
for HACS, are leased from individuals or entities with which we have no other
business relationship.




To
maximize available capital, we generally intend to continue to lease our
properties, but may consider owning properties where we believe ownership would
be more economical. We believe that our facilities are sufficient for our
current needs.




We lease
400 square feet for our executive and administrative offices in San Diego, CA
from an unaffiliated third party at an annual rental of $9,600.





These
premises are leased from individuals or entities with whom we have no other
business relationship. Leased premises range in size from approximately 4,000
square feet to 12,000 square feet. To maximize available capital, we generally
intend to continue to lease our properties, but may consider owning properties
where we believe ownership would be more economical. We believe that our
facilities are sufficient for our current needs.




19




ITEM
3.  LEGAL PROCEEDINGS


We are
subject to certain claims and lawsuits arising in the normal course of business.
We maintain various insurance coverages to minimize financial risk associated
with these claims.




We have
estimated and provided accruals for probable losses and related legal fees
associated with certain of our litigation in our consolidated financial
statements. While we cannot predict the outcome of these proceedings, in our
opinion and based on reports of counsel, any liability arising from these
matters individually and in the aggregate will not have a material effect on our
operating results or financial condition, after giving effect to provisions
already recorded.




During the last quarter of 2007, there was no matter
submitted to a vote of our security holders, through the solicitation of proxies
or otherwise.






20


PART II




ITEM
5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS


Our
common shares are quoted on the Over-The-Counter Bulletin Board under the symbol
“ENKG.OB”. The quarterly high and low bid information in U.S. dollars on the
Over-The-Counter Bulletin Board of our common shares during the periods
indicated are as follows:




High
            
            
            LowFiscal
      Year-Ending December 31, 2007Fourth
      Quarter, 2007
            
            $
            0.11
            
            
            $
            0.05Third
      Quarter, 2007
            
            $
            0.18
            
            
            $
            0.08Second
      Quarter, 2007
            
            $
            0.21
            
            
            $
            0.08First
      Quarter, 2007
            
            $
            0.25
            
            
            $
            0.06Fiscal
      Year-Ending December 31, 2006Fourth
      Quarter, 2006
            
            $
            0.25
            
            
            $
            0.06Third
      Quarter, 2006
            
            $
            0.35
            
            
            $
            0.15Second
      Quarter, 2006
            
            $
            0.55
            
            
            $
            0.25First
      Quarter, 2006
            
            $
            0.97
            
            
            $
            0.35Fiscal
      Year-Ending December 31, 2005Fourth
      Quarter, 2005
            
            $
            1.30
            
            
            $
            0.17Third
      Quarter, 2005
            
            $
            0.21
            
            
            $
            0.12Second
      Quarter, 2005
            
            $
            0.25
            
            
            $
            0.09First
      Quarter, 2005
            
            $
            0.18
            
            
            $
            0.08Fiscal
      Year-Ending December 31, 2004Fourth
      Quarter, 2004
            
            $
            0.18
            
            
            $
            0.10Third
      Quarter, 2004
            
            $
            0.40
            
            
            $
            0.05Second
      Quarter, 2004
            
            $
            0.06
            
            
            $
            0.04First
      Quarter, 2004
            
            $
            0.05
            
            
            $
            0.03




Holders




As of
March 28, 2008 there were approximately 821 holders of record of our common
shares based upon the stockholders’ listing provided by our transfer agent. Our
transfer agent is American Registrar & Transfer Company with an office
located at 342 E. 90 S., Salt Lake City, UT 84111 and whose phone number is
(801) 363-9065.




Dividend
Policy




We have
never declared or paid any cash dividends on our common shares. The payment of
any future dividends will be of the sole discretion of our board of directors.
We currently intend to retain earnings to finance the expansion of our business
and, therefore, we do not anticipate paying dividends in the foreseeable
future.




Securities
Authorized for Issuance under Equity Compensation Plans




As of
December 31, 2007, Energy King had no securities authorized for issuance under
an equity compensation plan.




Recent
Sales of Unregistered Securities


The
following is a summary of the transactions by us during the fiscal year ended
December 31, 2007 involving sales of our securities that were not registered
under the Securities Act of 1933, as amended (the “Securities Act”). Except as
noted below, we have sold or issued the following securities by reason of the
exemption afforded under Section 4(2) of the Securities Act. Except as stated
below, no underwriting discounts or commissions were payable with respect to any
of the following transactions.





21




The
offers and sales of the following securities were exempt from the registration
requirements of the Securities Act under Rule 506 insofar as (1) except as
stated below, each of the investors was accredited within the meaning of Rule
501(a); (2) the transfer of the securities were restricted by us in accordance
with Rule 502(d); (3) there were no more than 35 non-accredited investors in any
transaction within the meaning of Rule 506(b), after taking into consideration
all prior investors under Section 4(2) of the Securities Act within the twelve
months preceding the transaction; and (4) none of the offers and sales were
effected through any general solicitation or general advertising within the
meaning of Rule 502(c).





•  
On June 29, 2007, we entered into a securities purchase agreement with Trafalgar
Capital Specialized Investment Fund, a Luxembourg corporation (“Trafalgar”).
Pursuant to the securities purchase agreement, we agreed to issue to Trafalgar a
10% secured convertible debentures  in the aggregate amount of
$5,000,000, to be funded as follows $1,500,000 on the first closing; $1,750,000
on the second closing; and $1,750,000 on the third closing. The proceeds of the
first closing were released to us on October 2, 2007. The Trafalgar debentures
are convertible into shares of our common stock at the lower of $0.20 per share
or an amount equal to eighty-five percent (85%) of the lowest volume weighted
average price (“VWAP”) during the ten trading days immediately preceding the
conversion only if the closing bid price or the VWAP for the common stock is at
or above $0.20 per share. In connection with the securities purchase
agreement, we agreed to grant Trafalgar warrants to purchase 1,250,000 shares at
$0.001 per share and 50,000 warrants to purchase shares of common stock at each
of the first, second and third closing for each $100,000 in Trafalgar
debentures, exercisable at the lower of $0.07 per share or the closing bid price
of our common stock on the date prior to the issuance of each warrant. All of
the warrants are exercisable for a period of 5 years from the date of
issuance. The securities were sold in reliance upon exemption from
registration pursuant to Section 4(2) of the Securities Act.  These
shares are restricted securities and are subject to resale restrictions under
Rule 144 of the Securities Act (“Rule 144”).





•  
On June 28, 2007, we issued a total of 3,000,000 shares of our common stock to
two former stockholders of our subsidiary Energy King, Inc. (“EKI”). 2,500,000
shares were issued to one of the former EKI stockholders in satisfaction of
$500,000 in notes payable to him and 500,000 shares of the our common stock were
issued to the other former EKI stockholder in satisfaction of $100,000 in notes
payable to this joint tenancy. The securities were sold in reliance upon
exemption from registration pursuant to Section 4(2) of the Securities
Act.  These shares are restricted securities and are subject to resale
restrictions under Rule 144.




•  
On June 28, 2007, we issued a total of 1,040,000 units of our securities to four
investors in satisfaction of $260,000 in notes payable to such investors. Each
unit is comprised of one share of our common stock and three warrants, each
warrant exercisable into one share of commons stock at a price of $0.05 per
share until 12/31/2008.  The securities were sold in reliance upon
exemption from registration pursuant to Section 4(2) of the Securities
Act.  These shares are restricted securities and are subject to resale
restrictions under Rule 144.




•  
On March 31, 2007, we issued 400,000 shares of our common stock to an investor
to whom we were indebted to under a note payable in the amount of $173,446 and
$162,530 at June 30, 2007 and December 31, 2006, respectively. Pursuant to a
verbal agreement, the note payable to this investor is to be reduced by amounts
realized from this investor’s sale of the 400,000 shares. The securities were
sold in reliance upon exemption from registration pursuant to Section 4(2) of
the Securities Act.  These shares are restricted securities and are
subject to resale restrictions under Rule 144.




•  
On January 8, 2007, we issued 1,000,000 shares of our common stock, valued at
$200,000, to our current wholly owned subsidiary, World Wide Motion Pictures
Corporation (“WWMPC”) as part of the Share Exchange Agreement dated October 14,
2005 and effective March 1, 2006 described below. As of September 30, 2007,
WWMPC delivered 230,000 of the 1,000,000 shares to third parties for certain
services to be rendered to WWMPC. The securities were sold in reliance upon
exemption from registration pursuant to Section 4(2) of the Securities
Act.  These shares are restricted securities and are subject to resale
restrictions under Rule 144.




22





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




The
following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and related notes included elsewhere in this
annual report on Form 10-KSB. Also see “Forward-Looking Statements”
discussion.




Overview




We are a
national provider of residential heating, ventilation and air conditioning
(“HVAC”) installation, maintenance, repair and replacement services within the
mechanical services industry. The services we provide address a very broad need
in the residential market. We operate primarily in the residential HVAC markets
and perform most of our services within residences. In addition to standard HVAC
services, we provide specialized applications such as building automation
control systems, fire protection, process cooling, electronic monitoring and
process piping. Certain locations also perform related activities such as
electrical service and plumbing.




Our
operations are currently limited to the Sacramento, California and Boston,
Massachusetts metropolitan area markets. As of December 31, 2007 we had three
HVAC locations: (1) Heating and Air Conditioning Services, Inc., a Delaware
corporation with operations near Boston, Massachusetts (“HACS”), (2) Energy King
Sacramento in Sacramento, California (“EKI Sacramento”) and (3) Barnett’s Energy
King in Riverbank, California (“EKI Barnett”). We acquired HACS in 2005 as
our wholly-owned subsidiary. We acquired EKI Sacramento and EKI Barnett in
2006 as part of our acquisition of our wholly-owned subsidiary Energy King,
Inc., a California corporation.




Approximately
95% of our revenues are earned in the replacement or maintenance of existing
residential heating and cooling systems. Customers hire us to ensure such
systems deliver specified or generally expected heating, cooling, conditioning
and circulation of air in their homes. This entails installing core system
equipment such as packaged heating and air conditioning units. We also typically
install connecting and distribution elements such as piping and ducting. Our
responsibilities usually require conforming the systems to pre-established
engineering drawings and equipment and performance specifications, which we
frequently participate in establishing.




As
presented by the nationally recognized research firm First Research, demand for
HVAC and plumbing contractors can be sharply different in local markets,
depending on the level of local residential and commercial construction. For
example, in the first five months of 2007, total construction was up __
percent in the West, __ percent in the Midwest, but only __ percent in
the Northeast and __ percent in the South, according to McGraw-Hill
Construction. Construction activity in a city or region can change dramatically
from year to year. We believe that by consolidating certain company-wide
resources, we are better able to meet the seasonal and construction challenges
before us.




When
competing for project business, we usually estimate the costs we will incur on a
project, then propose a bid to the customer that includes a contract price and
other performance and payment terms. Our bid price and terms are intended to
cover our estimated costs on the project and provide a profit margin to us
commensurate with the value of the installed system to the customer, the risk
that project costs or duration will vary from estimate, the schedule on which we
will be paid, the opportunities for other work that we might forego by
committing capacity to this project, and other costs that we incur more broadly
to support our operations but which are not specific to the project.
 Typically customers will seek bids from competitors for a given project.
While the criteria on which customers select the winning bid vary widely and
include factors such as quality, technical expertise, on-time performance,
post-installation or maintenance support and service, and company history and
financial strength, we believe that price is the most influential factor for
most customers in choosing an HVAC installation and service
provider.




After a
customer accepts our bid, we generally enter into a contract with the customer
that specifies what we will deliver on the project, what our related
responsibilities are, and how much and when we will be paid. Our overall price
for the project is typically set at a fixed amount in the contract, although
changes in project specifications or work conditions that result in unexpected
additional work are usually subject to additional payment from the customer via
what are commonly known as change orders.




Labor and
overhead costs account for the majority of our cost of service. Accordingly,
labor management and utilization have the most impact on our operational
performance. Given the fixed price nature of much of our project work, if our
initial estimate of project costs is wrong or we incur cost overruns that cannot
be recovered in change orders, we can experience reduced profits or even
significant losses on fixed price project work.





We also
perform some project work on a cost-plus or a time and materials basis, under
which we are paid our costs incurred plus an agreed-upon profit margin. These
margins are typically less than fixed-price contract margins because there is
less risk of unrecoverable cost overruns in cost-plus or time and materials
work.




Our
average job takes less than a week to complete, with an average contract price
of approximately $12,000. Our customers generally pay via personal credit cards
or financing. In addition to residential HVAC installation work, approximately
15% of our revenues represent maintenance and repair service on
already-installed HVAC systems. This kind of work usually takes from a few hours
to a few days to perform.




23





Prices to
the customer are usually based on the equipment and materials used in the
service as well as technician labor time. We usually bill the customer for
service work when it is complete, typically with payment terms of up to thirty
days. We also provide maintenance and repair service under ongoing contracts.
Under these contracts, we are paid regular monthly or quarterly amounts and
provide specified service based on customer requirements. These agreements
typically cover periods ranging from one to three years and are cancelable on 30
to 60 days notice.




A
relatively small but growing portion of our revenues comes from windows
installation. Windows represents an extension of the Company's larger goal of
providing a greater energy consciousness to the residential consumer. By
replacing older less energy conservative windows with better energy saving
windows, the consumer benefits financially over time as does the general public
through the reduction in use of scarce energy in heating and cooling activities.
Plumbing contractors install bathroom and kitchen fixtures and the associated
pipes in residential or commercial buildings, and may also install gas
appliances and pipe work. It is management's intent to merge a viable plumbing
operation with the HVAC operations at all locations. Part of our mission and
vision is to become recognized by residential consumers as a dependable source
for controlling their overall home energy needs.




Profile
and Management of Our Operations




Energy
King, Inc. is in the business of building a nationally recognized Heating,
Ventilation and Air Conditioning company. The overall management philosophy is
to seek out specific regions across the United States and locate candidate
companies for acquisition. Hubs, or defined regional areas for growth are
identified. Then companies within the geographic region are identified for
acquisition. With the hub in the middle as the initial profit center providing
central training, development and coordination to acquisitions in that region,
the spokes or individual locations outside of the hubs extend the services of
Energy King throughout the area.





The
individual acquisitions are provided standardized support in training,
reporting, and revenue efforts. Management feels the local HVAC company that has
been acquired is able to grow its business over twenty-five percent a year with
the proper support. Management believes that with increased buying power, costs
can be reduced for equipment, vehicles, insurance, employee benefits and more.
With the combined assets of companies located in different cities in the United
States, management believes that the Company will be able to offer better
benefits to its employees than they could obtain elsewhere in the industry. With
built-in support structures regionally to build morale and teamwork, management
is motivated to allow greater autonomy in the daily operations of its
subsidiaries than previously seen in typical corporate structures. Through
operational support, by monitoring operations, maintaining strong internal
controls, and by providing training to take the local companies to higher levels
of sales, management wants its subsidiaries to be as independent as
possible.




At
Energy King, our mission is to become the leading national brand of residential
comfort services contractors by acquiring the industry's most outstanding
operators, sharing best practices, offering the most ethical and professional
services and providing solutions that meet our customers' needs and exceed their
expectations.




Our
vision at Energy King is to provide a safe, productive and rewarding work
environment for our employees across the country through a commitment to the
public and our families to make every home more energy efficient through the
combined synergies of professional technical expertise in Heating, Ventilation
and Air Conditioning services with the use of cost efficient windows, sealants
and plumbing services.




We manage
our operations based on a variety of factors. Financial measures we emphasize
include profitability, and use of capital as indicated by cash flow and by other
measures of working capital principally involving project cost, billings and
receivables. We also monitor selling, general, administrative and indirect job
support expense, workforce size and mix, growth in revenues and profits,
variation of actual job cost from original estimate, and overall financial
performance in comparison to budget and updated forecasts. Operational
factors we emphasize include job selection, estimating, pricing, management and
execution practices, labor utilization, safety, training, and the make-up of
both existing jobs as well as new business being pursued, in terms of job size,
technical application and location of the work.




Most of
our operations compete on a local or regional basis in the
Sacramento and Boston areas. Attracting and retaining effective managers
is an important factor in our business, particularly in view of the relative
uniqueness of each market and operation, the importance of relationships with
customers, and the high degree of competition and low barriers to entry in most
of our markets. Accordingly, we devote considerable attention to operating job
management quality, stability, and contingency planning, including related
considerations of compensation, and non-competition protection where
applicable.




24





Economic
and Industry Factors




As an
HVAC, plumbing and windows services provider, we operate in the broader
residential industry and are affected by trends in this sector. While we do not
have operations in all major cities of the US, we believe our regional presence
in the Boston, MA and Sacramento, CA areas is sufficiently large that we
experience trends in demand for and pricing of our services that are consistent
with trends in those regional sectors. As a result, we monitor the views of
major construction sector forecasters along with macroeconomic factors they
believe drive the residential sector, including trends in gross domestic
product, interest rates, business investment, employment, demographics, and the
general fiscal condition of federal, state and local governments. Per the
research organization, First Research, the value of US construction put in
place, an indicator of demand for HVAC and plumbing contractors, fell 2.8
percent in the first three quarters of 2007 from a year earlier. However, on
January 28, 2008, First Research also published that the value of US
construction of buildings is forecast to grow at an annual compounded rate of 6
percent between 2007 and 2012.




Operating
Environment and Management Emphasis




Each of
the current three locations are semi-autonomous in their operations. The Vice
President of Operations is the head over all subsidiary operations at the
present. The business model being implemented focuses on using existing
personnel to implement a proven technique of training technicians and installers
as well as reporting to increase sales and profits. In our acquisitions of HACS,
EKI Sacramento and EKI Barnett thus far, the former management team and
staff have remained after the acquisition. Emphasis on lead generation and
advertising has led to more sales at each location. Now, there is a momentum to
introduce plumbing and windows into the locations. Management is focused on the
development of its employees to see higher productivity through greater
motivation and greater customer satisfaction as a result.




Critical
Accounting Policies




In
response to the Commission's Release No. 33-8040, “Cautionary Advice
Regarding Disclosure About Critical Accounting Policies,” we identified our
critical accounting policies based upon the significance of the accounting
policy to our overall financial statement presentation, as well as the
complexity of the accounting policy and our use of estimates and subjective
assessments. We have concluded that our most critical accounting policy is our
revenue recognition policy.




As
discussed elsewhere in this annual report, our business has two service
functions: (i) installation, and (ii) maintenance, repair and
replacement, which we account for as the services are performed. In addition, we
identified other critical accounting policies related to our allowance for
doubtful accounts receivable, valuation of deferred tax assets and the
assessment of goodwill impairment. These accounting policies, as well as others,
are described in Note 2 to the Consolidated Financial Statements included
elsewhere in this annual report.
  Principles
of consolidation
  The
accompanying consolidated financial statements include the accounts of Energy
King, Inc., our parent Nevada corporation, and its wholly-owned subsidiaries.
All significant inter-company accounts and transactions have been
eliminated.
  Accounts
receivable
  The
Company provides an allowance for uncollectible trade receivable balances for
all specific account balances that are considered uncollectible. The Company
performs ongoing credit evaluations of its customers and generally does not
require collateral. An appropriate allowance for doubtful accounts is included
in accounts receivable. Concentrations of credit risk with respect to accounts
receivable are limited due to the nature of the Company's
receivables.




25





Inventory




Inventories
consist of parts and supplies that the Company purchases and holds for use in
the ordinary course of business and are stated at the lower of cost or market
using the first-in, first-out method.
  Revenue
recognition and deferred revenue
  The
Company recognizes revenue when risk of loss and title to the product is
transferred to the customer, which occurs at installation. Shipping and handling
fees are included in sales. Payments received for uninstalled products are
deferred until installation and are included in accounts payable.
  Income
Taxes
  The
Company accounts for income taxes under the asset and liability method. Under
this method, deferred tax assets and liabilities are recognized and measured
using enacted tax rates at the balance sheet date. Deferred tax expense or
benefit is the result of changes in deferred tax assets and liabilities.
Valuation allowances are established when necessary to reduce net deferred taxes
to amounts that are more likely than not to be realized.
  The
Company files a consolidated return for federal income tax purposes. Income
taxes are provided for under the liability method in accordance with SFAS
No. 109, “Accounting for Income Taxes,” which takes into account
differences between financial statement treatment and tax treatment of certain
transactions. Deferred tax assets represent the tax effect of activity that has
been reflected in the financial statements but which will not be deductible for
tax purposes until future periods. Deferred tax liabilities represent the tax
effect of activity that has been reflected in the financial statements but which
will not be taxable until future periods. The Company regularly evaluates
valuation allowances established for deferred tax assets for which future
realization is uncertain. The Company performs this evaluation each quarter.
Estimations of required valuation allowances include estimates of future taxable
income. The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income during the periods in which the activity
underlying these assets becomes deductible. The Company considers projected
future taxable income and tax planning strategies in making this assessment. If
actual future taxable income differs from the estimates, the Company may not
realize deferred tax assets to the extent it has estimated.




Application
of critical accounting policies




Our
financial statements and accompanying notes are prepared in accordance with U.S.
GAAP. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies.




In
September 2006, the FASB finalized SFAS No. 157, "Fair Value Measurements" which
will become effective in 2008. This Statement defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements; however, it does not require any new fair value measurements. The
provisions of SFAS No. 157 will be applied prospectively to fair value
measurements and disclosures in the Company's Consolidated Financial Statements
beginning in the first quarter of 2008.
  In
July 2006, the FASB released FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting and reporting for uncertainties in income
tax law. This Interpretation prescribes a comprehensive model for the financial
statement recognition, measurement, presentation and disclosure of uncertain tax
positions taken or expected to be taken in income tax returns. The Company will
adopt this Interpretation in the first quarter of 2007. The cumulative effects,
if any, of applying this Interpretation will be recorded as an adjustment to
Retained earnings, Goodwill, or Accumulated Gains and (Losses) not
Affecting Retained Earnings, as appropriate, as of the beginning of the
period of adoption. The Company has commenced the process of evaluating the
expected effect of FIN 48 on its Consolidated Financial Statements and does not
presently expect a material impact upon adoption. However, the Company does
expect to reclassify a portion of its unrecognized tax benefits from current to
non-current liabilities because payment of cash is not anticipated within one
year of the balance sheet date. Prior period amounts also will be reclassified
to conform to this change in presentation.


26





In June
2000, FASB issued SFAS 139, which rescinded SFAS 53, Financial Reporting by
Producers and Distributors of Motion Picture Films, and amended several other
statements in order to incorporate the guidance in SOP 00-2. Criteria for
revenue recognition are established along with costs and expenses.
Capitalization of film costs are covered as well as ultimate revenue estimates
from the exploitation, exhibition, and sales of a film in all markets and
territories over the entire revenue time horizon are covered. Specific items
relative to Energy King, Inc. include guidance on revenue recognition, related
costs and the valuation of film libraries through the calculation of ultimate
revenue for previously released films acquired as part of a film
library.




SFAS
No. 142, Goodwill and Other Intangible Assets, requires that goodwill be
tested for impairment at the reporting unit level (operating segment or one
level below an operating segment) on an annual basis (December for us) and
between annual tests if an event occurs or circumstances change that would more
likely than not reduce the fair value of a reporting unit below its carrying
value. These events or circumstances could include a significant change in
the business climate, legal factors, operating performance indicators,
competition or sale or disposition of a significant portion of a reporting unit.
Application of the goodwill impairment test requires judgment, including the
identification of reporting units, assignment of assets and liabilities to
reporting units, assignment of goodwill to reporting units, and determination of
the fair value of each reporting unit. The fair value of each reporting unit is
estimated using a discounted cash flow methodology. This requires significant
judgments including estimation of future cash flows, which is dependent on
internal forecasts, estimation of the long-term rate of growth for our business,
the useful life over which cash flows will occur, and determination of our
weighted average cost of capital. Changes in these estimates and assumptions
could materially affect the determination of fair value and/or goodwill
impairment for each reporting unit. We allocate goodwill to reporting units
based on the reporting unit expected to benefit from the combination. We
evaluate our reporting units on an annual basis and if necessary, reassign
goodwill using a relative fair value allocation approach.




SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
was issued in August 2001, which is effective for years beginning after December
15, 2001. It supersedes SFAS 121, replaces the accounting and reporting
provisions of APB 30, and amends ARB 51 on consolidated financial statements.
SFAS 144 retains the SFAS 121 requirements to recognize an impairment loss only
if the carrying amount of a long-lived asset is not recoverable from its
undiscounted cash flows, and to measure an impairment loss as the difference
between the carrying amount and the fair value of the asset. Indications of
asset impairment at the lowest level at which independent cash flows can be
identified for specific assets or groups of assets, is the focus of SFAS 144. If
there are indications of impairment, estimates of fair value (usually
future cash flows) are compared to the carrying value of the assets. For the
purpose of SFAS 144, impairment exists when the carrying amount of a long-lived
asset (or asset group) exceeds its fair value. An impairment loss is recognized
only if the carrying amount of a long-lived asset (or asset group) is not
recoverable and exceeds its fair value. If the undiscounted cash flows are less
than the carrying value, then the asset must be written down to fair
value.




In
November 2004, the FASB issued Statement of Financial Accounting Standards
No. 151, “Inventory Costs”. This Statement amends the guidance in ARB
No. 43 Chapter 4 Inventory Pricing, to require items such as idle
facility costs, excessive spoilage, double freight and rehandling costs to be
expensed in the current period, regardless if they are abnormal amounts or not.
This Statement became effective for us in the first quarter of 2006. The
adoption of SFAS No. 151 has not had a material impact on our financial
condition, results of operations, or cash flows.




27




ITEM
6A.  SELECTED FINANCIAL DATA




Table
1 - Historical Results


The
following selected historical financial data has been derived from the audited
financial statements of the Company and should be read in conjunction with the
historical Consolidated Financial Statements and related notes.


Year Ended December 31,2006
                      
                      
                      
                      2007Revenues
                      
                      $
                      6,273,685
                      
                      
                      
                      100.0
                      %
                      
                      $
                      13,603,074
                      
                      
                      
                      100.0
                      %Cost
      of services
                      
                      
                      3,809,743
                      
                      
                      
                      60.7
                      %
                      
                      
                      7,583,522
                      
                      
                      
                      55.7
                      %Gross
      profit
                      
                      
                      2,463,942
                      
                      
                      
                      39.3
                      %
                      
                      
                      6,019,552
                      
                      
                      
                      44.3
                      %Selling,
      general and administrative expenses
                      
                      
                      3,401,916
                      
                      
                      
                      54.2
                      %
                      
                      
                      6,619,770
                      
                      
                      
                      48.7
                      %Operating
      income (loss)
                      
                      
                      (937,974
                      )
                      
                      
                      (14.9
                      )%
                      
                      
                      (600,218
                      )
                      
                      
                      (4.4
                      )%Interest
      expense, net
                      
                      
                      (131,535
                      )
                      
                      
                      (2.1
                      )%
                      
                      
                      (530,779
                      )
                      
                      
                      (3.9
                      )%Other
      income (expense)
                      
                      
                      60,218
                      
                      
                      
                      .9
                      %
                      
                      
                      57,731
                      
                      
                      
                      .4
                      %Income
      (loss) before income taxes
                      
                      
                      (1,009,291
                      )
                      
                      
                      (16.1
                      )%
                      
                      
                      (1,073,266
                      )
                      
                      
                      (7.9
                      )%Income
      tax expense (benefit)
                      
                      
                      (10,599
                      )
                      
                      
                      (0.2
                      )%
                      
                      
                      (4,924
                      )
                      
                      
                      (0.0
                      )%Net
      income (loss)
                      
                      $
                      (1,019,890
                      )
                      
                      
                      (16.3
                      )%
                      
                      
                      (1,078,190
                      )
                      
                      
                      (7.9
                      )%Income
      (loss) per share - basic and dilutedNet
      income (loss)
                      
                      $
                      (.01
                      )
                      
                      
                      
                      
                      
                      $
                      (.01
                      )Cash
      dividends per share
                      
                      
                      --
                      
                      
                      
                      
                      
                      
                      
                      --






BALANCE SHEET
      DATA:
            
            2006
            
            
            2007Total
      current assets
            
            
            1,346,052
            
            
            
            2,796,074Total
      assets
            
            
            4,305,844
            
            
            
            6,462,114Total
      current liabilities
            
            
            2,134,777
            
            
            
            3,487,835Total
      non-current liabilities
            
            
            2,193,292
            
            
            
            2,510,798Total
      stockholders' equity
            
            
            (22,225
            )
            
            
            463,481Working
      capital
            
            
            (788,725
            )
            
            
            (691,761
            )




28





Table
2 - Quarterly Results of Operations (Unaudited)




Quarterly
financial information for the year ended December 31, 2007 is summarized as
follows:




2007Q1
            
            
            
            Q2
            
            
            
            Q3
            
            
            
            Q4Revenues
            
            $
            3,086,998
            
            
            $
            3,964,578
            
            
            $
            3,404,267
            
            
            $
            3,147,231Gross
      profit
            
            $
            1,379,923
            
            
            $
            1,750,963
            
            
            $
            1,437,046
            
            
            $
            1,451,620Operating
      income (loss)
            
            $
            132,703
            
            
            $
            170,178
            
            
            $
            (349,599
            )
            
            $
            (553,500
            )Income
      (loss) before income taxes
            
            $
            60,705
            
            
            $
            110,381
            
            
            $
            (455,355
            )
            
            $
            (788,997
            )Net
      income
            
            $
            57,666
            
            
            $
            110,381
            
            
            $
            (455,355
            )
            
            $
            (790,882
            )Income
      (loss) per share - basic and diluted
            
            
            .00
            
            
            
            .00
            
            
            
            (.00
            )
            
            
            (.01
            )




The sums
of the individual quarterly earnings per share amounts do not necessarily agree
with year-to-date earnings per share as each quarter's computation is based on
the weighted average number of shares outstanding during the quarter, the
weighted average stock price during the quarter and the dilutive effects of
options, warrants, and contingently issuable restricted stock in each
quarter.




We
started out the year started with three HVAC locations, HACS near Boston,
Massachusetts, EKI Sacramento in Sacramento, California and EKI Barnett in
Riverbank, California. The East Coast cyclical downside of January can be seen
as the sales increased in the second quarter due to the carry-over of the cold
season extending into May. September saw a decline in sales as the summer season
tempered the end of the third quarter. With the warmer months of October, it
took late November to begin seeing increased sales due to the cold
season.
 
 The third
and fourth quarters reflect significant increases in corporate overhead directly
attributable to legal fees and costs associated with the funds received through
Trafalgar Capital.
 
 The
Company's goal is to have independently profitable operations contributing
positively to the future of Energy King’s stockholders. The fourth quarter of
2006 began to see the positive effects of implementing the business model
designed by Energy King’s founders and management team. By building a solid and
highly confident team of installers and technicians motivated to provide quality
service to customers, sales do increase. By focusing on all expense levels to
controls costs, profits will be realized. With more acquisitions, the economies
of scale increase and profitability is enhanced.


Table
3 – Division Results of Operations (Unaudited)




Our core
HVAC operations are profitable. The following table of selected data illustrates
the profitability of HVAC operations. With Net Income from HVAC operations at
8.5% of Revenues, Management’s ability to generate profitable operations through
its established business model is highlighted. The overhead costs associated
with building Energy King into a nationally recognized brand in the HVAC
residential industry were greater than anticipated. Increased legal fees,
funding costs, other professional services, investor relations and other related
costs contributed approximately $844,645 in expenses or approximately 83% of the
total net loss.





2007CORPORATE
            
            
            HVAC
            
            
            WWMP
            
            
            CONSOLIDATED
              TOTALRevenues
            
            $
            -
            
            
            $
            13,602,999
            
            
            $
            75
            
            
            $
            13,603,074Cost
      of services
            
            
            -
            
            
            
            7,583,523
            
            
            
            -
            
            
            
            7,583,522Gross
      profit
            
            
            -
            
            
            
            6,019,477
            
            
            
            75
            
            
            
            6,019,552Selling,
      general and administrative expenses
            
            
            1,670,749
            
            
            
            4,835,825
            
            
            
            113,197
            
            
            
            6,619,770Operating
      income (loss)
            
            
            (1,670,749
            )
            
            
            1,183,652
            
            
            
            (113,122
            )
            
            
            (600,218
            )Interest
      expense
            
            
            512,882
            
            
            
            19,944
            
            
            
            992
            
            
            
            530,779Net
      income (loss)
            
            $
            (2,121,042
            )
            
            $
            1,159,782
            
            
            $
            (116,930
            )
            
            $
            (1,078,190
            )





The
Company is taking measures to reduce its overhead in the expense areas of legal,
investor relations and interest. Legal costs are being reduced through the use
of acquisition documents developed through prior acquisitions. This will help
reduce agreement development time and provide more standardized templates for
future acquisitions.




29





Several
investor relations firms have been used over the recent past, and efforts are
underway to reduce the associated costs. Interest expense is being reduced
through the retirement of debt. Currently, the acquisition model of Energy King
involves the purchase of companies through the use of cash, stock and notes
payable. Greater emphasis is being given to stock rather than notes payable.
When debt is used to acquire a company, the convertible feature to the Company’s
common stock is given emphasis.





As Energy
King acquires more locations, the contribution of available cash to apply
against corporate overhead is increased. Consequently, we are pursuing
negotiations with several locations as potential acquisitions in an effort to
overcome the immediate drain on overall earnings and cash flow.




2007
Compared to 2006


This is
the second full year of operations for Energy King, Inc. as an HVAC company, and
our core operations are doing very well. Our HVAC operations finished the year
2007 with 8.5% earnings on $13,603,074 of HVAC revenues. Under normal
conditions, this would have been adequate to cover the corporate overhead and
still have a positive net income for the year. Unfortunately, these were not
normal times, as we aggressively sought funding to grow the business. The
Company’s efforts to secure acquisition funding produced greater than expected
costs in professional fees and interest which were mostly responsible for the
Company’s net loss for the year of $1,078,190.


Revenues--Revenues increased
significantly in 2007 from 2006 for two primary reasons. The $7,329,389 increase
or 116.8% jump in revenue in 2007 over 2006 is due to EKI Sacramento and
Barnett’s EKI operations being included for the full year. EKI Sacramento
provided $4,395,914 in revenues to 2007 HVAC operations, compared to its three
months of revenues in 2006 of $1,140,647. Barnett’s did much better than
expected by providing $3,766,241 to HVAC revenues. By far the strongest location
in 2007 was HACS located in W. Bridgewater, MA just outside of Boston, MA. HACS
increased its revenues by $314,459 to $5,440,844 or 40% of HVAC sales for the
year.




Cost of Sales--Cost of sales
as a percentage of revenues decreased by 5% in 2007 over 2006. Through the
application of Buckeye's business model, greater emphasis is placed on cost
controls such as volume discounts with vendors. Attention is given to every
level of spending, and particularly to the costs associated with the services
provided. Most of the cost savings came in HACS through improved business
relationships with vendors. It is Buckeye's goal to maintain Cost of sales below
58% of net revenues. To see Cost of Sales as a percent of revenues decline from
60.7% to 55.7% while revenues are increasing is a strong testament to the
efficiencies of operations maintained throughout HVAC locations.




Gross Profit--Gross profit
increased $3,555,610 due to a combination of increased revenues and the HVAC
locations’ efforts in controlling cost of sales. By controlling costs, the
Company has provided greater resources to build the business. With a target
Gross Profit of 42% of net revenues, management feels it is able to reach
profitable operations, and in 2007 HVAC operations produced a 44.3% Gross
Profit.





Selling, General and Administrative
Expenses (“SG&A”)--SG&A expenses
increased $3,217,854 due primarily to having EKI Sacramento and Barnett’s EKI
included for the full year of 2007. Although the total costs related to SG&A
increased as a percent of revenues, they decreased 5.6% from 2006 to 2007.
Following are selected cost comments:




Marketing – Expenses
related to marketing, including payroll, advertising and other marketing related
costs, represented approximately 11% of revenues and 22.6% of total SG&A
costs in 2007. As a percent of revenues, the amount is very similar for both
years, but in 2007 marketing costs increased over 3% to $1,497,837 or 22.6% as a
percent of total SG&A.




Salaries - General and
administrative salaries accounted for over 41% of 2007 expenses at $2,757,326
for the year. As a percent of revenue, salaries were nearly identical in 2007
and 2006 at 20.3%.




Professional fees –
Expenses related to professional services including legal, accounting and other,
made up about 6.6% of expenses or $438,709 in 2007. This was a decrease in total
SG&A expenses of over 3% from 2006. It also represents a decrease of nearly
2.5% in 2007 from 2006 as a percent of revenues.




Rent – Office and
facility rent expenses, including storage areas, was about 2.7% of expenses or
$180,656 in 2007. This similar to 2006 as a percent of expenses as well as a
percent of revenues.




Communication –
Telephone, internet and facsimile expenses, made up about 1.8% of 2007 expenses
at $115,638 and about .9% of revenues. Both percentages are similar to 2006 at
1.9% and 1.1%, respectively.




Insurance - Directors and
officers liability insurance, property, casualty and general insurance was
$408,440 or about 6.2% of total SG&A expenses in 2007 which was an increase
of 1.8% over 2006. As a percent of revenues for 2007 and 2006, they were similar
at 3% and 2.6%, respectively.




Travel and entertainment - As
part of the mission of Buckeye, the CEO, VP of Operations and others are
required to travel and meet prospective acquisition candidates and facilitate
implementation of the Company's business model. Travel and entertainment
expenses for 2007 were $73,389 or about 1.1% of SG&A expenses and .5% of
revenues. This reflects similar percentages of both total SG&A and revenues
in 2006.




30





Utilities – Electric and
gas utilities for 2007 were $48,453, or just under 1% of SG&A expenses and
less than .5% of revenue which is comparable in both percentages to
2006.




Waste management – Waste
disposal of regulated items considered hazardous materials and potentially
harmful to the environment was .4% of SG&A expenses and less than .2% of
revenues or $23,976 for 2007 which is comparable in both percentages to
2006.




Interest Expense, Net--
Interest expense of $530,779 for 2007 is from notes payable related to
operations and acquisitions including interest fees related to the $1,500,000
Trafalgar Capital debenture. This represents 3.9% of revenues which is an
increase of $399,244 or 1.8% over 2006 as a percent of revenues.





Write off of debt costs-- Bad
debt expense of $3,828 accounted for approximately .06% of total SG&A
expenses in 2007. The Company's policy is to characterize receivables greater
than ninety days past due as uncollectible. Collection efforts are emphasized at
every location.




Outlook--Energy King is
focused on acquiring more HVAC businesses in 2008 while taking steps to blend
plumbing and window work with them. Emphasis will also be placed on identifying
and instituting company-wide economies of scale at every opportunity in
providing cost saving measures through such areas as better insurance rates,
vehicle purchasing power, equipment orders and employee benefits. Sales are
increasing and each location is profitable. With the addition of more locations
to the Energy King family of companies, acquisitions that are as well managed
and profitable as those currently a part of Energy King, the increased cash
flows will absorb the Company's overhead and make Energy King’s net income
positive.




Liquidity
and Capital Resources




For the
twelve months ended December 31, 2007, the Company experienced a net loss of
$(1,078,190). At December 31, 2007, the Company had $1,510,874 in cash and no
cash equivalents. Accounts receivable, net of allowances for doubtful accounts,
were $168,231 at the end of 2007, which is approximately the same 2% of assets
as at December 31, 2006. Inventory, as a percent of assets decreased in 2007 to
$623,607 or 7.5% of assets compared to 12.9% at the end of 2006.




At December
31, 2007, we had a working capital deficit of $(691,761), compared to a working
capital deficit of $(788,725) at December 31, 2006. The ratio of current assets
to current liabilities increased to 0.80:1 at December 31, 2007 compared to
0.63:1 at December 31, 2006. Cash flow provided by operations during
2007 was $121,944. This was an increase of $832,647 over the cash used by
operations in 2006 of $(710,703).  The Company anticipates that its
existing capital resources may be adequate to satisfy its capital requirements
for the foreseeable future. However, to accomplish its planned future
activities, it will need to acquire additional funds through public or private
financings in the form of debt or equity.




In
accordance with the Securities and Exchange Commission "Regulation D", and
subject to Rule 144 restrictions, during 2007, the Company issued 5,440,000
shares of its common stock for debt reduction, 600,000 shares of its common
stock pursuant to an acquisition, 580,091 of its common stock for services, and
244,141 shares of its common stock pursuant to its Trafalgar financing
agreements.




The
Company's principal liquidity at December 31, 2007 included cash of $1,510,874,
$168,231 net accounts receivable and $623,607 in inventory. The Company's
liquidity position remains sufficient enough to support on-going general
administrative expense, strategic positioning, and the garnering of contracts
and relationships.




Cash Flow-- For the year
ended December 31, 2007, we had positive cash flow from operations of
$121,944 as compared to a negative cash flow from operations of $(710,703) in
2006. This $832,647 increase in cash flow resulted primarily from increased
revenues and decreased to the revenues generated. With minimal increases in
corporate level staff expected over the next year, the cash flow is anticipated
be positive for 2008.




Our
business does not require significant amounts of investment in long-term fixed
assets. The substantial majority of the capital used in our business is working
capital that funds our costs of labor and installed equipment deployed in
project work until our customers pay us. Our average job duration generally
allows us to complete the realization of revenue and earnings in cash well
within a few months.





Accordingly,
we believe cash flow, by encompassing the Company's acquisition efforts, profit
margins and the use of working capital over our approximately three month
working capital cycle, is an effective measure of operating effectiveness and
efficiency when considered in light of the Company's business plan for
acquisitions and regional growth. Energy King anticipates positive cash flows
from operations in 2008.




31





Off-Balance Sheet Arrangements
and Other
Commitments--As is common in our industry, we have entered into certain
off-balance sheet arrangements in the ordinary course of business that result in
risks not directly reflected in our balance sheets. Our most significant
off-balance sheet transactions include liabilities associated with non
cancelable operating leases. We enter into non cancelable operating leases for
many of our facility, vehicle and equipment needs. These leases allow us to
conserve cash by paying a monthly lease rental fee for use of facilities,
vehicles and equipment rather than purchasing them. At the end of the
lease, we have no further obligation to the lessor. If we decide to cancel or
terminate a lease before the end of its term, we would typically owe the lessor
the remaining lease payments under the term of the lease.





The
following recaps the future maturities of our contractual obligations as of
December 31, 2007:




Twelve Months Ended December 31,2008
            
            2009
            
            2010
            
            2011
            
            2012
            
            Thereafter
            
            
            TotalOperating
      lease obligations
            $
            152,075
            
            $
            137,326
            
            $
            27,014
            
            $
            4,798
            
            
            --
            
            
            --
            
            
            $
            321,213




Energy
King, Inc. will enter into commitments of capital for items such as capital
expenditures for vehicles, and the strategic acquisitions of HVAC and plumbing
businesses. Regardless, it is reasonable to expect the Company to continue to
maintain excess cash on its balance sheet.




Seasonality
and Cyclicality




The HVAC
industry is subject to seasonal variations. Specifically, the demand for new
installation and replacement is generally lower during the winter months (the
first quarter of the year) due to reduced construction activity during inclement
weather and less use of air conditioning during the colder months. Demand for
HVAC services is generally higher in the second and third calendar quarters due
to increased construction activity and increased use of air conditioning during
the warmer months. The west coast of the United States experiences longer
periods of hot weather than the east coast. The east coast of the United States
experiences longer periods of cold weather than the west coast. Accordingly,
with some regional exceptions, we expect our revenues and operating results
generally will be lower in the first and fourth calendar quarters.




Historically,
the construction industry has been highly cyclical. As a result, our volume of
business may be adversely affected by declines in new installation and
replacement projects in various geographic regions of the United
States.




New
Accounting Pronouncements


SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
was issued in August 2001, which is effective for years beginning after December
15, 2001. It supersedes SFAS 121, replaces the accounting and reporting
provisions of APB 30, and amends ARB 51 on consolidated financial statements.
SFAS 144 retains the SFAS 121 requirements to recognize an impairment loss only
if the carrying amount of a long-lived asset is not recoverable from its
undiscounted cash flows, and to measure an impairment loss as the difference
between the carrying amount and the fair value of the asset. Indications of
asset impairment at the lowest level at which independent cash flows can be
identified for specific assets or groups of assets, is the focus of SFAS 144. If
there are indications of impairment, estimates of fair value (usually future
cash flows) are compared to the carrying value of the assets. For the purpose of
SFAS 144, impairment exists when the carrying amount of a long-lived asset (or
asset group) exceeds its fair value. An impairment loss is recognized only if
the carrying amount of a long-lived asset (or asset group) is not recoverable
and exceeds its fair value. If the undiscounted cash flows are less than the
carrying value, then the asset must be written down to fair value.





In
November 2004, the FASB issued Statement of Financial Accounting Standards
No. 151, “Inventory Costs”. This Statement amends the guidance in ARB
No. 43 Chapter 4 Inventory Pricing, to require items such as idle
facility costs, excessive spoilage, double freight and rehandling costs to
be expensed in the current period, regardless if they are abnormal amounts or
not. This Statement became effective for us in the first quarter of 2006. The
adoption of SFAS No. 151 is not expected to have a material impact on our
financial condition, results of operations, or cash flows.




32




ITEM
6B.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
  We are
exposed to market risk primarily related to potential adverse changes in
interest rates as discussed below. Management is actively involved in monitoring
exposure to market risk and continues to develop and utilize appropriate risk
management techniques. We are not exposed to any other significant financial
market risks including commodity price risk (except as discussed in
“Management's Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations”), foreign currency exchange risk or interest
rate risks from the use of derivative financial instruments. The Company does
not use derivative financial instruments.


We have
limited exposure to changes in interest rates due to our lack of indebtedness
for borrowed money. We are looking to establish banking relations for all of our
operations through a single banking entity. One benefit of this consolidated
effort will be to establish a line of credit (LOC) to avoid potential future
borrowing requirements for operations and or acquisitions. The Company
anticipates that its existing capital resources may be adequate to satisfy its
capital requirements for the foreseeable future. However, to accomplish its
planned future activities, it will need to acquire additional funds through
public or private financings in the form of debt or equity.





33




ITEM
7.  FINANCIAL STATEMENTS
  Part
I.  FINANCIAL INFORMATION




Item
1.  Financial Statements




INDEX
TO FINANCIAL STATEMENTS




Page
            
            Sequential
              Page
              NumberEnergy
      King, Inc. and SubsidiariesReport
      of Independent Registered Public Accounting Firm
            F-2
            
            35Consolidated
      Balance Sheets
            F-3
            
            36Consolidated
      Statements of Operations
            F-4
            
            37Consolidated
      Statements of Stockholders' Equity
            F-5
            
            38Consolidated
      Statements of Cash Flows
            F-6
            
            39Notes
      to Consolidated Financial Statements
            F-7
      - F-23
            
            40-56




F-1




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Stockholders of


Energy
King, Inc.





I have
audited the accompanying consolidated balance sheets of Energy King, Inc. and
subsidiaries (the Company) as of December 31, 2007 and 2006 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 2007 and 2006. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.





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





In my
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Energy King, Inc. and
subsidiaries as of December 31, 2007 and 2006 and the results of their
operations and their cash flows for the years ended December 31, 2007 and 2006,
in conformity with accounting principles generally accepted in the United
States.





The
accompanying financial statements referred to above have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company’s present financial situation
raises substantial doubt about its ability to continue as a going concern.
Management’s plans in regard to this matter are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.




As discussed in Note 18 to the consolidated financial
statements, the Company restated its consolidated financial statements for the
year ended December 31, 2007.








Freeport,
      New York
                March
      31, 2008 (except as Notes 17 and 18, which are as of August
      14, 2008)
            /s/
      Michael T. Studer CPA
      P.C.




F-2




ENERGY
KING, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE
SHEETS





December
      31,
              2007
              (Restated)
            
            
            December 31,
              2006ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
            
            $
            1,510,874
            
            
            $
            273,976Accounts
      receivable, less allowance for doubtful accounts of $12,000 and $22,415,
      respectively
            
            
            168,231
            
            
            
            95,058Other
      receivables
            
            
            215,976
            
            
            
            155,755Inventories
            
            
            623,607
            
            
            
            554,837Prepaid
      expenses
            
            
            277,386
            
            
            
            266,426Total
      current assets
            
            
            2,796,074
            
            
            
            1,346,052Property
      and equipment, net
            
            
            645,628
            
            
            
            415,044Goodwill
            
            
            2,835,263
            
            
            
            2,359,065Intangible
      assets, net
            
            
            76,411
            
            
            
            82,210Other
      assets, primarily deposits
            
            
            108,738
            
            
            
            103,473Total
      assets
            
            $
            6,462,114
            
            
            $
            4,305,844LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES:Accounts
      payable
            
            $
            1,115,513
            
            
            $
            711,295Accrued
      expenses
            
            
            1,075,300
            
            
            
            593,081Current
      portion of notes payable and long-term debt
            
            
            922,096
            
            
            
            637,500Customer
      deposits and deferred revenue
            
            
            374,926
            
            
            
            192,901Total
      current liabilities
            
            
            3,487,835
            
            
            
            2,134,777Notes
      payable and long-term debt, net of current portion
            
            
            2,510,798
            
            
            
            2,193,292Total
      liabilities
            
            
            5,998,633
            
            
            
            4,328,069Commitments
      and contingencies
            
            
            —
            
            
            
            —STOCKHOLDERS’
      EQUITY:Preferred
      stock, authorized 5,000,000 shares:
              $.01
      par value, 975,086 and 975,086 shares issued and outstanding,
      respectively
            
            
            9,751
            
            
            
            9,751$10.00
      par value, 23,000 and 23,000 shares issued and outstanding,
      respectively
            
            
            230,000
            
            
            
            230,000Common
      stock, authorized 500,000,000 shares, $.001 par value; 105,412,850 and
      98,548,618 shares issued and outstanding, respectively
            
            
            105,413
            
            
            
            98,549Additional
      paid-in capital
            
            
            2,413,239
            
            
            
            856,207Accumulated
      deficit
            
            
            (2,294,922
            )
            
            
            (1,216,732
            )Total
      stockholders’ equity
            
            
            463,481
            
            
            
            (22,225
            )Total
      liabilities and stockholders’ equity
            
            $
            6,462,114
            
            
            $
            4,305,844




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


F-3
 
 ENERGY
KING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF
OPERATIONS







Year
      Ended
              December
      31,2007
              (Restated)
            
            
            2006Revenues,
      net
            
            $
            13,603,074
            
            
            $
            6,273,685Cost
      of services
            
            
            7,583,522
            
            
            
            3,809,743Gross
      profit
            
            
            6,019,552
            
            
            
            2,463,942Selling,
      general and administrative expenses
            
            
            6,619,770
            
            
            
            3,401,916Operating
      income (loss)
            
            
            (600,218
            )
            
            
            (937,974
            )Other
      income (expense)Interest
      income
            
            
            13,614
            
            
            
            3,956Other
      income
            
            
            44,117
            
            
            
            56,262Interest
      expense
            
            
            (530,779
            )
            
            
            (131,535
            )Total
      other income (expense)
            
            
            (473,048
            )
            
            
            (71,317
            )Income
      (Loss) before income taxes
            
            
            (1,073,266
            )
            
            
            (1,009,291
            )Income
      tax expense
            
            
            4,924
            
            
            
            10,599Net
      Income (Loss)
            
            $
            (1,078,190
            )
            
            $
            (1,019,890
            )Income
      (Loss) per share: Basic and diluted
            
            $
            (.01
            )
            
            $
            (.01
            )Shares
      used in computing income (loss) per share:Basic
            
            
            102,667,039
            
            
            
            95,678,737Diluted
            
            
            102,667,039
            
            
            
            95,678,737




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




F-4





ENERGY
KING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY


Years
Ended December 31, 2007 and 2006




AdditionalPreferred Stock
            
            
            Common Stock
            
            
            Paid-In
            
            
            AccumulatedShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance
      at December 31, 2005
            
            796,869
            
            
            
            7,969
            
            
            
            79,792,001
            
            
            
            79,792
            
            
            
            (12,761
            )
            
            
            (196,842
            )
            
            
            (121,842
            )Issuance
      of Stock:Share
      exchange reverse acquisition of World Wide Motion Pictures Corporation,
      effective March 1, 2006
            
            201,217
            
            
            
            231,782
            
            
            
            18,670,858
            
            
            
            18,671
            
            
            
            (44,900
            )
            
            
            —
            
            
            
            205,553Conditional
      stock subscription receipts reversed as a result of delivery of common
      stock by related parties
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            375,000
            
            
            
            —
            
            
            
            375,000Delivery
      of common stock of related parties to general manager of
    HACS
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            18,000
            
            
            
            —
            
            
            
            18,000Delivery
      of common stock of related parties to lender
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            12,000
            
            
            
            —
            
            
            
            12,000Sale
      of common stock of related parties for cash
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            495,000
            
            
            
            —
            
            
            
            495,000Common
      stock issued for cash
            
            —
            
            
            
            —
            
            
            
            21,143
            
            
            
            21
            
            
            
            6,179
            
            
            
            —
            
            
            
            6,200Common
      stock issued for services
            
            —
            
            
            
            —
            
            
            
            64,616
            
            
            
            65
            
            
            
            7,689
            
            
            
            —
            
            
            
            7,754Net
      loss
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (1,019,890
            )
            
            
            (1,019,890
            )Balance
      at December 31, 2006
            
            998,086
            
            
            
            239,751
            
            
            
            98,548,618
            
            
            
            98,549
            
            
            
            856,207
            
            
            
            (1,216,732
            )
            
            
            (22,225
            )Common
      stock issued in debt reduction
            
            —
            
            
            
            —
            
            
            
            5,440,000
            
            
            
            5,440
            
            
            
            1,149,495
            
            
            
            —
            
            
            
            1,154,935Common stock issued pursuant to acquisition of Barnett
    assets
            
            —
            
            
            
            —
            
            
            
            600,000
            
            
            
            600
            
            
            
            149,400
            
            
            
            —
            
            
            
            150,000Common
      stock issued for services
            
            —
            
            
            
            —
            
            
            
            580,091
            
            
            
            580
            
            
            
            64,431
            
            
            
            —
            
            
            
            65,011Value of warrants relating to first closing of convertible
      debentures
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            156,450
            
            
            
            —
            
            
            
            156,450Common
      stock issued pursuant to Trafalgar financing
            
            —
            
            
            
            —
            
            
            
            244,141
            
            
            
            244
            
            
            
            37,256
            
            
            
            —
            
            
            
            37,500Net
      loss (Restated)
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (1,078,190
            )
            
            
            (1,078,190
            )Balance
      at December 31, 2007 (Restated)
            
            998,086
            
            
            $
            239,751
            
            
            
            105,412,850
            
            
            $
            105,413
            
            
            $
            2,413,239
            
            
            $
            (2,294,922
            )
            
            $
            463,481




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




F-5





ENERGY
KING, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH
FLOWS





Year
      Ended
              December
      31,2007
              (Restated)
            
            
            2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
            
            $
            (1,078,190
            )
            
            $
            (1,019,890
            )Adjustments
      to reconcile net income (loss) to net cash provided by
      operating activities—Stock
      compensation expense
            
            
            65,011
            
            
            
            37,754Depreciation
      and amortization expense
            
            
            150,822
            
            
            
            63,635Interest expense accreted on debt
      discounts
            
            
            58,226
            
            
            
            —Changes
      in operating assets and liabilities, net of effects of
      acquisitions—
              (Increase)
      decrease in—Receivables,
      net
            
            
            (62,658
            )
            
            
            170,843Inventories
            
            
            (68,770
            )
            
            
            (94,944
            )Prepaid
      expenses and other current assets
            
            
            (10,960
            )
            
            
            (76,623
            )Accounts
      payable
            
            
            404,218
            
            
            
            (121,260
            )Accrued
      expenses
            
            
            482,219
            
            
            
            175,097Customer
      deposits and deferred revenue
            
            
            182,026
            
            
            
            154,685Net
      cash provided by (used in) operating activities
            
            
            121,944
            
            
            
            (710,703
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchases
      of property and equipment
            
            
            (463,875
            )
            
            
            (154,840
            )Cash
      acquired (used) in connection with acquisition
            
            
            (300,000
            )
            
            
            181,326Other
      assets
            
            
            (5,014
            )
            
            
            (56,790
            )Net
      cash (used in) provided by investing activities
            
            
            (768,889
            )
            
            
            (30,304
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Increase
      (decrease) in notes payable and long-term debt
            
            
            1,883,843
            
            
            
            48,021Proceeds
      from conditional stock subscription
            
            
            —
            
            
            
            50,000Proceeds
      from sales of common stock
            
            
            —
            
            
            
            501,200Net
      cash provided by (used in) financing activities
            
            
            1,883,843
            
            
            
            599,221NET
      INCREASE IN CASH AND CASH EQUIVALENTS
            
            
            1,236,898
            
            
            
            (141,786
            )CASH
      AND CASH EQUIVALENTS, beginning of period
            
            
            273,976
            
            
            
            415,762CASH
      AND CASH EQUIVALENTS, end of period
            
            $
            1,510,874
            
            
            $
            273,976





Supplemental
      disclosures of cash flow information:Interest
      paid
            
            $
            174,392
            
            
            $
            115,618Income
      taxes paid
            
            $
            800
            
            
            $
            10,599Non-cash
      investing and financing activities:Stock
      issued for debt reduction
            
            $
            1,131,025
            
            
            $
            —Acquisition
      of Energy King, Inc. for notes payable
            
            $
            1,900,000
            
            
            $
            2,000,000Acquisition
      of Energy King, Inc. Barnett assets for common stock and reverse
      acquisition of World Wide Motion Pictures Corporation for stock,
      respectively
            
            $
            150,000
            
            
            $
            205,553




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




F-6





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




1
- BUSINESS AND ORGANIZATION




Energy
King, Inc. (“ENKG”), formerly Buckeye Ventures, Inc. ("BEYV"), was incorporated
in Michigan under the name World Wide Motion Pictures Corporation ("WWMO") on
December 9, 1980. Pursuant to a Share Exchange Agreement dated October 14, 2005
(which closed February 22, 2006 effective March 1, 2006), BEYV (then known as
WWMO) acquired Buckeye Ventures, Inc. ("BVI") in a "reverse acquisition"
transaction (see note 4) and accordingly the name was changed from WWMO to BEYV
in April 2006. BEYV and collectively with its subsidiaries, the “Company”, is a
national provider of comprehensive heating, ventilation and air conditioning
(“HVAC”) installation, maintenance, repair and replacement services within the
mechanical services industry. The Company operates primarily in the residential
HVAC markets.




BVI was
incorporated in Nevada on June 24, 2005 for the purpose of acquiring and
operating businesses in the heating, ventilation and air conditioning ("HVAC")
and plumbing service industries. On September 22, 2005 (effective July 31,
2005), BVI acquired its first HVAC subsidiary (see note 5).




The Share
Exchange Agreement provided for the transfer of the assets and operations of
WWMO to a WWMO subsidiary, World Wide Entertainment, whose name was subsequently
changed to World Wide Motion Pictures Corporation ("WWMPC"). WWMPC has
historically been engaged in acquiring film rights and seeking to distribute
these rights.





On July
6, 2007, BEYV (Michigan) merged with BVI (Nevada). The Nevada corporation is the
surviving entity.




Effective
February 15, 2008, Buckeye Ventures, Inc. changed its name to Energy King, Inc.
to better reflect the scope of services provided by the company.




2
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Principles
of consolidation




The
accompanying consolidated financial statements include the accounts of ENKG and
its wholly-owned subsidiaries. All significant inter-company accounts and
transactions have been eliminated in consolidation.





The
financial statements have been prepared on a “going concern” basis, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, as of December 31, 2007, the Company had
negative working capital of $691,761. Further, the Company incurred net losses
of $1,078,190 and $1,019,890 for the years ended December 31, 2007 and 2006,
respectively. These factors create uncertainty as to the Company’s ability to
continue as a going concern. The Company plans to improve its financial
condition by obtaining new financing. Also, the Company plans to pursue certain
acquisition prospects to attain profitable operations. However, there is no
assurance that the Company will be successful in accomplishing these objectives.
The financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.




Cash
and cash equivalents




For
purposes of the consolidated financial statements, the Company considers all
liquid instruments purchased with original maturities of three months or less to
be cash equivalents.




Accounts
receivable




The
Company provides an allowance for uncollectible trade receivable balances for
all specific account balances that are considered uncollectible. The Company
performs ongoing credit evaluations of its customers and generally does not
require collateral. An appropriate allowance for doubtful accounts is included
in accounts receivable. Concentrations of credit risk with respect to accounts
receivable are limited due to the nature of the Company's
receivables.




F-7





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




Accounting
for Allowance for Doubtful Accounts




We are
required to estimate the collectibility of accounts receivable and provide an
allowance for doubtful accounts for receivable amounts we believe we will not
ultimately collect. This requires us to make certain judgments and estimates
involving, among others, the creditworthiness of the customer, our prior
collection history with the customer, ongoing relationships with the customer,
the aging of past due balances, our lien rights, if any, in the property where
we performed the work, and the availability, if any, of payment bonds
applicable to our contract. These estimates are re-evaluated and adjusted as
additional information is received.




Inventory




Inventories
consist of parts and supplies that the Company purchases and holds for use in
the ordinary course of business and are stated at the lower of cost or market
using the first-in, first-out method.


Property
and Equipment




Property
and equipment are stated at cost, and depreciation is computed using the
straight-line method over the estimated useful lives of the assets. Leasehold
improvements are capitalized and amortized over the lesser of the expected life
of the lease or the estimated useful life of the asset. Assets are depreciated
over the following estimated useful lives:




Computers
      and equipment
            3
      to   7 yearsFurniture
      and fixtures
            3
      to   7 yearsVehicles
            3
      to   5 yearsLeasehold
      Improvements
            7
      to 10 years




Expenditures
for repairs and maintenance are charged to expense when incurred. Expenditures
for major renewals and betterments, which extend the useful lives of existing
equipment, are capitalized and depreciated over the remaining useful life of the
equipment. Upon retirement or disposition of property and equipment, the cost
and related accumulated depreciation are removed from the accounts and any
resulting gain or loss is recognized in “Loss (gain) on sale of assets” in the
statement of operations.





Goodwill




Goodwill
represents the excess of the aggregate purchase price paid by the Company in
acquisitions over the fair value of the net tangible and intangible assets
acquired.




Long-Lived
Assets




Long-lived
assets are comprised principally of goodwill, property and equipment, and
intangible assets. The Company periodically evaluates whether events and
circumstances have occurred that indicate that the remaining balances of these
assets may not be recoverable.





The
Company uses estimates of future income from operations and cash flows, as well
as other economic and business factors, to assess the recoverability of these
assets. If the sum of the expected undiscounted cash flows is less than the
carrying value of the related asset or group of assets, a loss is recognized for
the difference between the fair value and carrying value of the asset or group
of assets. Such analyses necessarily involve significant judgment.




Revenue
recognition and deferred revenue




The
Company recognizes revenue when risk of loss and title to the product is
transferred to the customer, which occurs at installation. Shipping and handling
fees are included in sales. Payments received for uninstalled products are
deferred until installation and are included in customer deposits and deferred
revenues.





Shipping
and handling fees




Shipping
and handling costs billed to customers are included in sales and the related
costs are included in cost of goods sold.  Shipping and handling costs are
charged to expense as incurred.




F-8





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




Concentration
of suppliers




The
Company has a wide array of vendors to purchase products from. Interruption in
the Company's supply sources would not impact the Company's ability to meet
customer demand or adversely affect future operating results.




Warranty
Costs




The
Company typically warrants labor for the first year after installation on new
HVAC systems. The Company generally warrants labor for 30 days after servicing
of existing HVAC systems. A reserve for warranty costs is estimated and recorded
based upon the historical level of warranty claims and management’s estimate of
future costs.





Earnings
(loss) per share




Basic
earnings (loss) per common share (EPS) are based on the weighted average number
of common shares outstanding during each period. Diluted earnings per common
share are based on shares outstanding (computed as under basic EPS) and
potentially dilutive common shares. For the years ended December 31, 2007 and
2006, the Company had convertible notes payable and warrants outstanding, They
are potentially dilutive common shares but are not included in the computation
of diluted loss per share because their inclusion would have been
anti-dilutive.




Comprehensive
income (loss)




The
Company has no items of other comprehensive income (loss) for the years ended
December 31, 2007 and 2006.





Income
Taxes




The
Company accounts for income taxes under the asset and liability method. Under
this method, deferred tax assets and liabilities are recognized and measured
using enacted tax rates at the balance sheet date. Deferred tax expense or
benefit is the result of changes in deferred tax assets and liabilities.
Valuation allowances are established when necessary to reduce net deferred taxes
to amounts that are more likely than not to be realized.




The
Company files a consolidated return for federal income tax purposes. Income
taxes are provided for under the liability method in accordance with SFAS
No. 109, “Accounting for Income Taxes,” which takes into account
differences between financial statement treatment and tax treatment of certain
transactions. Deferred tax assets represent the tax effect of activity that has
been reflected in the financial statements but which will not be deductible
for tax purposes until future periods. Deferred tax liabilities represent the
tax effect of activity that has been reflected in the financial statements but
which will not be taxable until future periods.




The
Company regularly evaluates valuation allowances established for deferred tax
assets for which future realization is uncertain. The Company performs this
evaluation each quarter. Estimations of required valuation allowances include
estimates of future taxable income. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which the activity underlying these assets becomes deductible. The
Company considers projected future taxable income and tax planning strategies in
making this assessment. If actual future taxable income differs from the
estimates, the Company may not realize deferred tax assets to the extent it has
estimated.




Advertising




Advertising
costs are charged to expense as incurred. Advertising costs are included in
selling, general, and administrative expenses on the accompanying consolidated
statements of operations and totaled $1,497,837 and $552,718 for the years ended
December 31, 2007 and 2006, respectively.




Fair
value of financial instruments




The
carrying value of the Company's cash and cash equivalents, accounts receivable,
accounts payable, accrued expenses, and notes payable approximate fair values
due to the short-term maturity of the instruments. The carrying value of
long-term obligations approximates the fair value based on the effective
interest rates compared to current market rates.




F-9




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




Recently
issued accounting pronouncements




In
September 2006, the FASB finalized SFAS No. 157, "Fair Value Measurements" which
will become effective in 2008. This Statement defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements; however, it does not require any new fair value measurements. The
provisions of SFAS No. 157 will be applied prospectively to fair value
measurements and disclosures in the company's Consolidated Financial Statements
beginning in the first quarter of 2008.





Segment
Disclosure




Buckeye’s
activities are within the residential market of the mechanical services
industry, which is the prominent industry segment served by the
Company.





Use
of Estimates




The
preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of assets and liabilities,
revenues and expenses, and disclosures regarding contingent assets and
liabilities. Actual results could differ from those estimates. The most
significant estimates used in the Company’s financial statements affect revenue
and cost recognition, the allowance for doubtful accounts, self-insurance
accruals, deferred tax assets, warranty accruals, and the quantification of fair
value for reporting units in connection with the Company’s goodwill and other
long-lived asset impairment testing.




Concentrations
of Credit Risk




The
Company provides services in a broad range of geographic regions. The Company’s
credit risk primarily consists of receivables from a variety of customers
including general contractors, property owners and developers, and commercial
and industrial companies. The Company regularly reviews its accounts receivable
and estimates an allowance for uncollectible amounts. The Company has a diverse
customer base, with no single customer accounting for more than 1% of
consolidated revenues for the year ended December 31, 2007.




Reclassifications




Certain
reclassifications have been made in prior period financial statements to conform
to current period presentation.




3
- INVENTORY




Inventory
consists of the following as of:




December
      31, 2007
            
            
            December
      31, 2006Raw
      materials
            
            $
            6,451
            
            
            $
            3,173Work
      in progress
            
            
            —
            
            
            
            —Finished
      goods
            
            
            617,156
            
            
            
            551,664$
            623,607
            
            
            $
            554,837




4
- SHARE EXCHANGE REVERSE ACQUISITION




On
February 22, 2006, effective March 1, 2006, the Share Exchange Agreement between
WWMO, BVI, and BVI's two stockholders closed. As a result of the exchange, BVI
became a wholly owned subsidiary of WWMO and BVI's two stockholders increased
their ownership of WWMO to 79,792,001 shares of common stock and 796,869 shares
of preferred stock, representing 81% of WWMO's outstanding common stock and
preferred stock after the exchange. Also, BVI's two stockholders were elected as
directors and appointed as officers of WWMO. Accordingly, BVI has been
considered the acquirer for accounting purposes and "reverse acquisition"
accounting has been used in the accompanying consolidated financial statements.
Since WWMO had nominal assets and operations, the Share Exchange was treated as
a capital transaction and recapitalization by the accounting acquirer (BVI) and
no goodwill was recorded.




F-10




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




The
identifiable net assets of WWMO at March 1, 2006 (effective date of the Share
Exchange) consisted of:




Cash
      and cash equivalents
            
            $
            98,382Other
      receivable
            
            
            1,500Motion
      picture and television properties
            
            
            100,000Equipment
            
            
            34,276Total
      assets
            
            
            234,158Notes
      payable
            
            
            23,954Accounts
      payable
            
            
            4,651Total
      liabilities
            
            
            28,605Identifiable
      net assets
            
            $
            205,553




The
operating results of WWMPC have been included in the accompanying consolidated
financial statements from March 1, 2006 (effective date of the Share Exchange).
Had the acquisition occurred January 1, 2006, pro forma net sales, net loss, and
diluted loss per share for the years ended December 31, 2006 would be
$6,273,685, $(1,024,384), and $(.01), respectively. The pro forma information is
not necessarily indicative of the results that would have been reported had the
acquisition actually occurred on January 1, 2006, nor is it intended to project
results of operations for any future period.




5 - ACQUISITIONS




ENERGY
KING, INC.




On
September 28, 2006, effective September 30, 2006, BVI acquired 100% of the
outstanding stock of Energy King, Inc. ("EKI") for $3,900,000 in notes payable
with no cash consideration. EKI, a California corporation incorporated on
February 3, 1988 as I. T. E. S. Service Corp, which changed its name to Energy
King in December 2005, services and installs heating, cooling, and indoor air
quality systems for primarily residential customers located in the Sacramento,
California area.





The
purchase price was subject to a Purchase Price Adjustment Amount reduction (not
to exceed $1,900,000) equal to 5 times the EBIT (income before interest income,
extraordinary gains, gains from the sale of assets other than inventory sold in
the ordinary course of business, interest expense, and income taxes) Deficit
(amount less than the $700,000 EBIT target) for the year ended December 31, 2007
(the First Measurement Period), or if elected by the EKI Stockholders’
Representative, for the year ended December 31, 2008 (the Second Measurement
Period). In accordance with SFAS No. 141, the $1,900,000 “contingent
consideration” portion of the $3,900,000 total purchase price was not initially
included in the recorded cost of the acquisition or the recorded notes payable.
On November 15, 2007, the Company executed amendments to the agreement with the
two sellers of EKI. Pursuant to the amendments, the parties agreed to deem the
Purchase Price Adjustment Amount to be $0 and agreed to extend the maturity date
of the $3,300,000 outstanding notes payable (including the $1,900,000 considered
to be “contingent consideration” at December 31, 2006) to January 31, 2011.
Pursuant to SFAS
No. 15, “Accounting by Debtors and
Creditors for Troubled Debt Restructurings,”the Company is accreting the $1,900,000 increase in
notes payable to interest expense using the interest method over the remaining
38.5 month term of the notes.





The
identifiable net assets of EKI at September 30, 2006 (effective date of the
acquisition) consisted of:




Cash
      and cash equivalents
            
            $
            82,944Accounts
      receivable, net
            
            
            219,446Other
      receivables
            
            
            4,259Inventory
            
            
            82,590Prepaid
      expenses and other current assets
            
            
            82,177Property
      and equipment, net
            
            
            78,490Intangible
      assets, net
            
            
            83,668Other
      assets
            
            
            55,107Accounts
      payable
            
            
            (497,726
            )Accrued
      expenses payable
            
            
            (93,622
            )




F-11




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




Customer
      deposits and deferred revenue
            
            
            (13,197
            )Debt
            
            
            (443,201
            )Identifiable
      net assets
            
            $
            (359,065
            )




Goodwill
of $2,359,065 (excess of the $2,000,000 purchase price, excluding the $1,900,000
contingent consideration, over the identifiable net assets of EKI) was recorded
in September 2006.




Two notes
payable were executed in effecting the acquisition of EKI. Following is a
summary of the terms of each note.




Promissory
Note payable to Varin Larson and Deanna Larson in the amount of $2,925,000 with
interest payable at 5% commencing with acquisition. The $1,500,000 convertible
portion (of which $100,000 was converted into 500,000 shares of ENKG common
stock in June 2007) is convertible into shares of ENKG common stock at a
conversion rate of $.25 per share until the amended maturity date of January 31,
2011. The interest on the convertible portion is accrued and payable at any time
up to maturity date and may be paid in common stock at the Company's election.
The note may be paid by the Company in part or in full at anytime without
penalty. The note holder is indemnified against any actions taken by the Company
which would otherwise reduce the initial share value adjusted for any repayments
up to that action.





Promissory
Note payable to Alan Hardwick in the amount of $975,000 with interest payable at
5% commencing with acquisition. The $500,000 convertible portion was converted
into 2,500,000 shares of ENKG common stock in June 2007. The interest on the
convertible portion is accrued and payable at any time up to maturity date and
may be paid in common stock at the Company's election. The note may be paid by
the Company in part or in full at anytime without penalty. The note holder is
indemnified against any actions taken by the Company which would otherwise
reduce the initial share value adjusted for any repayments up to that
action.





BARNETT
HEATING AND AIR CONDITIONING SERVICES, INC.




Effective
January 2, 2007, EKI acquired certain assets of Barnett Heating and Air
Conditioning Services, Inc. (“Barnett”) for $300,000 cash and 600,000 shares of
ENKG common stock (valued at $150,000). Barnett was a heating and air
conditioning service company specializing in the Modesto, California residential
market.





The
identifiable net assets of Barnett at January 2, 2007 (effective date of the
acquisition) acquired by EKI consisted of:





Inventory
            
            $
            40,533Property
      and equipment
            
            
            82,650Customer
      deposits
            
            
            (47,381
            )Identifiable
      net assets
            
            $
            75,802





Goodwill
of $374,198 (excess of the $450,000 purchase price over the $75,802 identifiable
net assets of Barnett acquired) was recorded in January 2007.





The Asset
Purchase Agreement provided that in the event the fair market value on December
31, 2007 of the 600,000 shares of ENKG common stock was less than $150,000, then
EKI shall pay or cause ENKG to pay the Deficit. The agreement further provided
that the Deficit may be paid in cash, shares of ENKG common stock, or any
combination thereof. The Company determined the Deficit to be approximately
$102,000 and accordingly increased goodwill and accrued expenses payable by
$102,000 at December 31, 2007.




F-12





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




6 - PROPERTY AND
EQUIPMENT




Property
and equipment consists of:




December
      31,
              2007
            
            
            December
      31,
              2006Computers
      and equipment
            
            $
            333,735
            
            
            $
            165,438Vehicles
            
            
            455,656
            
            
            
            259,574Leasehold
      improvements
            
            
            156,356
            
            
            
            126,792Motion
      picture and television properties
            
            
            100,000
            
            
            
            100,000Total
            
            
            1,045,747
            
            
            
            651,804Accumulated
      depreciation and amortization
            
            
            (400,119
            )
            
            
            (236,760
            )Property
      and equipment, net
            
            $
            645,628
            
            
            $
            415,044




Depreciation
expense of $150,822 and $63,635 was recorded for the years ended December 31,
2007 and 2006, respectively.




7 - OTHER LONG LIVED
ASSETS




Motion
Picture and Television Properties




Motion
picture and television properties consist of films and television programs
acquired by WWMPC. The majority of WWMPC's motion picture and television
properties were acquired from third parties in exchange for WWMO Common Stock
and WWMO Preferred Stock. The $6,260,550 initial estimated fair value of
the properties at March 1, 2006 (effective date of the Share Exchange) was
subsequently independently valued and reduced to $100,000. In conjunction with
an independent valuation of the motion picture and television properties, the
estimated fair value at March 1, 2006 was determined according to SFAS
No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets and SFAS No. 139,
Accounting by Producers or
Distributors of Films by using future cash flows of the respective
properties based on historical results and managements’ estimates of future net
revenues. Actual future revenues from the properties may differ materially from
such estimates as a result of many factors, including the amount of capital
available to effectively exploit the properties.




8
- GOODWILL




In most
businesses the Company has acquired, the consideration paid to buy the business
was greater than the value of specifically identifiable net assets in the
business. Under generally accepted accounting principles, this excess is termed
goodwill and is recognized as an asset at the time the business is acquired. It
is generally expected that future net earnings from an acquired business will
exceed the goodwill asset recognized at the time the business is bought. Under
previous generally accepted accounting principles, goodwill was required to be
amortized, or regularly charged to the Company’s operating results in its
statement of operations.




SFAS
No. 142, “Goodwill and Other Intangible Assets” requires companies to
assess goodwill asset amounts for impairment each year, and more frequently if
circumstances suggest an impairment may have occurred. Impairment must be
reflected when the value of a given business unit in excess of its tangible net
assets falls below the goodwill asset balance carried for that unit on the
Company’s books. If other business units have had increases in the value of
their respective goodwill balances, such increases may not be recorded under
SFAS No. 142. Accordingly, such increases may not be netted against
impairments at other business units.




The
Company currently performs its annual impairment testing as of December 31
and any impairment charges resulting from this process are reported in the
fourth quarter. The Company segregated its operations into reporting units based
on the degree of operating and financial independence of each unit and the
Company’s related management of them. These reporting units are tested for
impairment by comparing the unit’s fair value to its carrying
value.





The fair
value of each reporting unit was estimated using a discounted cash flow model
combined with market valuation approaches. Significant estimates and assumptions
are used in assessing the fair value of reporting units. These estimates and
assumptions involved future cash flows, growth rates, discount rates, weighted
average cost of capital and estimates of market valuations for each of the
reporting units.




The
Company has not recorded goodwill impairment charges for the years ended
December 31, 2007 and 2006.




F-13




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2007
(Unaudited)




The
changes in the carrying amount of goodwill for the years ended December 31,
2006 and 2007 are as follows:




Goodwill balance as of December 31, 2005
            
            $
            —Goodwill
      related to share exchange with WWMP (see note 4)
            
            
            —Goodwill
      related to acquisition of EKI (see note 5)
            
            
            2,359,065Impairment
      adjustment
            
            
            —Goodwill
      balance as of December 31, 2006
            
            $
            2,359,065Goodwill
      related to acquisition of Barnett assets (see note 5)
            
            
            476,198Impairment
      adjustment
            
            
            —Goodwill
      balance as of December 31, 2007
            
            $
            2,835,263




9 - NOTES PAYABLE AND LONG-TERM
DEBT




Notes
payable and long-term debt consist of:




December
      31,
              2007
            
            
            December
      31,
              2006ENKG
      Convertible Debenture payable to Trafalgar at an effective interest rate
      of 13.2% for 30 months, payable in monthly installments of principal and
      interest plus an effective redemption charge of approximately 15.8%
      through December 29, 2009. Net of unamortized discounts of $125,159 and
      $0.00, respectively
            
            $
            1,344,841
            
            
            $
            -ENKG
      note payable to Pedersen Family Trust at 5% interest for 5 months, payable
      in monthly installments of principal and interest through February,
      2008.
            
            
            14,478
            
            
            
            130,215ENKG
      note payable to investor at 24% interest with principal and accrued
      interest due by December 31, 2007, secured by certain corporate
      assets.
            
            
            -
            
            
            
            162,530ENKG
      note payable through acquisition to investor at 5.00% interest with
      interest payments beginning October 1, 2006 with all principal and accrued
      interest due by January 31, 2011, secured by certain corporate
      assets.  (Net of unamortized discount of $1,381,330 and $0,
      respectively.)
            
            
            1,443,670
            
            
            
            1,500,000ENKG
      note payable through acquisition to investor at 5.00% interest with
      interest payments beginning October 1, 2006 with all principal and accrued
      interest due by January 31, 2011, secured by certain corporate
      assets.  (Net of unamortized discount of $460,444 and $0,
      respectively.)
            
            
            14,556
            
            
            
            500,000ENKG
      multiple twelve month notes payable to investor at 10% maturing in October
      and December 2008.
            
            
            200,000
            
            
            
            150,000ENKG
      twelve month note payable to investor at 12% on loan from October 31, 2006
      maturing October 31, 2008.
            
            
            100,000
            
            
            
            100,000ENKG
      note payable to related party at 24% interest due by December 31,
      2008.
            
            
            25,000
            
            
            
            -HACS
      note payable at 9.55% interest with principal and interest payments of
      $596 through November 7, 2010, secured by truck vehicle.
            
            
            18,142
            
            
            
            23,290HACS
      note payable at 9.39% interest in monthly installments of principal of
      $579 through December 12, 2010, secured by truck vehicle.
            
            
            18,109
            
            
            
            23,100HACS
      note payable at 10.95% interest in monthly installments of principal and
      interest of $349 through July 4, 2011, secured by truck
      vehicle.
            
            
            12,284
            
            
            
            14,966HACS
      note payable at 9.49% interest in monthly installments of principal and
      interest of $472 through August 9, 2011, secured by truck
      vehicle.
            
            
            17,380
            
            
            
            21,193HACS
      note payable at 9.49% interest in monthly installments of principal and
      interest of $404 through August 29, 2011, secured by truck
      vehicle.
            
            
            14,902
            
            
            
            18,171HACS
      note payable at 11.75% interest in monthly installments of principal and
      interest of $427 through March 26, 2112, secured by truck
      vehicle.
            
            
            17,080
            
            
            
            -HACS
      note payable at 11.76% interest in monthly installments of principal and
      interest of $513 through April 26, 2112, secured by truck
      vehicle.
            
            
            20,836
            
            
            
            -




F-14




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007





EKI
      note payable at 5.00% interest for 24 months, beginning October 1, 2006,
      due October 2008.
            
            
            24,145
            
            
            
            38,921EKI
      note payable to Tri-County Bank at 9.05% interest for 55 months payable in
      monthly installments of principal and interest of $831 through January 19,
      2011, secured by truck vehicle.
            
            
            26,423
            
            
            
            33,648EKI
      note payable to River City Bank at 4.87% interest for 60 months payable in
      monthly installments of principal and interest of $350 through November
      2010, secured by truck vehicle.
            
            
            11,408
            
            
            
            14,968EKI
      note payable to the California Department of Toxic Substances Control in
      settlement of legal action.
            
            
            -
            
            
            
            12,561EKI
      note payable to the California Air Resources Board in settlement of legal
      action.
            
            
            -
            
            
            
            9,648EKI
      note payable to the Sacramento County District Attorney’s Office in
      settlement of legal action.
            
            
            37,357
            
            
            
            55,990EKI
      note payable to GMAC at 5.9% interest for 48 months payable in monthly
      installments of principal and interest of $631 through July
      2008.
            
            
            24,666
            
            
            
            -EKI
      note payable to GMAC at 5.9% interest for 48 months payable in monthly
      installments of principal and interest of $631 through July
      2008.
            
            
            24,666
            
            
            
            -WWMPC
      payable to bank under revolving line of credit, interest at 8%, due in
      monthly installments of principal and interest, secured by personal
      guarantees of WWMPC officers.
            
            
            2,201
            
            
            
            4,591WWMPC
      note payable, interest at 0% interest, due on demand.
            
            
            20,750
            
            
            
            17,000Total
            
            
            3,432,894
            
            
            
            2,830,792Less
      current portion
            
            
            (922,096
            )
            
            
            (637,500
            )Long-term
      debt
            
            $
            2,510,798
            
            
            $
            2,193,292





At
December 31, 2007, the Convertible Debenture balance consists of:





Principal
      outstanding
            
            $
            1,470,000Debt
      discounts attributable to the value of warrants issued to lender,less
      accumulated amortization of $31,291
            
            
            (125,159
            )Balance,
      net of unamortized discounts
            
            $
            1,344,841





In
connection with the private Securities Purchase Agreement with Trafalgar Capital
Specialized Investment Fund, a Luxembourg corporation (“Trafalgar”) dated June
29, 2007 (the “Agreement”) (see Note 10), the Company agreed to grant Trafalgar
warrants to purchase 1,250,000 shares at $0.001 per share and 50,000 warrants to
purchase shares of common stock at each of the first, second and third closing
for each $100,000 in Debentures, exercisable at the lower of $0.07 per share or
the closing bid price of the Registrant’s common stock on the date prior to the
issuance of each warrant. All of the warrants are exercisable for a period of 5
years from the date of issuance. At the first closing of $1,500,000 in September
2007, the Company issued Trafalgar 1,250,000 warrants exercisable at a price of
$.001 per share (valued at $106,125) and 750,000 warrants exercisable at a price
of $.07 per share (valued at $50,325).





In
accordance with Emerging Issues Task Force Issue 00-27, Application of Issue No.
98-5 to Certain Convertible Instruments ("EITF - 00-27"), and EITF 00-19,
“Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Company’s Own Stock” the Company recognized the $156,450 total
value attributable to the warrants as an increase in additional paid-in capital
and a discount against the Debenture.





The
Company valued the warrants in accordance with EITF 00-27 using the
Black-Scholes pricing model and the following assumptions: contractual terms of
five years, an average risk free interest rate of 4.5%, a dividend yield of 0%
and volatility of 100%.





10 -
CONVERTIBLE DEBENTURE





The
Company entered into a private Securities Purchase Agreement with Trafalgar
Capital Specialized Investment Fund, a Luxembourg corporation (“Trafalgar”)
dated June 29, 2007 (the “Agreement”). Pursuant to the Agreement, the Company
agreed to issue to Trafalgar a 10% Secured Convertible Debenture (the
“Debenture”) in the aggregate amount of $5,000,000, to be funded as follows (i)
$1,500,000 on the first closing; $1,750,000 on the second closing; and
$1,750,000 on the third closing.




F-15




ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




In
September 2007, the first closing for $1,500,000 occurred. In addition to
interest at 10%, the Agreement (as amended) also provides commencing December
2007, for the Company’s monthly payment of principal (totals of $30,000 in 2007,
$480,000 in 2008 and $990,000 in 2009) and redemption premiums (totals of $1,800
in 2007, $63,600 in 2008, and $251,400 in 2009) equal to 6% of principal
payments in December 2007 and 1% increases each month thereafter until the
Debenture is satisfied in full.





The
Company, at its option, has the right to redeem a portion or all of the
Debenture (provided that the last trading day’s closing bid price of ENKG common
stock is below $0.20 per share) at 120% of the amount redeemed.





The
Debenture is secured by the Company’s assets. In addition, the two principal
shareholders of the Company, co-founders, each pledged 17,857,143 million shares
of common stock which represents more than 50% of their common stock holdings.
The Debenture is convertible into shares of the Company’s common stock at the
lower of $0.20 per share or an amount equal to eighty-five percent (85%) of the
lowest volume weighted average price (“VWAP”) during the ten trading days
immediately preceding the conversion only if the closing bid price or the VWAP
for the Common Stock is at or above $0.20 per share. In the event the Company
defaults on any of its obligations under the Agreement, Trafalgar is entitled,
at its option, to convert the Debenture, plus accrued interest, into shares of
the Registrant’s common stock, even if the closing price or VWAP is less than
$0.20 per share.




In
connection with the Agreement, the Company agreed to grant Trafalgar warrants to
purchase 1,250,000 shares at $0.001 per share and 50,000 warrants to purchase
shares of common stock at each of the first, second and third closing for each
$100,000 in Debentures, exercisable at the lower of $0.07 per share or the
closing bid price of the Company’s common stock on the date prior to the
issuance of each warrant. All of the warrants are exercisable for a period of 5
years from the date of issuance.




The
Company has agreed to register the shares of Common Stock underlying the
conversion of the Debentures and the exercise of the warrants, subject to the
provisions of Rule 415 under the Securities Act of 1933. The Investor
Registration Rights Agreement provides that in the event that the Registration
Statement is not declared effective by the Securities and Exchange Commission
(the “SEC”) on or before the Scheduled Effective Date (December 20,2007, as
amended) the Company is to pay Trafalgar as liquidated damates an amount equal
to 2% of the outstanding balance for each 30 day period (or any part thereof)
after December 20, 2007 that the Registration Statement is not declared
effective by the SEC. On December 6, 2007, the Company filed a Registration
Statement with the SEC. On February 14, 2008, the Company filed an amendment to
the Registration Statement in response to a SEC comment letter. As of March 31,
2008, failure to cause the Registration Statement to be declared effective has
resulted in total potential liquidated damages of $120,000 ($30,000 on December
20, 2007, $30,000 on Janary 20, 2007, $30,000 on February 20, 2007, and $30,000
on March 20, 2008). At December 31, 2007, the Company has included $30,000 in
accrued expenses (which was charged to interest expense) in the consolidated
balance sheet to reflect the liability at that date.




11
- ACCRUED EXPENSES PAYABLE




Accrued
expenses payable consisted of:




December
      31,
              2007
            
            
            December
      31,
              2006Compensation
      of officers
            
            $
            287,117
            
            
            $
            225,000Other
      compensation, payroll taxes and withholdings
            
            
            188,581
            
            
            
            142,698Interest
            
            
            222,314
            
            
            
            71,645Warranty
      reserve
            
            
            81,583
            
            
            
            66,582Liability
      related to acquisition
            
            
            102,000
            
            
            
            ---Other
            
            
            193,705
            
            
            
            87,156Total
            
            $
            1,075,300
            
            
            $
            593,081




12
- EMPLOYEE BENEFIT PLANS




The
Company provides a qualified deferred arrangement 401(k) plan whereby employees
may contribute up to 25% of gross compensation to the plan. The Company has the
option to match employee contributions up to 4% of the employees’ wages. There
were no Company contributions during the years ended December 31, 2007 and
2006.




F-16





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




13 - PREFERRED STOCK




From 1988
to 2003, WWMO issued different series of preferred stock, some $.01 par value
and some $10.00 par value, to acquire motion picture and television properties
and to compensate for services. The preferred stock ranks senior to the common
stock in respect of dividends and liquidation rights. Shares of preferred stock
are nonvoting and are not entitled to mandatory dividends. Some series of
preferred stock are convertible into common stock; other series are
not.




On
February 22, 2006, effective March 1, 2006 and pursuant to the Share Exchange
Agreement, WWMO issued 796,869 shares of preferred stock, $.01 par value,
designated Series 06-W, to BVI's two stockholders.





At
December 31, 2007 and 2006, preferred stock consisted of:




Series
            
            Number
      of Shares of
              Preferred
      Stock
            
            
            Number
      of Shares of
              Common
      Stock
              Convertible
      Into$.01
      Par Value:89-B
            
            
            717
            
            
            
            2,86891-C
            
            
            1,000
            
            
            
            4,00092-D+E
            
            
            26,000
            
            
            
            104,00094-F
            
            
            50,000
            
            
            
            20,00094-G
            
            
            1,000
            
            
            
            40094-H+I
            
            
            7,500
            
            
            
            30,00096-J
            
            
            15,000
            
            
            
            30,00099-K
            
            
            10,000
            
            
            
            -00-L
            
            
            25,000
            
            
            
            50,00001-O
            
            
            28,000
            
            
            
            -03-U
            
            
            14,000
            
            
            
            14,00006-W
            
            
            796,869
            
            
            
            -$.01
      par value total
            
            
            975,086
            
            
            
            255,268




$10.00
      Par Value:88-A
            
            
            20,000
            
            
            
            4,00001-P
            
            
            2,000
            
            
            
            -03-V
            
            
            1,000
            
            
            
            -$10.00
      par value total
            
            
            23,000
            
            
            
            4,000Total
      Preferred Stock
            
            
            998,086
            
            
            
            259,268




14 - COMMON STOCK




On June
28, 2007, the Company issued a total of 3,000,000 shares of its common stock to
the two former Energy King, Inc. (EKI) stockholders. 2,500,000 shares were
issued to one of the former EKI stockholders in satisfaction of $500,000 in
notes payable to him and 500,000 shares of the Company’s common stock were
issued to the other former EKI stockholder in satisfaction of $100,000 in notes
payable to this joint tenancy.




On June
28, 2007, the Company issued a total of 2,040,000 Units of the Company’s
securities to five investors in satisfaction of $510,000 in notes payable to
such investors. Each Unit is comprised of one share of the Company’s common
stock and three warrants, each warrant exercisable into one share of common
stock at a price of $0.05 per share and expiring at dates ranging from June 21,
2008 to September 14, 2008.




F-17





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




On March
31, 2007, the Company issued 400,000 shares of its common stock to an investor
it was indebted to under a note payable in the amount of $162,530 at December
31, 2006. Pursuant to a verbal agreement, the note payable to this investor was
to be reduced by amounts realized from this investor’s sale of the 400,000
shares. Through September 30, 2007, this investor sold 160,900 shares of the
Company’s common stock for net proceeds of $21,025. In October 2007, the Company
repaid the remaining balance due this investor less an agreed reduction of
$23,910 for the 239,100 unsold shares.





On
January 8, 2007, the Company issued 1,000,000 shares of its common stock to
WWMPC. Since WWMPC is a wholly owned subsidiary of ENKG, this transaction was
not reflected at the date of issuance. In the three months ended June 30, 2007,
WWMPC delivered 230,000 of the 1,000,000 shares to third parties for
certain services to be rendered to WWMPC. The Company has reflected the $23,000
estimated fair value of the 230,000 shares of its common stock as an increase in
selling, general and administrative expenses.




In April
and May 2006, ENKG sold 1,980,000 restricted shares of ENKG Common Stock
(provided by the two former BVI stockholders) to 11 accredited investors at a
price of $.25 per share, or $495,000 total. The related subscription agreements
provided that in the event the market value of the shares sold are less than the
subscription amounts (based upon the average closing price of the shares during
the 30 day period 12 months from the date of the subscribers' receipt of the
shares), the stockholders will issue the respective subscriber an additional
number of restricted shares so that the value of the subscriber's shares with
the additional shares will equal the subscriber's subscription amount. In March
2007, nine of the investors who own a total of 1,900,000 of these shares agreed
to accept 5,700,000 warrants in consideration of their waiver of the provision
requiring delivery of additional restricted shares to them. Each warrant is
exercisable into one share of common stock at a price of $0.05 per share and
expires at dates ranging from August 31, 2008 to September 14,
2008.




In June
2006, the Company issued 85,759 restricted shares of ENKG common stock for cash
and services. At December 31, 2005, WWMO had 29,170,152 shares of common stock
issued and outstanding.




In
January 2006 and February 2006, prior to closing of the Share Exchange Agreement
on February 22, 2006 (effective March 1, 2006), WWMO authorized the issuance of
277,859 shares of common stock to nine individuals for cash considerations and
services rendered and authorized the cancellation of 1,500,000 shares of common
stock issued in year 2004 to an individual pursuant to a transaction that was
rescinded. Also, the principal stockholder and an officer and director of WWMO
returned 7,677,153 shares of common stock to the treasury to accommodate the
Share Exchange Agreement. Accordingly, prior to closing of the Share Exchange
Agreement on February 22, 2006 (effective March 1, 2006), WWMO had 20,270,858
shares of common stock issued and outstanding (including 1,600,000 shares
purchased by BVI in October 2005 in the name of BVI's two
stockholders).





On
February 22, 2006 (effective March 1, 2006), the Share Exchange Agreement closed
and WWMO authorized the issuance of an additional 78,192,001 shares of common
stock to BVI's two shareholders. Accordingly, after closing of the Share
Exchange Agreement, ENKG had 98,462,859 shares of common stock issued and
outstanding.




On
February 22, 2006, as a result of the closing of the Share Exchange Agreement,
the two BVI stockholders authorized the delivery of a total of 6,142,742 shares
of WWMO common stock (provided by the two former BVI stockholders) to nine
investors who paid BVI a total of $455,000 ($405,000 in year 2005, $50,000 on
February 16, 2006) for WWMO shares of common stock in the event that the Share
Exchange Agreement closed. BVI recorded this transaction as a $455,000 reduction
in the conditional stock subscription receipts liability, a $80,000 reduction in
investment in WWMO, and a $375,000 increase in its additional paid-in
capital.




15 - INCOME TAXES




ENKG
files a consolidated income tax return with its subsidiaries for federal
reporting purposes with subsidiaries filing separate income tax returns for
state reporting purposes.




The
provision for income taxes consists of the following:




December
      31,
              2007
            
            
            December
      31,
              2006Current—Federal
            
            $
            —
            
            
            $
            —State
            
            
            4,924
            
            
            
            10,599Total
      current
            
            
            4,924
            
            
            
            10,599




F-18





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




Deferred—Federal
            
            
            (335,718
            )
            
            
            (315,706
            )State
            
            
            (85,861
            )
            
            
            (80,743
            )Valuation
      allowance
            
            
            421,579
            
            
            
            396,449Total
      deferred
            
            
            —
            
            
            
            —Total
      income taxes
            
            $
            4,924
            
            
            $
            10,599




A
reconciliation of the expected income tax expense (benefit) to reported income
taxes follows:




December
      31,
              2007
            
            
            December
      31,
              2006Federal
      income tax at 34%
            
            
            (364,910
            )
            
            
            (343,159
            )State
      income tax, net
            
            
            (51,745
            )
            
            
            (42,691
            )Change
      in valuation allowance
            
            
            421,579
            
            
            
            396,449Total
            
            $
            4,924
            
            
            $
            10,599




Management
has not determined it to be more likely than not that any portion of the
deferred tax asset attributable to the future utilization of the net operating
loss carryforwards as of December 31, 2007 will be realized. Accordingly, the
Company has provided a 100% allowance against the deferred tax asset in the
financial statements at December 31, 2007. The Company will continue to review
this valuation allowance and make adjustments as appropriate. The
net operating loss carryforwards are available in varying amounts through
year 2027 to offset future taxable income. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income will be limited.




16 - COMMITMENTS AND
CONTINGENCIES




Operating
leases:




ENKG
leased its office space (approximately 400 square feet) under a
non-cancelable lease agreement executed June 12, 2006 and which expired December
31, 2007. The lease has been continued as a month-to-month lease agreement
executed on January 3, 2008. The lease provides for monthly rental payments of
$2,038.




HACS
leases its office space (approximately 12,000 square feet) under a
non-cancelable lease agreement executed January 26, 2005 with a lessor partially
owned by the General Manager of HACS. The lease provides for monthly rental
payments of $7,500 through January 2010. EKI leases its office space
(approximately 4,000 square feet) under a month-to-month lease with a rental of
$2,700 per month at Sacramento and $1,800 per month for its Riverbank
operations, and negotiations are underway to extend the leases. WWMPC leases its
office space under a one year lease expiring December 2007 at rentals of $776
per month and has been extended on a month-to-month basis. HACS leases truck
vehicles under month to month lease agreements.




For the
years ended December 31, 2007 and December 31, 2006, rent expense under
operating leases consisted of:




December
      31,
              2007
            
            
            December
      31,
              2006ENKG
      Corporate office space
            
            $
            24,616
            
            
            $
            12,827HVAC
      office space
            
            
            87,750
            
            
            
            107,267HVAC
      truck vehicles
            
            
            120,479
            
            
            
            53,360WWMPC
      office space
            
            
            10,888
            
            
            
            7,785Total
            
            $
            243,733
            
            
            $
            181,239





F-19





ENERGY
KING, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007




At
December 31, 2007, the aggregate future minimum lease payments under
non-cancelable operating lease agreements were as follows:




Year
      Ended
              December
      31,2008
            
            $
            152,0752009
            
            
            137,3262010
            
            
            27,0142011
            
            
            4,7982012
            
            
            —Total
            
            $
            321,213




Employment
Agreements:




On
February 10, 2006, BVI executed employment agreements with its two stockholders
to continue to serve as chief executive officer and treasurer, respectively. The
initial term of both agreements was four years and both are automatically
renewable for successive one year periods unless cancelled by either BVI or the
respective officer. Both agreements provide for annual salaries to be determined
and to be reviewed by the Board of Directors not less frequently than
annually.




On
February 22, 2006 (effective March 1, 2006), BEYV executed an amended employment
agreement with Paul Hancock to serve as Vice-Chairman of BEYV's Board of
Directors and as chief executive officer of WWMPC. The amended agreement expires
March 1, 2012 and provides for an annual salary of $90,000 in the year ended
March 1, 2007, with at least $20,000 per year increases for each year
thereafter.





On
September 28, 2006, BEYV executed an employment agreement with Alan Hardwick to
serve as President of EKI. The agreement expires August 31, 2008 and provides
for an annual salary of $165,000.




On
September 28, 2006, BEYV executed an employment agreement with Varin Larson to
serve as Vice President of EKI. The agreement expires August 31, 2008 and
provides for an annual salary of $165,000.




Contingency:




Claims
and Lawsuits




The
Company is subject to certain claims and lawsuits arising in the normal course
of business. The Company maintains various insurance coverages to minimize
financial risk associated with these claims.




The
Company has estimated and provided accruals for probable losses and related
legal fees associated with certain of its litigation in the accompanying
consolidated financial statements. While the Company cannot predict the outcome
of these proceedings, in management’s opinion and based on reports of counsel,
any liability arising from these matters individually and in the aggregate will
not have a material effect on the Company’s operating results or financial
condition, after giving effect to provisions already recorded.


F-20
  ENERGY
KING, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2007


17 – SUBSEQUENT EVENTS




Effective
February 15, 2008, BEYV changed its name to ENKG to better reflect the scope of
services provided by the company.




On
February 29, 2008, ENKG entered into a merger agreement with Gallagher's Heating
& Air Conditioning, Inc., a California corporation ("Gallagher’s"), and
certain other parties pursuant to which a wholly owned Delaware subsidiary of
ENKG was merged on February 29, 2008 with and into Gallagher’s and ENKG became
the owner of 100% of the issued and outstanding shares of
Gallagher’s.  Pursuant to the merger agreement the shares of the
former sole stockholder of Gallagher’s were converted upon the effectiveness of
the merger into a combination of cash and promissory notes as follows: 1) a cash
payment of $500,000; 2)  a promissory note for $1,586,667; and
3) a convertible promissory note for $2,000,000;  for a total
consideration of $4,086,667.  Gallagher’s was the surviving
corporation in the merger and upon the effectiveness of the merger Gallagher’s
became a wholly-owned subsidiary of ENKG.




On February 29, 2008, ENKG entered into an employment
agreement with Tim Gallagher as its General Manger of Gallagher’s operations. The
term of the agreement is from February 29,
2008 through December 31, 2009 at an annual salary of
$150,000.
 
 On April 1, 2008, ENKG entered into an employment
agreement with its Vice President of Operations with an effective date of
January 1, 2008. The agreement runs through
December 31, 2009. His salary is set at $120,000 per year with a 5% minimum
annual increase each January 1 st . Pursuant to the agreement, the employee is
to receive 700,000 shares of ENKG common stock effective March 31, 2008 and
subject to completion of certain conditions be awarded stock
options to purchase up to 3,000,000 shares of ENKG common stock at prices
ranging from $0.25 to $0.50 per share.
 
 On April 1, 2008, ENKG entered into an employment
agreement with its Vice President andChief
Financial Officer with an effective date of January 1, 2008. The agreement runs
through December 31, 2009. His salary is set at $120,000 per year with a 5%
minimum annual increase each January 1 st . Pursuant to the agreement, the
employee is to receive 700,000 shares of ENKG common stock effective March
31, 2008 and subject to completion of certain conditions be awarded stock
options to purchase up to 3,000,000 shares of ENKG common stock at prices
ranging from $0.25 to $0.50 per share.
 
 On May 23,2008,
Mr. Jeffrey R. Hultman was appointed by the Board as CEO, pursuant to meetings
of Board members and executives, interviews by Board members and a Board vote
held May 17, 2008 for a term of two years. Mr. Hultman will receive cash
compensation for hisservices as CEO in the amount of $175,000
annually.  Cash compensation shall be accrued until a financing of at
least $2,000,000 (“Financing”) is completed. In addition, Mr. Hultman will receive
(1) employee stock options to purchase shares of the Company’s common stock pursuant to a to be approved Company
Stock Option Plan ("Plan"), with an exercise price equal to the closing price of
the Company’s common stock on the grant date of the option, as
reported by the OTC Bulletin Board, and (2) options to purchase shares of the
Company’s common stock equal to 5.0% of the outstanding Common
Shares after the Financing is completed. These options shall vest over a
three-year period with 1/12 of the total vesting on the last day of each quarter
starting from the Effective Date of the employment
agreement.  Vested shares subject to the options will be subject to
the terms and conditions of the Plan and any associated stock option
agreement.




F-21


ENERGY KING, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31,
2007
 
 
 Effective July 1, 2008, ENKG sold WWMPC for $1. The loss
on sale of WWMPC will be included in discontinued operations in the three months
ended September 30, 2008 and, excluding disputed items, is expected to approximate $45,758, as
follows:
  
 Sale price
              
              $
              1Net assets of WWMPC at June 30,
      2008:Cash and cash equivalents
              
              
              112,511Property and equipment, net
              
              
              80,504Accounts payable
              
              
              (3,025
              )Accrued expenses
              
              
              (21,880
              )Current portionof notes payable and long-term
      debt
              
              
              (18,641
              )Customer deposits and deferred
      revenue
              
              
              (140,000
              )Notes payable and long-term debt, net of current
      portion
              
              
              (3,750
              )Net assets
              
              
              5,719Fair value of 770,000 shares of ENKG common stock
      at July 1, 2008 (to be retained by
      WWMPC) (see note 12)
              
              
              40,040Expected loss on sale of
    WWMPC
              
              $
              (45,758
              )
   WWMPC and Paul Hancock have advised ENKG that ENKG is
and has been obligated to pay Paul Hancock a monthly salary (ranging from $9,166
to $15,833per month through February 28,
2012) pursuant to an amended Employment Contract dated March 1, 2006. WWMPC also
has advised ENKG that ENKG is and has been obligated to pay WWMPC a monthly
expense allowance ($6,500 per month through February 28, 2012) pursuant to an
Operating Agreement dated March 1, 2006. ENKG advised WWMPC and Paul Hancock
that, commencing January 1, 2008, ENKG was no longer responsible for such
payments. The total disputed amount at June 30, 2008, which has not been
accrued, is approximately $100,000. Further, WWMPC has advised ENKG that ENKG
is obligated to issue and deliver an additional 2,000,000 shares of ENKG common
stock to WWMPC pursuant to the Operating Agreement dated March 1, 2006 (which
ENKG disputes).
 
 On July 2, 2008, the Company issued 2,000,475 shares of its restricted common
stock in settlement of liabilities accrued at December 31,
2007.
 F-22
  ENERGY KING, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2007
 
 
 18–RESTATEMENT OF PREVIOIUSLY ISSUED
FINANCIAL STATEMENTS
 
 The Company has restated its consolidated financial
statements atDecember 31, 2007 and for the
yearthen ended (which were previously
included in the Company’s Form
10-KSB filed with the SEC onMarc 31, 2008) in order to correct an error relating to the
accounting for the November 15, 2007 amendments to the agreement with the two
sellers of EKI (see note 5).
 
 As previously reported, the Company recorded the
November 15, 2007resolution of the
$1,900,000contingent consideration (and extension of the maturity
date of the outstanding notes payable) relating to the EKI acquisition as a
$1,900,000 addition to goodwill and notes payable. As restated, pursuant to SFAS
No. 15, the Company reflected the $1,900,000 as a discount on the notes payable and has
accreted $58,226(of the $1,900,000) as interest expense for theperiod November 15, 2007 (date of
amendments) to December 31, 2007.
 
 The effect of the restatement adjustments on the
consolidated balance sheet atDecember 31, 2007follows:
 
 As Previously Reported
                
                
                Adjustments
                
                
                As RestatedASSETSTotal current assets
                
                $
                2,796,074
                
                
                $
                --
                
                
                $
                2,796,074Goodwill
                
                
                4,735,263
                
                
                
                (1,900,000
                )
                
                
                2,835,263Other non-current assets
                
                
                830,777
                
                
                
                --
                
                
                
                830,777Total assets
                
                $
                8,362,114
                
                
                $
                (1,900,000
                )
                
                $
                6,462,114LIABILITIES AND STOCKHOLDERS'
      EQUITYTotal current liabilities
                
                $
                3,487,835
                
                
                $
                --
                
                
                $
                3,487,835Notes payable and long-term debt, net of current
      portion
                
                
                4,352,572
                
                
                
                (1,841,774
                )
                
                
                2,510,798Total liabilities
                
                
                7,840,407
                
                
                
                (1,841,774
                )
                
                
                5,998,633Stockholders' equity
                
                
                (521,707
                )
                
                
                (58,226
                )
                
                
                (463,481
                )Total liabilities and stockholders'
      equity
                
                $
                8,362,114
                
                
                $
                (1,900,000
                )
                
                $
                6,462,114
 
 
 The effect of the restatement adjustments on the
consolidated statement of operations for the year ended December 31, 2007
follows:
 
 As Previously Reported
                
                
                Adjustments
                
                
                As RestatedOperating income(loss)
                
                $
                (600,218
                )
                
                $
                --
                
                
                $
                (600,218
                )Interest income
                
                
                13,614
                
                
                
                --
                
                
                
                13,614Other income
                
                
                44,117
                
                
                
                --
                
                
                
                44,117Interest expense
                
                
                (472,553
                )
                
                
                (58,226
                )
                
                
                (530,779
                )Income (loss) before income
      taxes
                
                
                (1,015,040
                )
                
                
                (58,226
                )
                
                
                (1,073,266
                )Income tax expense
                
                
                4,924
                
                
                
                --
                
                
                
                4,924Net income (loss)
                
                $
                (1,019,964
                )
                
                $
                (58,226
                )
                
                $
                (1,078,190
                )Income (loss) per share; basic and
      diluted
                
                $
                (.01
                )
                
                $
                (.00
                )
                
                $
                (.01
                )
 F-23


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




None.




ITEM
8A./8A(T)   CONTROLS AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures




As of the
end of the period covered by this Annual Report on Form 10-KSB, as required by
paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Securities Exchange Act of
1934, as amended, we evaluated under the supervision of our Chief Executive
Officer and our Chief Financial Officer, the effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended). Based on this evaluation, our
Chief Executive Officer and our Chief Financial Officer have concluded that our
disclosure controls and procedures are effective to ensure that information we
are required to disclose in reports that we file or submit under the Securities
Exchange Act of 1934 (i) is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms, and (ii) is accumulated and communicated to our management, including our
Chief Executive Officer and our Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. Our disclosure controls and
procedures are designed to provide reasonable assurance that such information is
accumulated and communicated to our management. Our disclosure controls and
procedures include components of our internal control over financial reporting.
Management’s assessment of the effectiveness of our internal control over
financial reporting is expressed at the level of reasonable assurance because a
control system, no matter how well designed and operated, can provide only
reasonable, but not absolute, assurance that the control system’s objectives
will be met.




Management
Report on Internal Control over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Internal control over financial reporting includes those
policies and procedures that (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the company, (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on the financial statements.




Management
assessed our internal control over financial reporting as of December 31, 2007,
which was the end of our fiscal year. Management based its assessment on
criteria established in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Management’s
assessment included evaluation of such elements as the design and operating
effectiveness of key financial reporting controls, process documentation,
accounting policies, and our overall control environment. This assessment is
supported by testing and monitoring performed by our finance
organization.




Based on
our assessment, management has concluded that our internal control over
financial reporting was effective as of the end of the fiscal year to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with generally accepted accounting principles. We reviewed the
results of management’s assessment with the Audit Committee of our Board of
Directors.




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




Changes
in Internal Control over Financial Reporting




During
the three months ended December 31, 2007, there was no change in our internal
control over financial reporting identified in connection with the evaluation
required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.




ITEM
8B.   Other Information




None.




57




PART III




ITEM 9.  DIRECTORS,
EXECUTIVE OFFICERS, CONTROL PERSONS AND CORPORATE GOVERNANCE




We have
adopted a code of ethics that applies to our principal executive officer, our
principal financial officer, and our principal accounting officer, as well as to
our other employees. The Company has made this code of ethics available on our
website, as described in Item 1 of this annual report on Form 10-KSB. If we
make substantive amendments to this code of ethics or grant any waiver,
including any implicit waiver, we will disclose the nature of such amendment or
waiver on our website or in a report on Form 8-K within four business days
of such amendment or waiver. The Company's Directors, Executive Officers and key
employees are listed below:




Name
            Age
            Group
            BOD
              Committee(s)
            Employed
              Position(s)
              W/Company
            With
              Buckeye
              SinceAlan
      J. Mintz
            58
            Director,
      Executive Team, Management Team
            Executive
      (Chair), Finance
            Chief
      Executive Officer & President
            2005Larry
      Weinstein
            59
            Director,
      Executive Team, Management Team
            Executive
            Executive
      Vice President, Secretary & Treasurer
            2005Stephen
      Kurz
            53
            Executive
      Team, Management Team
            
            Vice
      President Operations
            2006Henry
      S. Leonard
            51
            Executive
      Team, Management Team
            
            Vice
      President Finance, Chief Accounting Officer, Controller
            2006Alan
      Hardwick
            47
            Management
      Team
            
            General
      Manager, Energy King, Inc.
            2006Jim
      Papasodero
            49
            Management
      Team
            
            General
      Manager, Heating, Air Conditioning Services, Inc.
            2005Alfred
      R. Roach, Jr.
            63
            Director
            Chairman
      of the Board of Directors on all committees
            
            2006Randy
      Eakin
            45
            Director
            Audit
      (Chair),Finance
            
            2006Larry
      Epstein
            57
            Director
            Compensation-Nominating-Governance,Audit
            
            2006Paul
      Hancock
            50
            Director
            Executive,Finance,
      Compensation-Nominating-Governance (Chair)
            President,
      WWMPC
            2006Ron
      Smith
            69
            Director
            Compensation-Nominating-Governance,Finance
            
            2006Adam
      Taylor
            55
            Director
            Compensation-Nominating-Governance,Audit
            
            2006




58





Biographical
information for directors and executive officers:





Alan J. Mintz, age 58,
currently serves as our Chief Executive Officer and President. He was our
Chairman of the board of directors, CEO and President since inception in May
2005. On November 5, 2006, Mr. Alfred R. Roach was appointed Chairman, and Mr.
Mintz continues to serve as a Director. Alan Mintz provides Buckeye Ventures a
combination of operational and acquisitions-related experience that is virtually
unmatched in the industry today. Prior to joining Buckeye in 2005, Mr. Mintz was
a self employed consultant from 2003 through 2004. He gained this experience
while serving as an integral part of the senior management teams of both ARS and
Blue Dot Services, from 1990 to 2002, and it was this period that shaped his
insight regarding the shortcomings of traditional
Consolidation.  Moreover, it was while serving in these roles that he
came to fully appreciate the full potential that would be available to those
companies that could truly establish an effective national brand. In addition to
his duties with ARS and Blue Dot, Mintz served as president of Atlantic
Richfield's $30 million HVAC contracting division, and he founded Havsco Heating
and Air Conditioning, which became the largest residential and light commercial
HVAC company in the Cleveland area. Alan was founder of the Greater Cleveland
Air Conditioning Contractors Association. Alan's accomplishments include
involvement with more than 100 acquisitions on both the buy and sell
side.





Larry Weinstein, age 59, has
served as our Executive Vice President over Investor Relations since May 2005.
He has launched and developed with Alan Mintz, the business strategy and
organizational structure of Buckeye Ventures, Inc. From 2000 to 2005, Mr.
Weinstein was an independent contractor providing consulting and fund raising
services. From 1999 through 2000, Mr. Weinstein was Vice President of Strategic
Projects for Cybergold, Inc., a high technology public company in Oakland,
California. He was a senior executive involved in its successful Initial
Public Offering. He has been instrumental in securing investment capital for
Buckeye Ventures, Inc. and raised millions of dollars for other small technology
companies as well as handling their Investor Relations campaigns.





Stephan Kurz, age 53, has
served as our Regional Vice President since March 2006. Steve is instrumental in
locating prospective acquisition candidates, due diligence, and assimilating new
acquisitions into the Buckeye structure. Steve works with existing subsidiaries
of Buckeye to improve operations and increase sales. From January 2004 until
January 2006, Mr. Kurz served as General Manager of ARS, Inc. As General Manger
of American Residential Services, he was assigned the responsibility
of service center turn around. From November 2001 through December 2003, he
was certified as a Six Sigma Black Belt which teaches the implementation of
measurement-based strategies that focus on process improvements and variation
reductions. Mr. Kurz worked at Blue Dot Services as the East Coast Acquisitions
Manager in 1998 and 1999.





Henry S. Leonard, age 51,
serves as Chief Financial Officer and Chief Accounting Officer of Buckeye
Ventures, Inc. and has handled the duties of Corporate Controller since August
2006 and those of CFO since January, 2007. Henry was Chief Financial Officer and
director Global Health Trax from 2003 to 2006. He served as CFO and Director for
Nutri-Sport from 1999 to 2003. Prior to 2003, Mr. Leonard was self-employed as a
full time CPA. . He is a Certified Public Accountant licensed to practice
in California, Hawaii and Florida. He holds a Doctorate in Business
Administration, Master of Business Administration and is a Certified Management
Accountant. He is a member of the American Institute of Certified Public
Accountants, The Institute of Management Accountants, and the California and
Hawaii CPA societies. He is an adjunct faculty member of National University,
the University of Phoenix and DeVry University in finance and accounting. Henry
has maintained a public accounting practice since 1994 which currently occupies
approximately fifteen hours per week of his time.





Alfred R. Roach, Jr., age 63,
serves as Chairman of the Board of Buckeye Ventures, Inc. Alfred R. Roach, Jr.
brings Buckeye Ventures one of the most distinguished careers in the HVAC
industry.  From August 2004 to the present, Mr. Roach has been owner
and CEO of 20 Minutes To Fitness of Sarasota, Florida, Inc. From May 2000 to the
present, Mr. Roach has been a general partner in legal practice with Callahan,
Roach and Garofalo. Mr. Roach practiced law in Atlanta, Georgia, from 1972 until
1986 with Callahan, Roach and Associates before returning in 2000. His practice
focused on general corporate and commercial law, including corporate finance,
merger and acquisitions, with a heavy emphasis on franchise law. His franchise
practice included document preparation (franchise agreements and disclosure),
deal negotiations, compliance management, and franchisee relations and dispute
resolutions. As partner with Callahan/Roach & Garofalo, past president of
Encompass Services Mechanical Group from July 1997 to April 2000 and prior
president and general counsel for Service America Corporation from 1987 to 1989,
he offers a level of insight and practical understanding of the sector that few
can match.  Along with participating in the building and operation of
significant HVAC businesses himself, he has also been instrumental in the
development and dissemination of operational and pricing programs that have set
the standard for HVAC operations nationally.  He is widely sought-out
as a consultant on virtually all aspects of the business, and he is generally
regarded as one of the principal architects of the contemporary comfort services
industry.




59





Randy Eakin, age 45, serves as
a Director on the Board of Buckeye Ventures, Inc. Since 2006 he has been Chief
Financial Officer for Mini-Skool's Early Learning Centers. He was most recently
Senior Vice President and Chief Financial Officer for Swope Community
Enterprises from 2004 through 2005, which is a holding company with member
companies operating in the healthcare, real estate development and urban
planning industries. Swope had over $300 million of annual revenues and more
than 500 employees. Prior to Swope, Mr. Eakin served at the Director level at
P.F. Chang's China Bistro, Inc. in 2004, a national publicly held multi-unit
restaurant company operating two concepts in the Asian niche with annualized
revenues of $775 million and over 16,500 employees. Certain of his duties at
P.F. Chang's included matters of corporate finance, including the establishment
of formal processes and infrastructure for Sarbanes-Oxley compliance. Mr.
Eakin's background also includes high level positions at Sprint Nextel
Corporation from 1993 through 2003 and PriceWaterhouseCoopers from 1985 to1993
with extensive experience in the areas of auditing, risk management and
corporate financial planning and analysis.





Larry Epstein, 57, serves as a
Director on the Board of Buckeye Ventures, Inc. He is a practicing attorney in
Southern California.  He has been a sole practitioner since 1987
specializing in business, family and entertainment law. He was previously
involved for three years as Executive Vice President and in-house legal counsel
to Cherrystone Pictures, Inc., an independent feature film production company
based in Los Angeles, and in that capacity oversaw all corporate and
administrative fiduciary responsibilities of the company and orchestrated all
documentation for domestic and international co-ventures and related agreements.
Prior to his production company involvement, Mr. Epstein was a Senior Partner in
the Los Angeles-based law firm of Abouaf, Epstein, Meyers & Gronemeier,
specializing in business, tax, and entertainment law. He is a member of the
State Bar of California, San Fernando Valley Bar Association, Los Angeles County
Bar Association and The American Bar Association. Mr. Epstein has sat for 7
years as special referee and judge for the State Bar of California and is also
currently Judge Pro Tem for the Superior Court, State of California, County of
Los Angeles.





Paul Hancock, 57, serves as a
Director on the Board of Buckeye Ventures, Inc. He is the founder and developer
of World Wide Motion Picture's film/television production concept, and has
served as President and Chief Executive Officer of the company since its
inception in July of 1977. Prior to and during his tenure with the company, he
has functioned as a production and business advisor to various film financing
and production companies and has supervised the development/packaging and
production of a wide variety of moderately budgeted/cost-controlled feature film
and television projects. Mr. Hancock was responsible for leading one of the
first exploratory film finance teams to the Wall Street capital markets in the
late 1970's in order to develop and encourage motion picture financing by the
investment banking community. He was instrumental in the formulation of
entertainment industry relationships specifically in moderate budget
feature film production financing with companies such as E.F. Hutton & Co.;
Kidder, Peabody and Prudential-Bache Securities. Mr. Hancock has also been a
lecturer on various aspects of the entertainment industry, entrepreneurship and
finance at university graduate schools of business, seminars and conferences, is
a frequent radio talk show guest discussing independent film financing,
production and marketing, and is published in various print media encompassing
film and television industry topics. He has developed and maintained a
specialized expertise in and conducted diverse consulting for motion picture and
television financial packaging, specifically for public securities offerings,
private sector investments and commercial banking. He was previously
employed in a variety of management capacities in the theater and hotel
businesses for Farber Enterprises and Ramada Incorporated. Mr. Hancock attended
the Cranbrook Academies, Eastern Michigan University, and the University of
California at Los Angeles. He belongs to several professional organizations
including the Academy of Television Arts and Sciences.





Ron Smith, 71, serves as a
Director on the Board of Buckeye Ventures, Inc. In 1965 after working for
another local company for three years, he founded Modern Air Conditioning. Inc.
in Ft Myers, FL with a borrowed $500, no customers and no coworkers, and built
it into one of the premier and most recognized and respected firms in the U.S.
with $15 million in annual revenues before selling it in 1986 to a Philadelphia
based mechanical contractor. Later he purchased, significantly grew, and then
sold three similar air conditioning companies in the Louisiana and Florida
markets. In 1985 he founded Service America, based in Atlanta, GA, the first
national HVAC franchiser. In less than four years the firm had over 100
franchisees. Ron Smith & Associates (RS&A), an HVAC exclusive training
and consulting company based in Roswell, GA was founded in 1991. RS&A, with
its focus on operations, systems, processes, and disciplines soon became one of
the industry's leading training and consulting firms. In 1997 he joined Service
Experts in Brentwood, TN, an HVAC consolidator and public company, as its Chief
Operating Officer and served in that position until mid 2000 after the company
was sold to Lennox Industries. Currently, Ron consults with and coaches, on a
limited basis, contractors and distributors. Ron founded, co-founded, owned, or
has an ownership position in fourteen businesses. They are Modern Air
Conditioning in Ft. Myers, FL; Service America in Atlanta, GA; Carl's Service
America in Baton Rouge, LA; Edwards and Smith in Ft. Myers, FL; Hart's Electric
Motor Shop in Ft. Myers, Fl; R.L. Anderson in Venice, FL; Venture International
(Ron Smith & Associates) in Roswell, GA; Anderson Firestone in Ft. Myers,
FL; Spiro International in Fribourg, Switzerland; Service Canada in Mississauga,
Canada; Energy Management and Controls in Sarasota, FL; Service Roundtable in
Grapevine, TX; Ron Smith Coaching and Consulting in Brentwood, TN; and,
HVACR Business in Cleveland, OH. He served eleven years as a member of the
Florida Construction Industry Licensing Board, and also served on the Florida
Governor's Conference on Small Business. In 1979 he was chosen Free Enterprise
Citizen of the Year in Ft. Myers/Lee County, Fl. In 1980/81 he graduated from
Harvard Business School's Executive Education Program, Managing Organizational
Effectiveness.




60





He is
proud of being one of only 27 people to have been elected to the HVAC Hall of
Fame. He is on the board of directors of Service Roundtable in Grapevine, TX and
is one of the founders of the company. He is on the Advisory Board for HVACR
Business (a trade journal), has authored many articles for various trade
journals for the past 30 years and speaks at HVAC conventions and symposiums. In
the past he served on the board of directors of Spiro International S.A. in
Friborg, Switzerland, the Advisory Board for North Carolina National Bank in
Ft. Myers, FL, and the Advisory Board for Roto-Rooter/Service America in
Boca Raton, FL.





Adam Taylor, 55, serves as a
Director on the Board of Buckeye Ventures, Inc. He is currently President of
Associated Production Music, the world's largest music production company,
having the largest available collection of original production music. He has
held this position since 2001. For more than the past twenty years, Mr. Taylor
has specialized in providing consulting services to intellectual property
companies, organizations and individuals related to optimizing the economic
value of copyrights, trademarks and patents. From 1979 to 1989, Mr. Taylor
served as the Chief Executive Officer and President of Caswell-Massey, the
oldest chemist and perfumers in the U.S., established in 1752. Mr. Taylor also
was a founding partner of a firm that developed entertainment properties,
including several television series from 1990 to 1996





Family
Relationships





There are
no family relationships between or among any of the current directors, executive
officers or persons nominated or charged by the Company to become directors or
executive officers.





Involvement
in Certain Legal Proceedings





None of
our directors, executive officers, promoters or control persons, or any proposed
directors, has been involved in any of the following events during the past five
years:





1. 
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;





2.  any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding, excluding traffic violations and other minor offenses;





3.  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 his involvement in any type
of business, securities or banking activities; or





4.  being
found by a court of competent jurisdiction in a civil action, 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 Securities Exchange Act of 1934





Section
16(a) of the Exchange Act requires our directors and certain of our officers, as
well as persons who own more than 10% of a registered class of our equity
securities (“Reporting Persons”), to file reports with the SEC. The SEC has
established specific due dates for these reports have been established. During
the fiscal year ended December 31, 2007, based solely on our review of the
copies of such reports filed with the SEC and written representations to us that
no other reports were required, we believe that none of the reports required to
be filed by Section 16(a) by our Reporting Persons have been filed on a timely
basis.





Accordingly,
we have requested that all Reporting Persons file all required reports as soon
as possible.





Board
of Directors: Nominating Procedures





There
have been no material changes to the procedures by which security holders may
recommend nominees to our board of directors.





Board
Committees and Director Independence





Our board
of directors has established (i) an Audit Committee, (ii) an Executive
Committee, (iii) a Finance Committee, and (iv) a
Compensating-Nominating-Governance Committee.  The members of each
committee are listed above in the subsection titled “Executive Officers and
Directors.”




61





Our Audit Committee is responsible for
reviewing our financial reporting procedures and internal controls, the scope of
annual and any special audit examinations carried out by our auditors, the
performance, independence, and compensation of our auditors, systems and
disclosure controls established to comply with regulatory requirements and our
annual financial statements before they are reviewed and approved by our board
of directors. Such reviews are carried out with the assistance of our auditors
and our senior financial management.





Our Executive Committee is responsible
for general oversight and policy implementation relative to corporate strategy
and operations. The Executive Committee acts on behalf of the board of directors
in matters of corporate operations and policy, except for certain powers
reserved exclusively to the board of directors. In addition, the Executive
Committee may assist in identifying potential new members for the board of
directors, subject to review by the independent
Compensating-Nominating-Governance Committee, and may assist in identifying
potential executive officers.





Our Finance Committee is responsible
for reviewing the banking and financial activities of the company and making
recommendations to the board of directors and the Executive Committee with
respect to those matters, as well as any other matters affecting the business
and affairs of the company that may be referred to it by the Chief Executive
Officer, the Chairman of the Board or the Executive Committee.





Our Compensating-Nominating-Governance
Committee is responsible for identifying individuals qualified to become members
of the board of directors and reviewing and evaluating such candidates. This
committee is also responsible for reviewing and recommending compensation for
corporate officers and consultants. The Compensating-Nominating-Governance
Committee is comprised entirely of "independent" directors, as defined under
NASD listing standards and SEC rules.





We
believe that the following directors are considered “independent” under Rule
4200(a)(15) of the National Association of Securities Dealers listing standards:
Alfred R. Roach, Jr., Randy Eakin, Ronald L. Smith, and Adam
Taylor.




ITEM
10.  EXECUTIVE COMPENSATION.




The
following table sets forth information with respect to the compensation of our
Chief Executive Officer and the other executive officer who earned more than
$100,000 per year at the end of the last completed fiscal year for services
provided to us and our subsidiaries in 2006 and 2005.




Summary
Compensation Table





Name
      & Principal
              Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
      Plan Compensation
              ($)
            All
      Other Compensation
              ($)
            Total
              ($)Alan
      J. Mintz,
              Chief
      Executive Officer & President
            2007
              
              2006
            150,000(1)
              
              150,000(2)
            0
              
              0
            3,000
              
              0
            0
              
              0
            0
              
              0
            0
              
              0
            150,000
              
              150,000Larry
      Weinstein, Vice President, Secretary & Treasurer
            2007
              
              2006
            150,000(3)
              
              150,000(4)
            0
              
              0
            3,000
              
              0
            0
              
              0
            0
              
              0
            0
              
              0
            150,000
              
              150,000




(1)
            In
      2007, Mr. Mintz, received $6,250 in pay against an accrued but unearned
      amount of $143,655 from prior years for a total of
    $150,000.(2)
            In
      2006, Mr. Mintz, had accrued and not received gross salary in the amount
      of $43,655 and was paid a gross salary of $106,345 for a total of
      $150,000.(3)
            In
      2007, Mr. Weinstein, had accrued and not received gross salary in the
      amount of $18,750 and was paid a gross salary of $131,250 for a total of
      $150,000.(4)
            In
      2006, Mr. Weinstein, had accrued and not received gross salary in the
      amount of $46,155 and was paid a gross salary of $103,845 for a total of
      $150,000.




62





Director
Compensation





Our non-employee directors have agreed to forego
receiving cash compensation until we reach a cash flow breakeven
position.





The table
below summarizes the compensation that we paid to non-employee directors for the
fiscal year ended December 31, 2007.




Name
      & Principal
              Position
            Year
            Salary
              ($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
      Plan Compensation
              ($)
            All
      Other Compensation
              ($)
            Total
              ($)Randy
      Eakin
            2007
            0
            0
            3,000
            0
            0
            0
            3,000Larry
      Epstein
            2007
            0
            0
            3,000
            0
            0
            0
            3,000Paul
      Hancock
            2007
            0
            0
            3,000
            0
            0
            0
            3,000Alfred
      R. Roach, Jr.
            2007
            0
            0
            3,000
            0
            0
            0
            3,000Ronald
      L. Smith
            2007
            0
            0
            3,000
            0
            0
            0
            3,000Adam
      Taylor
            2007
            0
            0
            3,000
            0
            0
            0
            3,000





$3,000
was the equivalent of 25,000 shares of Energy King’s common stock priced at $.12
per share on the issue date. The amount was determined by the BOD as
compensation for serving during the year based on three meetings at $1,000 per
meeting.





ITEM
11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS




The
following table sets forth, as of March 16, 2007 (i) the name and address of
each person who owns of record or who is known by the Board of Directors to be a
beneficial owner of more than five percent (5%) of the Company's outstanding
common and preferred stock, (ii) each of the Company's Directors, (iii) each of
the Company's executive officers, and (iv) all of the Company's Executive
Officers and Directors as a group.




Beneficial
ownership is determined in accordance with the rules of the SEC and includes
voting and investment power. Under SEC rules, a person is deemed to be the
beneficial owner of securities which may be acquired by such person upon the
exercise of options and warrants or the conversion of convertible securities
within 60 days from the date on which beneficial ownership is to be determined.
Each beneficial owner's percentage ownership is determined by dividing the
number of shares beneficially owned by that person by the base number of
outstanding shares, increased to reflect the beneficially-owned shares
underlying options, warrants or other convertible securities included in that
person's holdings, but not those underlying shares held by any other
person.




Amount and Nature of Beneficial
Ownership





Name
            Affiliation
            
            Shares
      of
              Common
      Stock
              Beneficially
      Held
            
            
            Percent
            
            
            Shares
      of
              Preferred
      Stock Beneficially Held
            
            
            PercentAlan
      J. Mintz
              4455
      Lamont St., Ste 3
              San
      Diego, CA 92109
            CEO,
      President &
              Director
            
            
            32,231,054
            
            
            
            32.7%
            
            
            
            398,435
            
            
            
            39.9%Larry
      Weinstein
              4455
      Lamont St., Ste 3
              San
      Diego, CA 92109
            Executive
      Vice
              President,
      Secretary,
              Treasurer
      & Director
            
            
            32.231,052
            
            
            
            32.7%
            
            
            
            398,434
            
            
            
            39.9%Paul
      D. Hancock
              2120
      Main St., Ste 180
              Huntington
      Beach, CA 92648
            President
      WWMPC &
              Director
            
            
            9,805,384
            
            
            
            9.9%
            
            
            
            -0-
            
            
            
            0.00%Total
            
            
            
            74,267,490
            
            
            
            75.3%
            
            
            
            796,869
            
            
            
            79.8%





63




ITEM
12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE




The
Company paid rent during 2007 and 2006 to an employee of the Company, Jim
Papasodero, who is President of Energy King's wholly owned subsidiary, Heating
and Air Conditioning Services, Inc. The rents paid and terms under the sublease
are the same as was paid prior to its acquisition. Rent expense for the years
ended December 31, 2007 and 2006 was approximately $90,000 and $91,067
respectively.




ITEM
13.  EXHIBITS





INDEX
OF EXHIBITS





Incorporated by Reference to the
      Exhibit Indicated Below and to the
      Filing with the Commission Indicated
    BelowExhibit
      Number
            
            
            Description
      of Exhibits
            
            Exhibit
      Number
            
            
            Filing or
      File Number2.1
            
            
            Agreement
      and Plan of Merger by and among Buckeye Ventures, Inc., EK Acquisition
      Corp., Energy King, Inc., and Alan Hardwick, Varin Larson and Deanna
      Larson dated September 28, 2006
            
            10.1
            
            
            Form
      8-K/A Filed 2007-01-222.2
            
            
            Agreement
      and Plan of Merger by and among Buckeye Ventures, Inc., a Michigan
      corporation, and Buckeye Ventures, Inc., a Nevada corporation, dated
      August 3, 2007
            
            2.2
            
            
            Form
      SB-2 Filed 2007-12-062.3
            
            
            Agreement
      and Plan of Merger by and among Buckeye Ventures, Inc., a Nevada
      corporation, GHA Acquisition Corp., a Delaware corporation, Gallagher’s
      Heating & Air Conditioning, Inc., a California corporation, and
      Timothy E. Gallagher
            
            10.1
            
            
            Form
      8-K Filed 2008-03-063.1
            
            
            Amended
      and Restated Articles of Incorporation of Buckeye Ventures, Inc., a
      Michigan corporation
            
            3.1
            
            
            Form
      SB-2 Filed 2007-12-063.2
            
            
            Bylaws
      of Buckeye Ventures, Inc., a Michigan corporation
            
            3.2
            
            
            Form
      SB-2 Filed 2007-12-063.3
            
            
            Restated
      Certificate of Incorporation of Buckeye Ventures, Inc., a Nevada
      corporation
            
            3.3
            
            
            Form
      SB-2 Filed 2007-12-063.4
            
            
            Bylaws
      of Buckeye Ventures, Inc., a Nevada corporation
            
            3.4
            
            
            Form
      SB-2 Filed 2007-12-063.5
            
            
            Certificate
      of Amendment to Articles of Incorporation of Buckeye Ventures, Inc., a
      Nevada corporation (Name Change)
            
            3.1
            
            
            Form
      8-K Filed 2008-02-25




64




10.1
            
            
            Asset
      Purchase Agreement among Energy King, Inc., Barnett Plumbing, Inc., and
      Robert E. Barnett and Sherry E. Barnett dated January 2,
    2007
            
            10.1
            
            
            Form
      8-K Filed 2007-01-1610.2
            
            
            Employment
      Agreement between Energy King, Inc. and Varin Larson dated September 28,
      2006
            
            99.1
            
            
            Form
      10-QSB Filed 2006-11-2010.3
            
            
            Employment
      Agreement between Energy King, Inc. and Alan Hardwick dated September 28,
      2006
            
            99.2
            
            
            Form
      10-QSB Filed 2006-11-2010.4
            
            
            Promissory
      Note Secured by Pledge Agreement between Buckeye Ventures, Inc. and Varin
      Larson and Deanna Larson dated September 28, 2006
            
            99.3
            
            
            Form
      10-QSB Filed 2006-11-2010.5
            
            
            Pledge
      Agreement between Buckeye Ventures, Inc. and Varin Larson and Deanna
      Larson dated September 28, 2006
            
            10.5
            
            
            Filed
      Herewith10.6
            
            
            Promissory
      Note Secured by Pledge Agreement between Buckeye Ventures, Inc. and Alan
      Hardwick dated September 28, 2006
            
            99.4
            
            
            Form
      10-QSB Filed 2006-11-2010.7
            
            
            Securities
      Purchase Agreement between Buckeye Ventures, Inc., and Trafalgar Capital
      Specialized Investment Fund
            
            4.1
            
            
            Form
      8-K Filed 2007-10-0410.8
            
            
            10.0%
      Secured Convertible Debenture between Buckeye Ventures, Inc., a Michigan
      corporation and Trafalgar Capital Specialized Investment Fund dated June
      29, 2007
            
            4.2
            
            
            Form
      8-K Filed 2007-10-0410.9
            
            
            Warrant
      to Purchase 500,000 Shares of Common Stock of Buckeye Ventures, Inc., a
      Michigan corporation held by Trafalgar Capital Specialized Investment Fund
      dated June 29, 2007
            
            10.9
            
            
            Form
      SB-2 Filed 2007-12-0610.10
            
            
            Warrant
      to Purchase 750,000 Shares of Common Stock of Buckeye Ventures, Inc., a
      Michigan corporation held by Trafalgar Capital Specialized Investment Fund
      dated June 29, 2007
            
            10.10
            
            
            Form
      SB-2 Filed 2007-12-0610.11
            
            
            Registration
      Rights Agreement between Buckeye Ventures, Inc., a Michigan corporation
      and  Trafalgar Capital Specialized Investment Fund dated June
      29, 2007
            
            10.11
            
            
            Form
      SB-2 Filed 2007-12-0610.12
            
            
            Security
      Agreement between Buckeye Ventures, Inc., and Trafalgar Capital
      Specialized Investment Fund dated June 29, 2007
            
            10.12
            
            
            Form
      SB-2 Filed 2007-12-06




65




10.13
            
            
            Escrow
      Agreement among Buckeye Ventures, Inc., Trafalgar Capital Specialized
      Investment Fund and James G. Dodrill II, P.A
            
            10.13
            
            
            Form
      S-1/A Filed 2008-02-1410.14
            
            
            Irrevocable
      Transfer Agent Instructions
            
            10.14
            
            
            Form
      S-1/A Filed 2008-02-1410.15
            
            
            Energy
      King California Lease Agreements
            
            10.15
            
            
            Form
      S-1/A Filed 2008-02-1410.16
            
            
            Heating
      and Control Systems Massachusetts Lease Agreement
            
            10.16
            
            
            Form
      S-1/A Filed 2008-02-1410.17
            
            
            Employment
      Agreement of Alan J. Mintz
            
            10.17
            
            
            Form
      S-1/A Filed 2008-02-1410.18
            
            
            Employment
      Agreement of Larry Weinstein
            
            10.18
            
            
            Form
      S-1/A Filed 2008-02-1410.19
            
            
            Employment
      Agreement of James Papasodero
            
            10.19
            
            
            Form
      S-1/A Filed 2008-02-1410.20
            
            
            Employment
      Agreement of Paul Hancock
            
            10.20
            
            
            Form
      S-1/A Filed 2008-02-1421.1
            
            
            List
      of Subsidiaries
            
            21.1
            
            
            Filed
      Herewith31.1
            
            
            Rule
      13a-14(a) Certification of Alan J. Mintz pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            31.1
            
            
            Filed
      Herewith31.2
            
            
            Rule
      13a-14(a) Certification of Henry S. Leonard pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            31.2
            
            
            Filed
      Herewith32.1
            
            
            Section
      1350 Certification of Alan J. Mintz pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            
            32.1
            
            
            Filed
      Herewith32.2
            
            
            Section
      1350 Certification of Henry S. Leonard pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            
            32.2
            
            
            Filed
      Herewith





66





ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES




During
2007 and 2006, the Company utilized the services of Michael E. Studer, CPA,
P.C.. whose firm did not provide any services to the Company related to
financial information systems design and implementation.





The
aggregate fees billed by Michael E. Studer, CPA, P.C. to the Company for the
years ended December 31, 2007 and 2006 are as follows:





2007
            
            
            2006Audit
      Fees (1)
            
            $
            62,636
            
            
            $
            42,500All
      Other Fees (2)
            
            
            --
            
            
            
            --Total
      Fees for Services Provided
            
            $
            62,636
            
            
            $
            42,500





(1) Audit
services included (a) the annual audit (including required quarterly reviews)
and other procedures required to be performed by the independent auditor to be
able to form an opinion on the Company's consolidated financial statements, and
(b) services that only the independent auditor reasonably can provide, such as
services associated with SEC registration statements, periodic reports and other
documents filed with the SEC or related thereto.





(2)  All
Other Fees – This category consists of fees for other miscellaneous items.
The Company did not pay any Tax Fees or other fees for professional services
rendered by our independent auditors for tax compliance and tax
advice.





Pre-Approval
Policies and Procedures – Prior to engaging its accountants to perform
particular services, our board of directors obtains an estimate for the service
to be performed. All of the services described above were approved by the board
of directors in accordance with its procedure.





67




SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.




ENERGY
      KING, INC.November
      12, 2008
            
            By:
            /s/
      JEFFREY R. HULTMANJeffrey
      R. HultmanChief
      Executive Officer&Chief
      Accounting Officer




In
accordance with the Securities Exchange of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.





Signature
            
            Title
            
            Date/s/
      ALAN J. MINTZAlan
      J. Mintz
            
            President
      and a Director
            
            November
      12, 2008/s/
      LARRY WEINSTEINLarry
      Weinstein
            
            Executive
      Vice-President, Corporate Secretary and a Director
            
            November
      12, 2008/s/
      ALFRED R. ROACH, JR.Alfred
      R. Roach, Jr.
            
            Director,
      Chairman of the Board
            
            November
      12, 2008Paul
      D. Hancock
            
            Director/s/
      ADAM TAYLORAdam
      Taylor
            
            Director
            
            November
      12, 2008










68