UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-K
 
 (MarkOne)x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE
      ACT OF 1934For
      the fiscal year ended December 31, 2009oro
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For the
transition period from ____________ to ____________
 
 Commission
file number l-9224
 
 Metha
Energy Solutions Inc.
 (Exact
Registrant as specified in Its Charter)
 
 DELAWARE
              
              32-0251358(State
      or Other Jurisdiction of
                Incorporation
      or Organization)
              
              (I.R.S.
      Employer
                Identification
      No.)
 
 410
      Park Avenue, 15th
      Floor, New York, NY 10022(Address
      of Principal Executive Offices) (Zip
Code)
 
 212-231-8526
 (Issuer's
Telephone Number, including Area Code)
 
 Inscrutor,
Inc.
 (Former
name or address)
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
 Yes o         No  x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.
 Yes x      
 No  o
  Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such
files).  Yes o  No  ̈
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes x      
 No  o
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
accelerated filer  o            Accelerated
filer  o             Non-accelerated
filer  o            Smaller
Reporting Company  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
 
 The
aggregate market value of the registrant’s common stock held by non-affiliates
of the registrant, computed by reference to the last reported price at which the
stock was sold on June 30, 2009 (the last business day of the registrant’s most
recently completed second quarter) was $0.
 
 Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
 
 Class
              
              Outstanding
      at March 30, 2010Common
      Stock, $.001 par value per share
              
              22,620,030
      shares
  
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 FORM
10-K
 YEAR
ENDED DECEMBER 31, 2009
 
 
 TABLE OF
CONTENTS
 
 PART
      I
                
                PageItem
      1.
                Business
                1Item
      1A.
                Risk Factors
                2Item
      2.
                Properties
                3Item
      3.
                Legal Proceedings
                3Item
      4.
                Removed and Reserved
                3PART
      II
                
                4Item
      5.
                Market for the Registrant’s Common Stock and
      Related Stockholder Matters
                4Item
      6.
                Selected Financial Data
                4Item
      7.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                5Item
      7A.
                Quantitative and Qualitative Disclosures About
      Market Risk
                8Item
      8.
                Financial Statements and Supplementary
      Data
                8Item
      9.
                Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
                8Item
      9A.
                Controls and Procedures
                9PART
      III
                
                9Item
      10.
                Directors, Executive Officers and Corporate
      Governance
                10Item
      11.
                Executive Compensation
                11Item
      12.
                Security Ownership of Certain Beneficial Owners
      and Management
                12Item
      13.
                Certain Relationships and Related Transactions,
      and Director Independence
                13Item
      14.
                Principal Accountant Fees and
      Services
                13PART
      IV
                
                15Item
      15.
                Exhibits and Financial Statements
      Schedules
                15
 
 
 
 
 
 FORWARD-LOOKING
STATEMENTS
 
 This
report contains forward-looking statements that are subject to a number of risks
and uncertainties, many of which are beyond our control, which may include
statements about our:
 
 ·
              business
      strategy;
 
 ·
              financial
      strategy;
 
 ·
              uncertainty
      regarding our future operating
results;
 
 ·
              plans,
      objectives, expectations and intentions contained in this report that are
      not historical.
 
 All
statements, other than statements of historical fact included in this report,
regarding our strategy, future operations, financial position, estimated
revenues and losses, projected costs, prospects, plans and objectives of
management are forward-looking statements. When used in this report, the words
“could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such identifying words. All
forward-looking statements speak only as of the date of this report. You should
not place undue reliance on these forward-looking statements. Although we
believe that our plans, intentions and expectations reflected in or suggested by
the forward-looking statements we make in this report are reasonable, we can
give no assurance that these plans, intentions or expectations will be achieved.
We disclose important factors that could cause our actual results to differ
materially from our expectations under “Risk Factors” and elsewhere in this
report. These cautionary statements qualify all forward-looking statements
attributable to us or persons acting on our behalf.
 
 Item
1.  Business
 
 General
 
 We are a
Delaware Corporation founded in April 2008.  We changed our name to
Metha Energy Solutions Inc. (“Metha Energy” or “the Company” or “formerly
Inscrutor”) on October 12, 2009.  We focus our business on
commercializing advanced fuel cell technology.   We have secured
the rights for such patent pending products and we represent these products in
the North American market and within the global vehicle segment.
 
 We were
founded  in April 2008 as Inscrutor, Inc.  (“Inscrutor”), a
development stage company. The technology that we owned was acquired via a
Separation and Distribution Agreement on May 30, 2008 from Visator, Inc.
(“Visator”), a Delaware corporation that specializes in on-line media
monitoring. Prior to that time, Inscrutor was a wholly-owned subsidiary of
Visator. Inscrutor was spun out from Visator with the purpose of ensuring
optimal value-creation for the shareholders of both Inscrutor and
Visator.  According to the terms of the Separation Agreement, Visator
decided to distribute the common stock of Inscrutor on a 1-for-1 basis to
the holders of Visator’s common and preferred stock (“the Distribution”). On
June 1, 2008 (the "Distribution Date"), Visator transferred its shares of
Inscrutor to the shareholders of record of Visator common stock and
preferred stock at the close of business on May 30, 2008 (the "Record Date"),
without any consideration being paid by such holders. As of October 9,
2008, the stock certificates were delivered to shareholders (See Note
8).  The Company derived revenue from a management services agreement
with Visator.  We no longer pursue any commercialization of
software/technology nor do we invest in it.
 
 From the
end of August, 2009, in connection with entering the agreement with
Serenergy the Company decided to cease any further activity in the area of
sophisticated data-mining technology.
 
 Marketing
 
 Our
products are sold to a number of different application areas where customers and
research institutes are testing them for potential future implementation. We
communicate mainly through our website www.methaenergy.com
and direct customer communication via e-mail and phone.
 
 1
 
 Competition
 
 There are
multiple companies which offer different kinds of fuel cell technologies. These
different kinds of fuel cells technologies vary in attractiveness regarding
different features.  The fuel cell segment is not a new
segment/industry.  This is a highly competitive market.
 
 Item 1A.  Risk
Factors
 
 THIS REPORT CONTAINS
CERTAIN STATEMENTS RELATING TO FUTURE EVENTS AND THE FUTURE FINANCIAL
PERFORMANCE OF OUR COMPANY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT SUCH
STATEMENTS ARE ONLY PREDICTIONS, INVOLVE RISKS AND UNCERTAINTIES, AND THAT
ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS,
PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS
IDENTIFIED IN THIS REPORT, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH
FORWARD-LOOKING STATEMENTS.
 
 An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. Please note that throughout this prospectus, the words “we”,
“our” or “us” refer to the Company and not to the selling
stockholders.
 
 WE
HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE
LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES,
DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL
DEVELOPING COMPANY.
 
 We were
incorporated in Delaware in April 2008. We have no significant financial
resources and only a small amount of revenues to date. The likelihood of our
success must be considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered by a small developing company
starting a new business enterprise and the highly competitive environment in
which we will operate. Since we have a limited operating history, we cannot
assure you that our business will be profitable or that we will ever generate
sufficient revenues to meet our expenses and support our anticipated
activities.
 
 WE
WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR
INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR BUSINESS
PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF OPERATIONS.
 
 We will
need to raise additional funds through public or private debt or sale of equity
to achieve our current business strategy. Such financing may not be available
when needed. Even if such financing is available, it may be on terms that are
materially adverse to your interests with respect to dilution of book value,
dividend preferences, liquidation preferences, or other terms. Our capital
requirements to implement our business strategy will be significant. Moreover,
in addition to monies needed to continue operations over the next twelve months,
we anticipate requiring additional funds in order to execute our plan of
operations. No assurance can be given that such funds will be available or, if
available, will be on commercially reasonable terms satisfactory to us. There
can be no assurance that we will be able to obtain financing if and when it is
needed on terms we deem acceptable.
 
 If we are
unable to obtain financing on reasonable terms, we could be forced to delay or
scale back our plans for expansion. In addition, such inability to obtain
financing on reasonable terms could have a material adverse effect on our
business, operating results, or financial condition.
 
 
 2
 
 
 OUR
AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
 
 Based on
our financial history since inception, our auditor has expressed substantial
doubt as to our ability to continue as a going concern. We are a development
stage company. If we cannot obtain sufficient funding, we may have to delay the
implementation of our business strategy.
 
 OUR
FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE
OF JESPER TOFT. WITHOUT HIS CONTINUED SERVICE, WE MAY BE FORCED TO INTERRUPT OR
EVENTUALLY CEASE OUR OPERATIONS.
 
 We are
presently dependent to a great extent upon the experience, abilities and
continued services of Jesper Toft. We currently have a consulting agreement with
Mr. Toft. The loss of his services could have a material adverse effect on our
business, financial condition or results of operation.
 
 WE
HAVE HAD TWO CUSTOMERS WHO HAVE ACCOUNTED FOR 81% AND 19%, RESPECTIVELY, OF OUR
TOTAL REVENUES IN 2009.
 
 We
currently have two customers, who account for 81% and 19% of total revenues,
respectively.  One of those customers is Visator, a related
party.  The agreement with Visator expired on June 1, 2009 and was not
renewed. While we believe our relationship with the other customer is stable, a
significant decrease or interruption in business from our significant customer
could have a material adverse effect on our business, financial condition and
results of operations. We plan to greatly expand our customer base in the
upcoming year to mitigate this risk.
 
 OUR
COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS ON
MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
 
 If our
common stock becomes tradable in the secondary market, we will be subject to the
penny stock rules adopted by the Securities and Exchange Commission that require
brokers to provide extensive disclosure to their customers prior to executing
trades in penny stocks. These disclosure requirements may cause a reduction in
the trading activity of our common stock, which in all likelihood would make it
difficult for our shareholders to sell their securities.
 
 Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system). Penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. 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 salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer’s account. The broker-dealer must also make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These
requirements may have the effect of reducing the level of trading activity, if
any, in the secondary market for a security that becomes subject to the penny
stock rules. The additional burdens imposed upon broker-dealers by such
requirements may discourage broker-dealers from effecting transactions in our
securities, which could severely limit their market price and liquidity of our
securities. These requirements may restrict the ability of broker-dealers to
sell our common stock and may affect your ability to resell our common
stock.
 
 Item
2.  Property
 
 Our
business office is located at 410 Park Avenue, 15th Floor, New York,
NY 10002.
 
 Item 3.  Legal
Proceedings
 
 We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.
 
 Item 4.  Removed
and Reserved
 
 
 
 3
   PART
II
 
 Item 5.  Market
for Common Equity and Related Stockholder Matters
 
 Our
common stock is quoted on the OTC Bulletin Board, a service provided by the
Nasdaq Stock Market Inc., under the symbol “MGYS”.  The following
table sets forth the high and low bid prices for our common stock as reported
each quarterly period since inception.
  Fiscal
      year ended December 31, 2009
                
                High
                
                
                LowQuarter
      EndedDecember
      31, 2009
                
                $
                0
                
                
                $
                0September
      30, 2009
                
                $
                0
                
                
                $
                0June
      30, 2009
                
                $
                0
                
                
                $
                0March
      31, 2009
                
                $
                0
                
                
                $
                0Fiscal
      year ended December 31, 2008Quarter
      EndedDecember
      31, 2008
                
                $
                0
                
                
                $
                0September
      30, 2008
                
                $
                0
                
                
                $
                0April
      18, 2008 (Inception) - June 30, 2008
                
                $
                0
                
                
                $
                0
 
 Holders of Our Common
Stock
 
 As of the
date of this annual report, we had 60 shareholders of our common
stock.
 
 Stock Option
Grants
 
 To date,
we have not granted any stock options.
 
 Item 6.  Selected
Financial Data
  Twelve
      months ended December 31, 2009
                
                
                April
      18, 2008 (Inception) - December 31, 2008
                
                
                April
      18, 2008 (Inception) - December 31, 2009Statement of Operations
    Data:Revenue
                
                $
                65,000
                
                
                $
                -
                
                
                $
                65,000Revenue-Related
      Party
                
                
                15,000
                
                
                
                21,000
                
                
                
                36,00080,000
                
                
                
                21,000
                
                
                
                101,000Cost
      of goods sold
                
                
                61,750
                
                
                
                8,050
                
                
                
                69,800Gross
      profit
                
                $
                18,250
                
                
                $
                12,950
                
                
                $
                31,200Gross
      margin
                
                
                23%
                
                
                
                62%
                
                
                
                31%Selling,
      general & administrative expenses
                
                
                290,903
                
                
                
                142,879
                
                
                
                433,782Loss
      from operations
                
                $
                (272,653
                )
                
                $
                (129,929
                )
                
                $
                (402,582
                )Operating
      expense (as % of revenue)
                
                
                364%
                
                
                
                680%
                
                
                
                429%Total
      other expense
                
                
                (7,048
                )
                
                
                (1,269
                )
                
                
                (8,317
                )Net
      loss before provision for income taxes
                
                
                (279,701
                )
                
                
                (131,198
                )
                
                
                (410,899
                )Provision
      for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss
                
                $
                (279,701
                )
                
                $
                (131,198
                )
                
                $
                (410,899
                )Net
      loss per share
                
                $
                (0.02
                )
                
                $
                (0.01
                )
 Balance Sheet Data:
                
                December
      31, 2009
                
                
                December
      31, 2008Total
      assets
                
                $
                476,070
                
                
                $
                11,042Total
      liabilities
                
                
                215,741
                
                
                
                68,471Working
      capital deficiency
                
                
                (144,956
                )
                
                
                (59,422
                )Stockholders'
      equity (deficit)
                
                
                260,329
                
                
                
                (57,429
                )
 
  4
   Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
 
 The
following discussion highlights the principal factors that have affected our
financial condition and results of operations as well as our liquidity and
capital resources for the periods described. This discussion contains
forward-looking statements. Please see “Forward-Looking Statements” and "Risk
Factors" for a discussion of the uncertainties, risks and assumptions associated
with these forward-looking statements.
 
 The
following discussion and analysis of the Company’s financial condition and
results of operations are based on the Company’s financial statements, which the
Company has prepared in accordance with U.S. generally accepted accounting
principles.  You should read the discussion and analysis together with
such financial statements and the related notes thereto.
 
 Plan
of Operation
 
 We are in
the process of acquiring financing. The proceeds from the financing will be
invested in building two sales departments, one for the North-American auto
industry and  one for the international auto industry.  This
will create the basis for having a sales organization, which we have to comply
with based on our agreements.  We aim at having such financing in
place before the end of the third quarter 2010.
 
 The
Company will in the future focus on business within the area of alternative
energy technology and related opportunities. The agreement between the Company
and Serenergy gives the Company the exclusive rights to commercialize
Serenergy's patent-pending fuel cell technology to the global segment of
vehicles, as well as exclusively in all segments of the US, Canada and Israeli
markets, and to the United Nations organization, will be the starting-point of
such activities. The Company plans to derive revenue from sales of these fuel
cell products and related customized projects.
 
 Results
of Operations.
 
 Year
Ended December 31, 2009 and the Period from April 18, 2008 (Inception) to
December 31, 2008
 
 For the
year ended December 31, 2009 and the period from April 18, 2008 (Inception)
through December 31, 2008, we had revenue of $80,000 as compared to $21,000 for
the period from April 18, 2008 (Inception) to December 31, 2008. The increase in
revenue in 2009 versus 2008 was partially due to $65,000 sale of fuel cell
technology in 2009 and also due to the agreement the Company had with Visator
for $3,000 per month for services being outstanding for five months in 2009,
versus seven  months in 2008. The agreement began on June 1, 2008 and
expired on June 1, 2009 and was not renewed. The cost of goods related to
revenue was $61,750 for the year ended December 31, 2009 as compared to $8,050
for the period from April 18, 2008 (Inception) to December 31, 2008 due to
consulting labor. The increase in 2009 versus 2008 was partially due to $56,000
of costs incurred related to the sale of the fuel cell technology in 2009 and
also due to the consulting agreement the Company entered into with Jude Dixon to
provide maintenance services being outstanding for five months in 2009 versus
seven months in 2008. The agreement began from June 1, 2008 to May 31, 2009 and
was not renewed.
   5
  
 For the
year ended December 31, 2009, operating expenses totaled $290,903 compared to
$142,879 for the period from April 18, 2008 (Inception) to December 31, 2008.
The increase in operating expenses were mainly due to the accounting, audit,
consulting, finance consulting and legal expenses of $180,730 that the Company
incurred in 2009 versus $79,174 for the  period from April 18, 2008
(inception) to December 31, 2008.  The increase in selling, general
and administrative expenses in 2009 versus 2008 is due to finance consulting
expenses of $60,344 for the equity investment in Serenergy and board members
fees of $3,158 for the new board members in 2009.  The net loss was
$279,701 for the year ended December 31, 2009 as compared to $131,198 for the
period from April 18, 2008 (Inception) to December 31, 2008. The increase in net
loss was mainly due to the Company operating for twelve months in 2009 versus
eight and one-half months in 2008 since the Company incorporated on April 18,
2008.
 
 For the
year ended December 31, 2009 we also had interest expense of $2,701 related to
in-kind contribution of interest on non-interest bearing loans payable-related
party. For the period from April 18, 2008 (Inception) to December 31, 2008, we
had interest expense of $1,269. The increase in interest expense in 2009 versus
2008 is due to the loans payable to related parties that were entered into in
the third quarter of 2008.
  Capital
Resources and Liquidity
 
 As of
December 31, 2009, we had cash of $5,785.  As of December 31, 2008, we
had cash of $49.  While we are attempting to commence operations and
produce revenues, our cash position may not be significant enough to support our
daily operations. Management intends to raise additional funds through debt or
equity.
 
 However,
if we are unable to satisfy our cash requirements we may be unable to proceed
with our plan of operations.  We do not anticipate the purchase or sale of
any significant equipment. We also do not expect any significant additions to
the number of employees. The foregoing represents our best estimate of our cash
needs based on current planning and business conditions.  In the event we
are not successful in reaching our initial revenue targets, additional funds may
be required, and we may not be able to proceed with our business plan for the
development and marketing of our core services. Should this occur, we will
suspend or cease operations.
 
 We
anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.  We do not have enough cash to continue operations for twelve
months without receiving additional debt or equity financing or increasing our
revenues.
 
 Operating
Activities
 
 Operating
activities used $167,517, $46,015 and $213,532, respectively of cash during the
year ended December 31, 2009 and for the period from April 18, 2008 (Inception)
through December 31, 2008 and the period from April 18, 2008 (Inception) through
December 31, 2009. We had a net loss of $279,701, $131,198 and $410,899 during
the year ended December 31, 2009 and for the period from April 18, 2008
(Inception) through December 31, 2008 and the period from April 18, 2008
(Inception) through December 31, 2009, respectively. We had an increase in
accounts receivable of $56,000, none and $65,000, in accounts receivable-related
party of $7,000, $9,000 and $7,000 and in other assets of $0, $465 and $465,
respectively offset by an increase in accounts and accrued expenses payable of
$118,747, $17,618 and $136,365, and an increase in accounts and accrued expenses
payable-related party of $26,743, $3,000 and $29,742,
respectively.  In addition, we had $0, $50,000 and $50,000 of series A
convertible preferred stock issued for services – related party, $19,358,
$22,500 and $41,858 of stock issued for consulting fees and services – related
party, professional and board fees, in-kind contribution of interest for loans
payable – related party of $2,701, $1,269 and $3,970, bad debt expense of
$7,000, $0 and $7,000 and depreciation and amortization expense of $635, $261
and $896, respectively.
 
 Investing
Activities
 
 We used
$403,927, $1,789 and $405,716, respectively, of cash in our investing activities
during the year ended December 31, 2009, and for the period from April 18, 2008
(Inception) through December 31, 2008 and the period from April 18, 2008
(Inception) through December 31, 2009.  We used $402,780, $0 and
$402,780, respectively, of cash for our Serenergy equity investment and $1,147,
$1,789 and $2,936, respectively, for the purchase of property, plant and
equipment during the year ended December 31 2009, and for the period from April
18, 2008 (Inception) through December 31, 2008 and the period from April 18,
2008 (Inception) through December 31, 2009.
 
 Financing
Activities
 
 We had
$577,180, $47,853 and $625,033, respectively, of cash provided by our financing
activities during the year ended December 31, 2009, and the period from April
18, 2008 (Inception) through December 31, 2008 and the period from April 18,
2008 (Inception) through December 31, 2009. We had $575,400, $0 and $575,400,
respectively, of proceeds from sale of common stock and series B preferred
stock, $0, $2,853 and $2,853, respectively, of proceeds of loans payable to
related party and $1,780, $45,000 and $46,780, respectively, of proceeds of
notes payable to Toft Aps related party.
 
  6
   Off-Balance
sheet arrangements
 
 At
December 31, 2009 and December 31, 2008, we had no off-balance sheet
arrangements.
 
 Spin
Out
 
 In May
2008, Visator, Inc. spun out, pro rata, all of its shares of our common stock
held by it to their 42 shareholders.  These shares were
not registered under the Securities Act of 1933 and may not have been
appropriately exempt from registration under the Act. Based upon same, if
it is determined that the shares issued pursuant to this spin out do not qualify
for this exemption we may be subject remedial sanctions. Such sanctions could
include the payment of disgorgement, prejudgment interest and civil penalties.
We may also be subject to prejudgment interest on such amount as well as civil
penalties in amount that would have to be determined by the court.
 
 We are
not aware of any pending claims for sanctions against us based upon the failure
to properly register such shares under the Securities Act of 1933. Nevertheless,
it is possible that it could be determined that such shares may not have
been exempt from registration and that we may be subject to sanctions and
possible civil penalties.  In the event that a shareholder brings a
claim against us for failure to properly register these shares it could
have an adverse affect on our results of operations and financial condition
since we would need to pay fees to defend such claim or pay damages if the
shareholder is successful in their claim against us.
 
 Critical
Accounting Policies
 
 Going
concern
 
 The
accompanying financial statements have been prepared under a going concern basis
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, we have incurred net losses from
inception of $410,899.  In addition at December 31, 2009 current
liabilities exceed current assets by $144,956 and net cash used in operations is
$167,517.  These factors raise substantial doubt about our ability to
continue as a going concern.
 
 Management
is pursuing other business relationships and believes that the actions presently
being taken and the success of future operations will be sufficient to enable
the Company to continue as a going concern.
 
 In
February 2010, we raised gross proceeds of $45,525 through the issuance of a
note payable to IT Venture ApS for the purpose of funding operating expenses. We
raised gross proceeds of $1,072 through the issuance of a note payable to Jesper
Toft in January 2010 for the purpose of funding operating expenses.
 
 However,
there can be no assurance that the raising of debt or equity will be successful
and that our anticipated financing will be available in the future, at terms
satisfactory to the Company. Failure to achieve the equity and financing at
satisfactory terms and amounts could have a material adverse effect on the
Company’s ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
 Use
of estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Revenue
recognition
 
 The
Company’s revenues are derived from the sale of fuel cell technology The Company
follows the guidance of the Securities and Exchange Commission’s FASB Accounting
Standards Codification No. 605 for revenue recognition. The Company will
recognize revenue when it is realized or realizable and earned. The Company
considers revenue realized or realizable and earned when it has persuasive
evidence of an arrangement that the services have been rendered to the customer,
the sales price is fixed or determinable, the item has been shipped and
collectability is reasonably assured.
 
 The
payment terms for the sale of fuel cell technology is 50% of the payment (“first
payment”) is due when the order is placed.  Items are shipped and
revenue is recognized once the first payment is received. The remaining 50% is
due 30 days after the delivery of the fuel cell technology.
 
  7
  
 Investments
  Equity
investments in companies over which the Company has no ability to exercise
significant influence are accounted for under the cost method.  The
Company’s holds approximately 11% of Serenergy’s issued and outstanding shares
as of December 31, 2009.  The Company’s investment in Serenergy is
accounted for based on the cost method.
  Income
taxes
 
 The
Company follows FASB Accounting Standards Codification No. 740, Income Taxes. Under the asset
and liability method of FASB Accounting Standards Codification No. 740, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. A valuation
allowance can be provided for a net deferred tax asset, due to uncertainty of
realization.
 
 Net
loss per common share
 
 Net loss
per common share is computed pursuant to FASB Accounting Standards Codification
No. 260 , Earnings Per
Share.  Basic net loss per share is computed by dividing net
loss by the weighted average number of shares of common stock outstanding during
the period. Diluted net loss per share is computed by dividing net loss by the
weighted average number of shares of common stock and potentially outstanding
shares of common stock during each period. There were 100,000 Series A and
100,000 Series B convertible Preferred shares that were omitted from the
calculation of diluted earnings per share as their inclusion is anti-dilutive as
of December 30, 2009 and 2008.
  Recently
Issued Accounting Pronouncements
 
 In June
2009, the FASB issued FASB Accounting Standards Codification No. 860 Transfers and
Servicing.  FASB Accounting Standards Codification No. 860
improves the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. FASB Accounting Standards
Codification No. 860 is effective as of the beginning of each reporting entity’s
first annual reporting period that begins after November 15, 2009, for interim
periods within that first annual reporting period and for interim and annual
reporting periods thereafter. The Company is evaluating the impact the adoption
of FASB Accounting Standards Codification No. 860 will have on its financial
statements.
 
 In June
2009, the FASB issued FASB Accounting Standards Codification No. 810, Consolidation. FASB
Accounting Standards Codification No. 810 improves financial reporting by
enterprises involved with variable interest entities. FASB Accounting Standards
Codification No. 810 is effective as of the beginning of each reporting entity’s
first annual reporting period that begins after November 15, 2009, for interim
periods within that first annual reporting period, and for interim and annual
reporting periods thereafter. The Company is evaluating the impact the adoption
of FASB Accounting Standards Codification No. 810 will have on its financial
statements.
 
 In June
2009, the FASB issued FASB Accounting Standards Codification No. 105, GAAP. The FASB Accounting
Standards Codification (“Codification”) will be the single source of
authoritative nongovernmental U.S. generally accepted accounting principles.
Rules and interpretive releases of the SEC under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. FASB Accounting
Standards Codification No. 105  is effective for interim and annual
periods ending after September 15, 2009. All existing accounting standards are
superseded as described in FASB Accounting Standards Codification No. 105. All
other accounting literature not included in the Codification is
nonauthoritative. The adoption of the Codification did not have on a significant
impact on the Company’s financial statements.
  Item 7A. Quantitative and
Qualitative Disclosures About Market Risk.
 
 Not
required for smaller reporting companies.
 
 Item 8. Financial Statements
and Supplementary Data
 
 The
financial statements of the Company, together with the Reports of Independent
Registered Public Accounting Firm thereon of Webb & Company, P.A., appear
herein. See Index to Financial Statements, appearing on page F-1.
 
 Item 9. Changes In and
Disagreements With Accountants on Accounting and Financial
Disclosure
 
 There
have been no changes in or disagreements with accountants on accounting or
financial disclosure matters.
 
 8
 
  Item
9A.   Controls and Procedures.
 
 a)  
Evaluation of Disclosure
Controls. Jesper Toft, our Chief Executive Officer and Principal
Accounting Officer, evaluated the effectiveness of our disclosure controls and
procedures as of the end of our fourth fiscal quarter 2009 pursuant to Rule
13a-15(b) of the Securities and Exchange Act. Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act is accumulated and communicated to our management,
as appropriate to allow timely decisions regarding required disclosure. Based on
their evaluations, Jesper Toft concluded that our disclosure controls and
procedures were effective as of December 31, 2009.
  (b)  Management’s
Annual 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
statement for external purposes in accordance with U.S. 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 U.S. 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.
 
 Any
system of internal control, no matter how well designed, has inherent
limitations, including the possibility that a control can be circumvented or
overridden and misstatements due to error or fraud may occur and not be detected
in a timely manner. Also, because of changes in conditions, internal control
effectiveness may vary over time. Accordingly, even an effective system of
internal control will provide only reasonable assurance with respect to
financial statement preparation. In addition, the design of any system of
controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures. Therefore, any current
evaluation of controls can not and should not be projected to future
periods.
 
 Based on
management's assessment, management has concluded that the Company's internal
control over financial reporting was effective as of December 31, 2009 to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external reporting purposes in
accordance with U.S. generally accepted accounting principles.
 
 This
Report does not include an attestation report of registered public accounting
firm, regarding internal control over financial reporting. Management’s report
was not subject to attestation by the Company’s registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission that
permit the Company to provide only management’s report in
this  Report.
 It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events. Because of these
and other inherent limitations of control systems, there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions.
 
 (c)
  Changes in internal
control over financial reporting. There have been no changes in our
internal control over financial reporting that occurred during the last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. Our management team will
continue to evaluate our internal control over financial reporting in 2010 as we
implement our Sarbanes Oxley Act testing.
 
 
 9
    PART
III
 
 Item
10.  Directors, Executive Officers and Corporate
Governance
 
 Our
executive officer’s and director’s and their respective ages as of March 22,
2010 are as follows:
  NAME
                AGE
                POSITIONJesper
      Toft
                39
                Chairman
      of the Board of Directors, Chief Executive Officer, Chief Financial
      OfficerDavid
      J.P. Meachin
                69
                Member
      of the Board of DirectorsRobert
      J. Lynch, Jr.
                76
                Member
      of the Board of Directors
 
 Set forth
below is a brief description of the background and business experience of our
sole executive officer and our directors for the past five years.
 
 Jesper
Toft, Chairman, CEO, CFO
 
 Mr. Toft
has been the owner of Toft ApS since May 2003, a Denmark-based company, which
provides business development for companies.  Mr. Toft has extensive
management experience from several start-up companies. His core competence is
business development, strategy, building sales and marketing and financing. Mr.
Toft has been advising large enterprises regarding strategic development and
participated in contract negotiations since 1997.
 
 Term of
Office
 
 Our sole
executive officer and one of our directors, Jesper Toft, was appointed to the
offices of Chief Executive Officer, Chief Financial Officer and Chairman on
April 18, 2008 until the first board meeting of the board of directors ensuing
after the next annual meeting of shareholders and until their respective
successors in said offices are duly elected and qualified or until his earlier
resignation or removal by the board.
 
 David
J.P. Meachin, Member of the Board of Directors
 
 Mr.
Meachin has has served on public company boards for over 15 years, during which
time he has been a member of the executive committee, chairman of the audit
committee, and member of the compensation and governance
committees.  Mr. Meachin is founder, chairman, and CEO of Cross Border
Enterprises, L.L.C., a New York based internationally-oriented boutique
investment bank focused on the needs of technology companies. Prior to founding
the firm he spent 20 years on Wall Street as a Managing Director in Investment
Banking at Merrill Lynch and previously at Salomon Brothers, during which time
he lived and worked in New York, London and Tokyo.  David Meachin
received his MBA with Distinction from Harvard Business School.
   10
  Term of
Office
 
 One of
our directors, David J.P. Meachin, was appointed to the office of board
member on October 30, 2009 for a three year term.
  Robert J.
Lynch, Jr., Member of the Board of Directors
 
 Mr. Lynch
has developed strong and lasting business relationships and experience over more
than thirty years covering the U.S., Europe and Latin America - particularly in
the fields of business development, M&A, finance and marketing. He has
served on public and private corporate boards and their special committees.
Robert Lynch has also acted as advisor/ strategist for many of the boards he has
served on. Among these boards have been prominent engineering and contracting
firms in the US and Europe as well as the boards of industrial development
banks in Latin America and in Washington, DC.
 
 Term of
Office
 
 One of
our directors, Robert J. Lynch, Jr., was appointed to the office of board
member on October 30, 2009 for a three year term.
 
 Item
11.  Executive Compensation
 
 Summary Compensation Table;
Compensation of Executive Officers
 
 The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers earned by us during the
period from April 18, 2008 (Inception) to December 31, 2009 in all capacities
for the accounts of our executives, including the Chief Executive Officer (CEO)
and Chief Financial Officer (CFO):
 
 SUMMARY
COMPENSATION TABLE
 
 Name
      and Principal Position
                  
                  Year
                  
                  Salary
                    ($)
                  
                  Bonus
                    ($)
                  
                  Stock
      Awards
                    ($)
                  
                  Option
      Awards
                    ($)
                  
                  Non-Equity Incentive Plan
      Compensation ($)
                  
                  Non-Qualified
      Deferred Compensation Earnings
                    ($)
                  
                  All
      Other Compensation
                    ($)
                  
                  Totals
                    ($)Jesper
      Toft:CEO,
      CFO,
                  
                  2009
                  
                  56,000
                  
                  0
                  
                  0
                  
                  0
                  
                  0
                  
                  0
                  
                  0
                  
                  56,000Chairman
                  
                  2008
                  
                  8,000
                  
                  0
                  
                  50,000
                  
                  0
                  
                  0
                  
                  0
                  
                  0
                  
                  58,000
 
 Option Grants
Table.There were
no individual grants of stock options to purchase our common stock made to the
executive officers named in the Summary Compensation Table through December 31,
2009.
 
 Aggregated
Option Exercises and Fiscal Year-End Option Value Table.There were no stock options
exercised during the years ended December 31, 2009 and 2008 by the executive
officers named in the Summary Compensation Table.
 
 Long-Term Incentive Plan
(“LTIP”) Awards Table.There were no awards made to the named executive officer in the last two
completed fiscal years under any LTIP.
 
 Compensation of
Directors
 
 Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors.  The directors were paid a total of $3,158 and
none  in the year ending December 31, 2009 and the period from April
18, 2008 (Inception) to December 31, 2008.
  11
   Name
      and Principal Position
                
                Year
                
                Stock
      Awards
                  ($)
                
                Totals
                  ($)Jesper
      Toft:
                
                2009
                
                -
                
                -CEO,
      CFO, Chairman
                
                2008
                
                -
                
                -David
      J.P. Meachin
                
                2009
                
                1,579
                
                1,579Director
                
                2008
                
                -
                
                -Robert
      J. Lynch, Jr.
                
                2009
                
                1,579
                
                1,579Director
                
                2008
                
                -
                
                -
  Employment
Agreements
 
 As of
December 31, 2009, we do not have an employment agreement in place with our sole
officer and chairman of our board of directors.
 
 Board of Director
Agreements
 
 On
October 30, 2009, the Company entered into two Board of Director Agreements,
with Robert J. Lynch Jr. and David J.P. Meachin, respectively, that
lasts until December 31, 2012.  During October 2009, the Company
issued 1,000,000 in total to these two Board of Directors for services
through December 31, 2012.  The common stock has a fair value of
$60,000 based on the fair value on the date of grant and will be amortized over
the life of the services ($0.06 per share).  For the year ended
December 31, 2009, the Company has recognized board compensation expense of
$3,158 under the agreement.
 
 Item 12. Security Ownership
of Certain Beneficial Owners and Management
 
 The
following table provides the names and addresses of each person known to us to
own more than 5% of our shares to be issued of common stock as of March 30, 2010
and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.
  Title
      of Class
                Name
      and Address
                  of
      Beneficial Owner
                Amount
      and Nature
                  of
      Beneficial Owner
                Percent
                  of
      ClassCommon
      Stock
                Toft
      ApS
                  Roennegade
      9,
                  2100
      Copenhagen Oe,
                  Denmark
                10,000,000
                44.21%
      (1)Common
      Stock
                All
      executive officers and directors as a group
                11,000,000
                48.63%
      (1)Common
      Stock
                ViMachel
                  Londegaardsvei
      9
                  2900
      Hellerup,
                  Denmark
                10,000,000
                44.21%
      (1)Series
      A Convertible
                  Preferred
      Stock
                Jesper
      Toft
                  Frisersvej
      22 C
                  2920
      Copenhagen Oe,
                  Denmark
                100,000
                100.00%Series  Convertible  B
                  Preferred
      Stock
                ViMachel
                  Londegaardsvei
      9
                  2900
      Hellerup,
                  Denmark
                100,000
                100.00%
  (1)  Based
upon 22,620,030 common shares issued and outstanding as of March 30,
2010.
  12
 
 
 Item 13.  Certain
Relationships and Related Transactions, and Director
Independence
 
 The
agreement with Visator regarding the Separation and Distribution Agreement is no
longer relevant as our prior activities have been stopped.  On May 30,
2008, pursuant to a Separation and Distribution Agreement, we were spun out from
Visator, Inc., ceasing to be their wholly owned subsidiary.  Visator
was one of two customers.  The agreement with Visator expired on June
1, 2009 and was not renewed.
 
 Our sole
officer and director, Jesper Toft, is also the sole officer and director of
Visator, Inc.
 
 On June
30, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,000 to pay for incorporation filing fees of the
Company.
 
 On July
24, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,789 to pay for the Company’s website and
design.
 
 On July
23, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $64 to pay for incorporation filing fees of the
Company.
 
 On July
2, 2008, we executed a $35,000 promissory note to Toft ApS, a wholly owned
company of Jesper Toft, the Chief Executive Officer, President and Director of
the Company, in exchange for $35,000 cash.  The note is due on demand
and bears no interest.
 
 On July
16, 2008, we authorized the issuance of 100,000 Series A Convertible Preferred
Stock to Jesper Toft, the Chief Executive Officer, at its par value of
$0.001.  This compensation was for services rendered in relation to
the filing of the Company’s registration statement. As of December 31, 2008, the
Company had recorded the fair value of $50,000 as a consulting fee to Jesper
Toft.
 
 On August
18, 2008, the Company received a loan from Toft ApS, a wholly owned company of
Jesper Toft, the Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial Officer of the Company, in the amount of $10,000 for funding the
Company’s operating expenses.  The note is due on demand, unsecured
and bears no interest.
 
 On June
8, 2009, the Company received a loan from Toft ApS, a wholly owned company of
Jesper Toft, the Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial Officer of the Company, in the amount of $627 for funding the
Company’s tax expense.  The loan is due on demand, unsecured and bears
no interest.
 
 During
2009, the Company received a loan from Toft ApS, a wholly owned company of
Jesper Toft, the Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial Officer of the Company, in the amount of $1,153 for funding the
Company’s operating expenses.  The loan is due on demand, unsecured
and bears no interest.
 
 Item 14. Principal
Accountant Fees and Services
 
 Audit
Fees
 
 Audit
fees for 2009 were $13,238.  Audit fees for
2008 were $8,933.  All services provided by independent
accountants were approved by the audit committee.  Audit Fees consist
of fees billed for professional services rendered for the audit of the Company’s
registration and annual statements, for review of interim financial statements
included in quarterly reports and services that are normally provided by Webb
& Company P.A. in connection with statutory and regulatory filings or
engagements.
 
 Audit
Related Fees
 
 The
Company did not incur non audit related fees from Webb & Company
P.A. in 2009 or 2008.  Audit-Related Fees consist of fees billed
for assurance and related services that are reasonably related to the
performance of the audit or review of the Company’s financial statements and are
not reported under “Audit Fees.”
 
 Tax
Fees
 
 The
Company did not incur tax fees from Webb & Company P.A. in 2009 or
2008.  Tax Fees consist of fees billed for professional services
rendered for tax compliance. These services include assistance regarding
federal, state and local tax compliance.
 
 13
 
 
 
 All Other
Fees
 
 The
Company did not incur any other fees from Webb & Company P.A. in 2009 or
2008.
 
 Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us to render any auditing or permitted
non-audit related service, the engagement be:
 
 -approved
by our audit committee; or
 
 -entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular  service,  the  audit committee is
informed of each service, and such policies and procedures do not include
delegation of the audit committee's responsibilities to management.
 
 We do not
have an audit committee.  Our entire board of directors pre-approves
all services provided by our independent auditors.
 
 The
pre-approval process has just been implemented in response to the new rules.
Therefore, our board of directors does not have  records
of  what percentage of the above fees were
pre-approved.  However, all of the above services and fees were
reviewed and approved by the entire board of directors either before or after
the respective services were rendered.
 
 
 14
 
 
 
 
 PART
IV
 
 
 Item 15.  Exhibits
and Financial Statement Schedules
 
 (a)      Exhibits
and Financial Statements
 
 (1)      Financial
Statements.  See Index to Financial Statements
 
 (2)     
Financial Statement Schedules. See pages 15
through 27, attached
 
 (3)       Exhibits
 
 
 
 
 15
 
 METHA
ENERGY SOLUTIONS INC.
 (FORMERLY
INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 FORM
10-K
 YEAR
ENDED DECEMBER 31, 2009
 
 
 TABLE OF
CONTENTS
 
 PagePART
      I - FINANCIAL INFORMATIONReport
      of Independent Registered Public Accounting Firm
                16Balance
      Sheets at December 31, 2009 and December 31, 2008
                17Statements
      of Operations for the Year ended December 31, 2009, the Period from April
      18, 2008 (Inception) through December 31, 2008 and the Period from April
      18, 2008 (Inception) through December 31, 2009
                18Statement
      of Changes in Stockholders' Equity (Deficit) for the period from April 18,
      2008 (Inception) through December 31, 2009
                19Statements
      of Cash Flows for the Year ended December 31, 2009, the Period from April
      18, 2008 (Inception) through December 31, 2008 and the Period from April
      18, 2008 (Inception) through December 31, 2009
                20Notes
      to the Financial Statements
                21-27
  
 
 16
 
 
 Webb
      & Company, PA.Certified
      Public Accountants
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors of:
 Metha
Energy Solutions Inc.(f/k/a Inscrutor, Inc.)
 (A
Development Stage Company)
 
 We have
audited the accompanying balance sheets of Metha Energy Solutions Inc. (f/k/a
Inscrutor Inc.) (a Development Stage Company) (the “Company”) as of December 31,
2009 and 2008 and the related statements of operations, changes in stockholders’
equity (deficit) and cash flows for the year ended December 31, 2009, the period
April 18, 2008 (Inception) to December 31, 2008 and the period April 18, 2008
(Inception) to December 31, 2009. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Metha Energy Solutions Inc. (f/k/a
Inscrutor Inc.) (a Development Stage Company) as of December 31, 2009 and 2008
and the related statement of operations and cash flows for the year ended
December 31, 2009, the period April 18, 2008 (Inception) to December 31, 2008
and the period April 18, 2008 (Inception) to December 31, 2009, in conformity
with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company is in the development stage with a net loss since
inception of $410,899, a working capital deficiency of $144,956 and net cash
used in operations since inception of $213,532. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.  Management's plans concerning these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
 
 WEBB
& COMPANY, P.A.
 Certified
Public Accountants
 
 Boynton
Beach, Florida
 March 16,
2010
 
 
 17
 
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 
 Balance
Sheet at December 31, 2009 and December 31, 2008
 
 
 December
      31, 2009
                
                
                December
      31, 2008ASSETSCurrent
      Assets:Cash
                
                $
                5,785
                
                
                $
                49Accounts
      receivable, net
                
                
                65,000
                
                
                
                9,000Total
      Current Assets
                
                
                70,785
                
                
                
                9,049Property,
      Plant & Equipment:Website
      costs, net of accumulated amortization of $858 and $261,respectively
                
                
                931
                
                
                
                1,528Computer
      equipment, net of accumulated depreciation of $38 and
none,respectively
                
                
                1,109
                
                
                
                -2,040
                
                
                
                1,528Other
      Assets:Security
      deposit
                
                
                465
                
                
                
                465Investment
      in Serenergy
                
                
                402,780
                
                
                
                -TOTAL
      ASSETS
                
                $
                476,070
                
                
                $
                11,042LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      Liabilities:Accounts
      payable and accrued expenses
                
                $
                136,365
                
                
                $
                17,618Accrued
      expenses - related party
                
                
                29,743
                
                
                
                3,000Loans
      payable - related party
                
                
                2,853
                
                
                
                2,853Notes
      payable - related party
                
                
                46,780
                
                
                
                45,000TOTAL
      LIABILITIES
                
                
                215,741
                
                
                
                68,471COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITY (DEFICIT)Series
      A Convertible Preferred stock - $.001 par value; 100,000
      sharesauthorized;
      100,000 and 100,000 to be issued
                
                
                100
                
                
                
                100Series
      B Convertible Preferred stock - $.001 par value; 100,000
      sharesauthorized;
      100,000 and none to be issued
                
                
                100
                
                
                
                -Preferred
      stock - $.001 par value; 9,800,000 shares authorized;none
      and none issued and outstanding, respectively
                
                
                -
                
                
                
                -Common
      stock - $.001 par value; 100,000,000 shares authorized;22,620,030
      and 11,350,030 shares to be issued, respectively
                
                
                22,620
                
                
                
                11,350Additional
      paid-in capital
                
                
                716,555
                
                
                
                73,624Deferred
      Compensation
                
                
                (56,842
                )
                
                
                -Accumulated
      deficit during the development stage
                
                
                (422,204
                )
                
                
                (142,503
                )TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)
                
                
                260,329
                
                
                
                (57,429
                )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                
                $
                476,070
                
                
                $
                11,042
 See
accompanying notes to the financial statements.
 
 18
 
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 
 Statements
of Operations
 For
the Year ended December 31, 2009 and the Period from April 18, 2008 (Inception)
through December 31, 2008 and
 Period
from April 18, 2008 (Inception) through December 31, 2009
 
  Twelve
      months ended December 30, 2009
                
                
                April
      18, 2008 (Inception) - December 31, 2008
                
                
                April
      18, 2008 (Inception) - December 31, 2009REVENUE
                
                $
                65,000
                
                
                $
                -
                
                
                $
                65,000REVENUE
      - Related Party
                
                
                15,000
                
                
                
                21,000
                
                
                
                36,00080,000
                
                
                
                21,000
                
                
                
                101,000COST
      OF GOODS SOLD
                
                
                61,750
                
                
                
                8,050
                
                
                
                69,800GROSS
      PROFIT
                
                
                18,250
                
                
                
                12,950
                
                
                
                31,200Selling,
      general & administrative expenses:Consulting
      fees and services - related party
                
                
                56,000
                
                
                
                58,000
                
                
                
                114,000Professional
      fees
                
                
                180,731
                
                
                
                79,174
                
                
                
                259,905Board
      member fees
                
                
                3,158
                
                
                
                -
                
                
                
                3,158Other
      general & administrative expenses
                
                
                51,014
                
                
                
                5,705
                
                
                
                56,719Total
      operating expenses
                
                
                290,903
                
                
                
                142,879
                
                
                
                433,782Loss
      from operations
                
                
                (272,653
                )
                
                
                (129,929
                )
                
                
                (402,582
                )Other
      expense:Gain
      on Foreign Currency
                
                
                2,628
                
                
                
                -
                
                
                
                2,628Interest
      income
                
                
                25
                
                
                
                -
                
                
                
                25Interest
      expense
                
                
                (2,701
                )
                
                
                (1,269
                )
                
                
                (3,970
                )Bad
      debt expense-related party
                
                
                (7,000
                )
                
                
                -
                
                
                
                (7,000
                )Total
      other expense
                
                
                (7,048
                )
                
                
                (1,269
                )
                
                
                (8,317
                )NET
      LOSS BEFORE PROVISION FOR INCOME TAXES
                
                
                (279,701
                )
                
                $
                (131,198
                )
                
                
                (410,899
                )Provision
      for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -NET
      LOSS
                
                $
                (279,701
                )
                
                
                (131,198
                )
                
                $
                (410,899
                )Basic
      and diluted net loss per weighted-average shares common
    stock
                
                $
                (0.02
                )
                
                $
                (0.01
                )Basic
      and diluted weighted-average number of shares of common stock to
      be issued
                
                
                14,899,336
                
                
                
                11,336,898
  See
accompanying notes to the financial statements.
 
 19
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 
 Statement
of Changes in Stockholders' Equity (Deficit)
 For
the Period from April 18, 2008 (Inception) through December 31,
2009
 
  Common
      Stock
                  
                  
                  Series
      A
                    Convertible
                    Preferred
      Stock
                  
                  
                  Series
      B
                    Convertible
                    Preferred
      Stock
                  
                  
                  AdditionalPaid-in
                  
                  
                  Deferred
                  
                  
                  Accum-ulatedDeficit
      during theShares
                  
                  
                  Par
      Value
                  
                  
                  Shares
                  
                  
                  Par
      Value
                  
                  
                  Shares
                  
                  
                  Par
      Value
                  
                  
                  Capital
                  
                  
                  Compe-nsation
                  
                  
                  development
      stage
                  
                  
                  TotalBalance
      April 18, 2008 (Inception)
                  
                  
                  11,305,030
                  
                  
                  $
                  11,305
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  (11,305
                  )
                  
                  $
                  -Series
      A Preferred stock issued for consulting services - related
      party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  100,000
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  49,900
                  
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  50,000Common
      stock issued for professional services
                  
                  
                  45,000
                  
                  
                  
                  45
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  22,455
                  
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  22,500In-kind
      contribution of interest expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,269
                  
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  1,269Net
      loss for the period from April 18, 2008 (inception) to December 31,
      2008
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  (131,198
                  )
                  
                  
                  (131,198
                  )Balance
      December 31, 2008
                  
                  
                  11,350,030
                  
                  
                  
                  11,350
                  
                  
                  
                  100,000
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  73,624
                  
                  
                  
                  -
                  
                  
                  
                  (142,503
                  )
                  
                  
                  (57,429
                  )Series
      B Preferred stock and Common stock sold for cash
                  
                  
                  10,000,000
                  
                  
                  
                  10,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  100,000
                  
                  
                  
                  100
                  
                  
                  
                  565,300
                  
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  575,400Common
      stock issued for professional services
                  
                  
                  1,270,000
                  
                  
                  
                  1,270
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  74,930
                  
                  
                  
                  (56,842
                  )
                  
                  
                  -
                  
                  
                  
                  19,358In-kind
      contribution of interest expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,701
                  
                  
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  2,701Net
      loss for the year ended December 31, 2009
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (279,701
                  )
                  
                  
                  (279,701
                  )Balance
      December 31, 2009
                  
                  
                  22,620,030
                  
                  
                  $
                  22,620
                  
                  
                  
                  100,000
                  
                  
                  $
                  100
                  
                  
                  
                  100,000
                  
                  
                  $
                  100
                  
                  
                  $
                  716,555
                  
                  
                  $
                  (56,842
                  )
                  
                  $
                  (422,204
                  )
                  
                  $
                  260,329
  See
accompanying notes to the financial statements.
 
 20
 
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 
 Statements
of Cash Flows
 For
the Year ended December 31, 2009, the Period from April 18, 2008 (Inception)
through December 31, 2008 and the
 Period
from April 18, 2008 (Inception) through December 31, 2009
   Twelve
      months ended December 31, 2009
                
                
                For
      the Period April 18, 2008 (Inception) - December 31, 2008
                
                
                For
      the Period April 18, 2008 (Inception) - December 31, 2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                
                $
                (279,701
                )
                
                $
                (131,198
                )
                
                $
                (410,899
                )Adjustments
      to reconcile net loss to cash provided by (used in) operating
      activities:Series
      A Convertible Preferred Stock issued for services - related
      party
                
                
                -
                
                
                
                50,000
                
                
                
                50,000Common
      stock Issued for services - related party, professional and board
      fees
                
                
                19,358
                
                
                
                22,500
                
                
                
                41,858In-kind
      contribution of interest expense
                
                
                2,701
                
                
                
                1,269
                
                
                
                3,970Bad
      debt expense-related party
                
                
                7,000
                
                
                
                -
                
                
                
                7,000Depreciation
      and Amortization expense
                
                
                635
                
                
                
                261
                
                
                
                896Changes
      in operating assets and liabilities:Increase
      in accounts receivable
                
                
                (56,000
                )
                
                
                -
                
                
                
                (65,000
                )Increase
      in accounts receivable-related party
                
                
                (7,000
                )
                
                
                (9,000
                )
                
                
                (7,000
                )Increase
      in other assets
                
                
                -
                
                
                
                (465
                )
                
                
                (465
                )Increase
      in accounts payable and accrued expenses
                
                
                118,747
                
                
                
                17,618
                
                
                
                136,365Increase
      in accounts payable and accrued expenses-related party
                
                
                26,743
                
                
                
                3,000
                
                
                
                29,743NET
      CASH USED IN OPERATING ACTIVITIES
                
                
                (167,517
                )
                
                
                (46,015
                )
                
                
                (213,532
                )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property, plant & equipment
                
                
                (1,147
                )
                
                
                (1,789
                )
                
                
                (2,936
                )Serenergy  Equity
      investment
                
                
                (402,780
                )
                
                
                -
                
                
                
                (402,780
                )NET
      CASH USED IN INVESTING ACTIVITIES
                
                
                (403,927
                )
                
                
                (1,789
                )
                
                
                (405,716
                )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from sale of common stock and series B preferred stock
                
                
                575,400
                
                
                
                -
                
                
                
                575,400Proceeds
      from loans payable -related party
                
                
                -
                
                
                
                2,853
                
                
                
                2,853Proceeds
      from notes payable - Toft Aps. related party
                
                
                1,780
                
                
                
                45,000
                
                
                
                46,780NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                577,180
                
                
                
                47,853
                
                
                
                625,033NET
      INCREASE IN CASH
                
                
                5,736
                
                
                
                49
                
                
                
                5,785Cash,
      beginning of period
                
                
                49
                
                
                
                -
                
                
                
                -Cash,
      END OF PERIOD
                
                $
                5,785
                
                
                $
                49
                
                
                $
                5,785Supplementary
      disclosures of cash flow informationCash
      paid during the period for:Income
      taxes
                
                $
                -
                
                
                $
                -
                
                
                $
                -Interest
      paid
                
                $
                -
                
                
                $
                -
                
                
                $
                -
 See
accompanying notes to the financial statements.
 
 21
 
 METHA
ENERGY SOLUTIONS INC. (FORMERLY INSCRUTOR, INC.)
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES TO
THE FINANCIAL STATEMENTS
 
 NOTE
1 – ORGANIZATION
 
 Effective
October 12, 2009, the Company changed their name to Metha Energy Solutions
Inc.  (“Metha Energy” or “the Company” or “formerly Inscrutor”)
(OTCBB: MGYS).  Metha Energy focuses the business on commercializing
advanced fuel cell technology.   The Company has secured the
rights to distribute for such patent pending products and represent these
products in the North American market and within the global vehicle
segment.  Activities during the development stage involve developing
the business plan and raising capital.
 
 The
Company was founded  as Inscrutor, Inc.  (“Inscrutor”), a
development stage company, that was incorporated on April 18, 2008 under the
laws of the State of Delaware.  The technology that the Company owned
was acquired via a Separation and Distribution Agreement on May 30, 2008 from
Visator, Inc. (“Visator”), a Delaware corporation that specializes in on-line
media monitoring. Prior to that time, Inscrutor was a wholly-owned subsidiary of
Visator. Inscrutor was spun out from Visator with the purpose of ensuring
optimal value-creation for the shareholders of both Inscrutor and
Visator.  According to the terms of the Separation Agreement, Visator
decided to distribute the common stock of Inscrutor on a 1-for-1 basis to the
holders of Visator’s common and preferred stock (“the Distribution”). On June 1,
2008 (the "Distribution Date"), Visator transferred its shares of Inscrutor
to the shareholders of record of Visator common stock and preferred stock
at the close of business on May 30, 2008 (the "Record Date"), without any
consideration being paid by such holders. As of October 9, 2008, the stock
certificates were delivered to shareholders.  The Company derived
revenue from a management services agreement with Visator.  The
agreement with Visator expired on June 1, 2009 and was not renewed. As of
September 30, 2009 the Company wrote off the $7,000 receivable balance from
Visator as the balance was deemed uncollectible. We no longer pursue any
commercialization of software/technology nor do we invest in what we acquired
from the Separation and Distribution agreement on May 30, 2008.
 
 From the
end of August, 2009, in connection with entering the agreement with
Serenergy the Company decided to cease any further activity in the area of
sophisticated data-mining technology.
 
 NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
 
 Going
concern
 
 The
accompanying financial statements have been prepared under a going concern basis
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. However, the Company is in the development stage
with a net loss since inception of $410,899, a working capital deficiency of
$144,956 and net cash used in operations since inception of $213,532. These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. The Company does not have enough cash to continue operations for
twelve months without receiving additional debt or equity financing or
increasing our revenues.
 
 Management
believes that the actions presently being taken and the success of future
operations will be sufficient to enable the Company to continue as a going
concern.
 
 However,
there can be no assurance that the raising of equity will be successful and that
the Company’s anticipated financing will be available in the future, at terms
satisfactory to the Company. Failure to achieve the equity and financing at
satisfactory terms and amounts could have a material adverse effect on the
Company’s ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
 Use
of estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Revenue
recognition
 
 The
Company’s revenues are derived from sales of fuel cell technology. The Company
follows the guidance of the Securities and Exchange Commission’s Commission’s
FASB Accounting Standards Codification No. 605 for revenue recognition. The
Company will recognize revenue when it is realized or realizable and earned. The
Company considers revenue realized or realizable and earned when it has
persuasive evidence of an arrangement that the services have been rendered to
the customer, the sales price is fixed or determinable, the item has been
shipped and collectability is reasonably assured.
     22
  NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
 
 Cash
and cash equivalents
 
 For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.
 
 Website
Development Costs
 
 The
Company has adopted the provisions of FASB Accounting Standards Codification No.
350 Intangible-Goodwills and
Other. Costs incurred in the planning stage of a website are expensed,
while costs incurred in the development state are capitalized and amortized over
the estimated three year life of the asset. For the year ended December 31, 2009
and the period ended December 31, 2008, the Company paid $0 and $1,789,
respectively to develop its website.
 
 Investments
 
 Equity
investments in companies over which the Company has no ability to exercise
significant influence are accounted for under the cost method.  The Company’s holds
approximately 11% of Serenergy’s issued and outstanding shares as of December
31, 2009.  The Company’s investment in Serenergy is accounted for
based on the cost method.
 
 Income
taxes
 
 The
Company follows FASB Accounting Standards Codification No. 740, Income Taxes. Under the asset
and liability method of FASB Accounting Standards Codification No. 740, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. A valuation
allowance can be provided for a net deferred tax asset, due to uncertainty of
realization. As of December 31, 2009, the Company has a net operating loss
carryforward of approximately $406,000 available to offset future taxable income
through 2029. The valuation allowance at December 31, 2008 was approximately
$44,000.  The net change in valuation allowance for the year ending
December 31, 2009 was an increase of approximately $94,000.
  2009
                  
                  
                  2008Expected
      income tax recovery (expense) at the statutory rate of 34%
                  
                  $
                  (95,098
                  )
                  
                  $
                  (44,607
                  )Tax
      effect of expenses that are not deductible for income tax purposes (net of
      other amounts deductible for tax purposes)
                  
                  
                  1,308
                  
                  
                  
                  432Tax
      effect of differences in the timing of deductibility of items for income
      tax purposes
                  
                  
                  -
                  
                  
                  
                  -Change
      in valuation allowance
                  
                  
                  93,790
                  
                  
                  
                  44,175Provision
      for income taxes
                  
                  $
                  -
                  
                  
                  $
                  -
  The
components of deferred income taxes are as follows:
  2009
                
                
                
                2008Deferred
      income tax asset:Net
      operating loss carryforwards
                
                $
                (137,965
                )
                
                $
                (44,175
                )Valuation
      allowance
                
                
                137,965
                
                
                
                44,175Deferred
      income taxes
                
                $
                -
                
                
                $
                -
  Net
loss per common share
 
 Net loss
per common share is computed pursuant to FASB Accounting Standards Codification
No. 260, Earnings Per
Share.  Basic net loss per share is computed by dividing net
loss by the weighted average number of shares of common stock outstanding during
the period. Diluted net loss per share is computed by dividing net loss by the
weighted average number of shares of common stock and potentially outstanding
shares of common stock during each period. 100,000 Series A convertible and
100,000 Series B convertible preferred shares were omitted from the calculation
of earnings per share- diluted as their inclusion is anti-dilutive as of
December 31, 2009 and 2008.
 
 Fair
Value of Financial Instruments
 
 The
carrying amounts reported in the balance sheet for the accounts receivable,
accounts receivable-related party, accounts payable and accrued expenses,
accrued expenses - related party, loans payable – related party and notes
payable – related party approximate fair value based on the short-term maturity
of these instruments.
 
 Recently
Issued Accounting Pronouncements
 
 In June
2009, the FASB issued FASB Accounting Standards Codification No. 860, Transfers and
Servicing.  FASB Accounting Standards Codification No. 860
improves the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. FASB Accounting Standards
Codification No. 860 is effective as of the beginning of each reporting entity’s
first annual reporting period that begins after November 15, 2009, for interim
periods within that first annual reporting period and for interim and annual
reporting periods thereafter. The Company is evaluating the impact the adoption
of FASB Accounting Standards Codification No. 860 will have on its financial
statements.
 
 
 23
  
 NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
 
 Recently
Issued Accounting Pronouncements continued
  Consolidation
  In June
2009, the FASB issued FASB Accounting Standards Codification No. 105, GAAP. The FASB Accounting
Standards Codification (“Codification”) will be the single source of
authoritative nongovernmental U.S. generally accepted accounting principles.
Rules and interpretive releases of the SEC under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. FASB Accounting
Standards Codification No. 105  is effective for interim and annual
periods ending after September 15, 2009. All existing accounting standards are
superseded as described in FASB Accounting Standards Codification No. 105. All
other accounting literature not included in the Codification is
nonauthoritative. The adoption of the Codification did not have on a significant
impact on the Company’s financial statements.
 
 NOTE
3 – PROPERTY AND EQUIPMENT
 
 At
December 31, 2009 and December 31, 2008, property and equipment is as
follows:
 
 2009
                
                
                2008Website
      costs
                
                $
                1,789
                
                
                $
                1,789Computer
      equipment
                
                
                1,147
                
                
                
                02,936
                
                
                
                1,789Less
      accumulated depreciation and amortization
                
                
                896
                
                
                
                261$
                2,040
                
                
                $
                1,528
 
 Depreciation
and Amortization expense for the year ended December 31, 2009, the period from
April 18, 2008 (inception) to December 31, 2008 and for the period April 18,
2008 (inception) to December 31, 2009 was $635, $261 and $896,
respectively.
 
 NOTE
4 – INVESTMENT AGREEMENT
 
 On August
27, 2009, the Company entered into an exclusive distribution agreement (the
“Agreement”) with Serenergy A/S (“Serenergy”) where the Company was appointed by
Serenergy as its exclusive distributor of Serenergy’s products in the United
States, Canada, Israel and the United Nations (“The Territory”) for 72 months.
The exclusivity period was amended and will lapse in August 2010 if the Company
has not raised $1,500,000 of additional capital. As of December 31, 2009, the
Company has not raised any money under this agreement.
 
 On August
27, 2009 the Company entered into an exclusive distribution and manufacturing
license agreement - vehicles (the “License Agreement”) with Serenergy where the
Company was appointed by Serenergy as its exclusive distributor of Serenergy’s
fuel cell related products to the segment of vehicles (the “Segment”) for 72
months. The exclusivity period was amended and will lapse in August 2010 if the
Company has not raised $1,500,000 of additional capital.  As of
December 31, 2009, the Company has not raised any money under this
agreement.
 
 In
connection with both agreements, the Company will set up a sales office in the
United States which will provide the base of operation in order to develop
potential customers within the Territory and within the Segment.
 
 On August
27, 2009 the Company made an investment in Serenergy for 84,000 shares of
Serenergy stock, or approximately 11% of the issued and outstanding shares, for
approximately $402,000. The Company recognized the investment under the cost
method of accounting. As of December 31, 2009, the Company owns approximately
11% of the issued and outstanding shares of Serenergy.
 
 NOTE
5 – CONCENTRATION RISK
 
 Cash
 
 The
Company maintains cash balances at several financial institutions. Accounts at
these institutions are insured by the Federal Deposit Insurance Corporation in
the aggregate up to $250,000 at December 31, 2009 and 2008.  The
Company also maintains cash balances at financial institutions in Denmark and
accounts at these institutions are not insured by the Federal Deposit Insurance
Corporation.  At December 31, 2009, the Company had a cash balance of
approximately $5,715 at a financial institution in Denmark.
 
 Major
Customers
 
 For the
year ended December 31, 2009, the period from April 18, 2008 (inception) to
December 31, 2008 and the period from April 18, 2008 (inception) to December 31,
2009, the Company had two customers, who accounted for 100% of total revenues in
the amount of $80,000, $21,000 and $101,000, respectively.  One
customer, Visator contributed $15,000, $21,000 and $36,000, respectively. This
customer is a related party.  The agreement with Visator expired on June 1,
2009 and was not renewed.  The other customer, contributed $65,000,
none, and $65,000, respectively.  The Company plans to greatly expand
their customer base in the upcoming year to mitigate this risk (See Note
11).
   24
 
 Accounts
Receivable
 
 As of
December 31, 2009, the Company has an accounts receivable balance of $65,000
from a customer that represented 100% of accounts receivable and as of December
31, 2008 an accounts receivable balance of $9,000 from a customer Visator, a
related party, which also represented 100% of the account
balance.
 
 NOTE
6 – LOANS PAYABLE – RELATED PARTY
 
 On June
30, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,000 to pay for incorporation filing fees of the
Company. The loan is due on demand, unsecured and bears no interest (See Note
11).
 
 On July
24, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,789 to pay for the Company’s website and design.
The loan is due on demand, unsecured and bears no interest (See Note
11).
 
 On July
23, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $64 to pay for incorporation filing fees of the
Company. The loan is due on demand, unsecured and bears no interest (See
Note 11).
 
 On June
8, 2009, the Company received a loan from Toft ApS, a wholly owned company of
Jesper Toft, the Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial Officer of the Company, in the amount of $627 for funding the
Company’s tax expense.  The loan is due on demand, unsecured and bears
no interest (See Notes 8 and 11).
 
 During
the year ended December 31, 2009, the Company received a loan from Toft ApS, a
wholly owned company of Jesper Toft, the Chairman of the Board of Directors,
Chief Executive Officer and Chief Financial Officer of the Company, in the
amount of $1,153 for funding the Company’s operating expenses.  The
loan is due on demand, unsecured and bears no interest (See Notes 8 and
11).
 
 NOTE
7 – NOTES PAYABLE – RELATED PARTY
 
 On July
2, 2008, the Company executed a $35,000 promissory note to Toft ApS, a wholly
owned company of Jesper Toft, the Chairman of the Board of Directors, Chief
Executive Officer and Chief Financial Officer of the Company, in exchange for
$35,000 cash.  The note is due on demand, unsecured and bears no
interest (See Notes  8 and 11).
 
 On August
18, 2008, the Company issued a promissory note to Toft ApS, a wholly owned
company of Jesper Toft, the Chairman of the Board of Directors, Chief Executive
Officer and Chief Financial Officer of the Company, in the amount of $10,000 for
funding the Company’s operating expenses.  The note is due on demand,
unsecured and bears no interest (See Notes 8 and 11).
 
 NOTE
8 – STOCKHOLDERS’ EQUITY
 
 The
Company was incorporated on April 18, 2008. The Company authorized 100,000,000
shares of common stock with a par value of $.001 and 10,000,000 shares of
preferred stock with a par value of $.001, of which 100,000 shares are
designated as Series A Convertible Preferred Stock.  Per the
Distribution agreement, as of June 1, 2008, the Company is committed to issuing
11,305,030 shares of common stock, par value $.001, to the shareholders of
Visator.  As of October 9, 2008, the shares were issued (See Note
1).
 
 On July
2, 2008, the Company authorized the issuance of 20,000 shares of common stock to
Anslow & Jaclin LLP for legal services related to the registration of the
Company.  As of December 31, 2008, the Company has recorded the fair
value of $10,000 in legal fees for the share issuance.
 
 On July
2, 2008, the Company authorized the issuance of 25,000 shares of common stock to
Profit Planners, Inc. for accounting services related to the registration of the
Company.  As of December 31, 2008, the Company has recorded the fair
value of $12,500 in consulting fees.
 
 On July
16, 2008, the Company authorized the issuance of 100,000 Series A Convertible
Preferred Stock to Jesper Toft, the Chief Executive Officer.  This
compensation for services is contingent upon the filing of the Company’s
registration statement, which became effective on October 21,
2008.  As of December 31, 2008, the Company has recorded the fair
value of $50,000 in consulting fees to Jesper Toft.
 
 The
Series A Convertible Preferred stockholders are entitled to receive, when and if
declared by the Board of Directors out of funds readily available for the
purpose, dividends payable in cash (the “dividend payment date”).  The
aggregate amount of dividends paid to Series A Convertible Preferred stock shall
be capped at $1,000,000.  After the Series A Convertible Preferred
stock dividends have been paid out, they will have no preference on dividends,
but they will maintain their voting rights.  The Series A Convertible
Preferred stockholders are entitled to 1,000 votes per each share they hold on
all matters submitted to a vote of the stockholders of the
Company.  At any time on or after the issuance date, the holders of
Series A Convertible Preferred shares may convert a portion or all of their
shares into Common stock only on a one to one basis.
   25
 
 On August
27, 2009, of the 10,000,000 shares of preferred stock authorized with a par
value of $.001, the Company designated 100,000
shares as Series B Convertible Preferred Stock (See Note 4).
 
 The
Series B Convertible Preferred stockholders are entitled to receive, when and if
declared by the Board of Directors out of funds readily available for the
purpose, dividends payable in cash (the “dividend payment date”).  The
aggregate amount of dividends paid to Series B Convertible Preferred stock shall
be capped at $570,000. The Series B Convertible Preferred stockholders are
entitled to 1 vote per each share they hold on all matters submitted to a vote
of the stockholders of the Company.  At any time on or after the
issuance date, the holders of Series B Convertible Preferred shares may convert
a portion or all of their shares into Common stock only on a one to one
basis.
 
 On August
27, 2009 the Company sold an investor 10,000,000 shares of common stock with a
par value of $.001 and 100,000 shares of Series B Convertible Preferred stock
with a par value of $.001, for approximately $575,000 ($0.06 per
share).
 
 On August
27, 2009, the Company authorized the issuance of 40,000 shares of common stock
to Soren Bansholt from IT Ventures for finance consulting
services.  For the period from April 18, 2008 (inception) to December
31, 2009, the Company has recorded the fair value of $2,400 in consulting fees
($0.06 per share).
 
 On August
27, 2009, the Company authorized the issuance of 210,000 shares of common stock
to a consultant for consulting services.  For the period from April
18, 2008 (inception) to December 31, 2009, the Company has recorded the fair
value of $12,600 in consulting fees ($0.06 per share).
 
 On
October 29, 2009, the Company authorized the issuance  of 20,000
shares of common stock to a consultant for consulting services
performed for the Company.  For the period from April 18, 2008
(inception) to December 31, 2009 the Company has recorded the fair value of
$1,200 in consulting fees ($0.06 per share).
 
 During
October 2009, the Company authorized the issuance of 1,000,000 shares of common
stock (500,000 each respectively) to two members of the Board of Directors for
services through December 31, 2012.  The common stock has a fair value
of $60,000 based on the fair value on the date of grant and will be amortized
over the life of the services ($0.06 per share).  For the year ended
December 31, 2009, the Company has recognized board compensation expense of
$3,158 under the agreement.
 
 For the
twelve months ended December 31, 2009, for the period April 18, 2008 (inception)
to December 31, 2008,  and for the period April 18, 2008 (inception)
to December 31 2009, $2,701,$1,269 and $3,970, respectively were recorded as an
in kind contribution of interest on related party notes (See Notes 6 and
7).
 
 NOTE
9 – MANAGEMENT AGREEMENT
 
 As part
of the terms of the Separation Agreement described in Note 1, on June 1, 2008,
Visator entered into a twelve month Management Services Agreement with the
Company for consulting services pertaining to software maintenance provided to
Visator’s management. The agreement provides for a management fee of $3,000 per
month to be paid to the Company.   For the year ended December 31,
2009, period from April 18, 2008 (Inception) to December 31, 2008 and the period
from April 18, 2008 (Inception) to December 31, 2009, the Company has recorded
revenue of $15,000, $21,000 and $36,000, respectively to reflect five, seven and
twelve months worth of services, respectively.  The agreement expired
on June 1, 2009 and was not renewed (See Notes 9 and 10).
 
 
 26
 
 
 
 NOTE
10 – COMMITMENTS AND CONTINGENCIES
 
 Operating
lease
 
 The
Company does not currently have an operating lease for their office located in
New York City.  Office expense fees of approximately $200 are paid on
a month to month basis for basic office services.
 
 Consulting
agreement- Related party
 
 Effective
May 1, 2008, the Company entered into a consulting agreement with Jesper Toft,
CEO, to provide consulting services from May 2008 to August 2009 at a rate of
$1,000 per month.  On September 1, 2009, the Company amended the
consulting agreement starting in September 2009 to a rate of $12,000 per month
on a month to month basis.  As of December 31, 2009, the Company has
recorded a related party liability of $29,743 under these agreements and for the
period April 18, 2008 (Inception) to  December 31, 2009 expenses of
$64,000. (See Note 11)
 
 Consulting
agreement
 
 On June
1, 2008, the Company entered into a consulting agreement with a
consultant to provide maintenance services from June 1, 2008 to May 31,
2009 at a rate of $1,150 per month.   As of December 31, 2009,
the Company has recorded a liability, net of repayment, of $6,772 and for the
period April 18, 2008 (Inception) to  December 31, 2009 an expense of
$13,800 based on this agreement and the agreement was not renewed.
 
 On
September 1, 2009, the Company entered into a consulting agreement with a
consultant to provide maintenance services from September 1, 2009 to
February 28, 2010 at a rate of approximately $5,000 per month.  As of
December 31, 2009, the Company has recorded a liability of approximately $5,700
and an expense of approximately $20,000 based on this agreement.
 
 During
October 2009, the Company entered into agreements with its two members of the
Board of Directors to pay directors fees of $60,000 per year beginning the first
period after the Company receives $2,000,000 in funding.  As of
December 31, 2009, the Company has not received $2,000,000 in funding and no
fees have been paid.  In addition, the agreement calls for the payment
of additional directors fees of 1% per director based on the total capital up to
$50,000,000 each upon receiving the additional financing.
 
 NOTE
11 – RELATED PARTY TRANSACTIONS
 
 For the
period from April 18, 2008 (inception) to December 31, 2009, the Company had two
customers, one of which was, Visator, who individually accounted for 19% of
total revenues in the amount of $15,000 for the year ended December 31,
2009.  This customer was also a related party.  The
agreement with Visator expired on June 1, 2009 and was not renewed. (See Note
5).
 
 As of
December 31, 2009 and December 31, 2008, the Company has an accounts receivable
balance of $65,000 and $9,000, respectively. These amounts were owed by two
different customers, one of which, Visator is a related party (See Note
5).  As of December 31, 2009, the Company wrote off the $7,000
receivable balance from Visator as the balance was deemed uncollectible and the
relationship between the Company and Visator was terminated.
 
 Effective
May 1, 2008, the Company entered into a consulting agreement with Jesper Toft,
the Chairman of the Board of Directors, Chief Executive Officer and Chief
Financial Officer of the Company, to provide consulting services from May 2008
to August 2009 at a rate of $1,000 per month.  On September 1, 2009,
the Company amended the consulting agreement starting in September 2009 to a
rate of $12,000 per month.  As of December 31, 2009, the Company has
recorded a related party liability of $29,743 based on this agreement (See Note
10) and for the period from April 18, 2008 (Inception) to December 31, 2009,
expenses of $64,000.
 
 On June
30, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,000 to pay for incorporation filing fees of the
Company. The loan is due on demand, unsecured and bears no interest (See
Note 6).
 
 On July
24, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $1,789 to pay for the Company’s website and
design. The loan is due on demand, unsecured and bears no
interest  (See Note 6).
 
 On July
23, 2008, the Company received a loan from Jesper Toft, the Chairman of the
Board of Directors, Chief Executive Officer and Chief Financial Officer of the
Company, in the amount of $64 to pay for incorporation filing fees of the
Company. The loan is due on demand, unsecured and bears no
interest  (See Note 6).
 
  27
  NOTE 11 – RELATED
PARTY TRANSACTIONS CONTINUED
 
 On July
2, 2008, the Company executed a $35,000 promissory note to Toft ApS, a wholly
owned company of Jesper Toft, the Chairman of the Board of Directors, Chief
Executive Officer and Chief Financial Officer of the Company, in exchange for
$35,000 cash.  The note is due on demand, unsecured and bears no
interest (See Note 7).
 
 On August
18, 2008, the Company executed a promissory note to Toft ApS, a wholly owned
company of Jesper Toft, the Chairman of the Board of Directors, Chief Executive
Officer and Chief Financial Officer of the Company, in exchange for $10,000 for
funding the Company’s operating expenses.  The note is due on demand,
unsecured and bears no interest (See Note 7).
  On June
8, 2009, the Company received a loan from Toft ApS, a wholly owned company of
Jesper Toft, the Chairman of the Board of Directors, Chief Executive Officer and
Chief Financial Officer of the Company, in the amount of $627 for funding the
Company’s tax expense.  The note is due on demand, unsecured and bears
no interest (See Note 6).
 
 During
the year ended December 31,  2009, the Company received a loan from
Toft ApS, a wholly owned company of Jesper Toft, the Chairman of the Board of
Directors, Chief Executive Officer and Chief Financial Officer of the Company,
in the amount of $1,153 for funding the Company’s operating
expenses.  The loan is due on demand, unsecured and bears no interest
(See Note 6).
 
 For the
twelve months ended December 31, 2009,  for the period April 18, 2008
(inception) to December 31, 2008, and for the period April 18, 2008 (inception)
to December 31, 2009, $2,701,  $1,269 and $3,970, respectively were
recorded as an in kind contribution of interest on related party notes (See
Notes 6 and 7).
 
 NOTE
12 – SUBSEQUENT EVENTS
 
 In
January 13, 2010, the Company received a loan of $1,072 from Jesper Toft for the
purpose of funding operating expenses.
 
 In
February 2010, the Company executed a note payable to IT Ventures Aps in
exchange for $45,525 for funding the Company’s operating
expenses.  The note is due on August 31, 2010 and bears monthly
interest of 2.5%.  The Company has the option to extend the note up to
four months, with an interest rate of 3% for each additional month.
 
 
 28
 
 
 
 
 Exhibits
 
 Exhibit
No.
 
 14.1
              Code
      of Ethics31.1
              Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer
 
 31.2
              Rule
      13a-14(a)/15d-14(a) Certification of the Principal Accounting
      Officer
 
 32.1
              Certification
      Pursuant to 18 U.S.C. §1350 of Chief Executive
  Officer
 
 32.2
              Certification
      Pursuant to 18 U.S.C. §1350 of the Principal Accounting
      Officer
 
 
 
 29
 
 SIGNATURES
 
 
 In
accordance with Section 13(a) or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 METHA
      ENERGY SOLUTIONS INC.Dated:
      March
      31, 2010
              By:
              /S/
      JESPER TOFTJesper
      Toft
                Chief
      Executive Officer,
                Chief
      Financial Officer,
                Chief
      Accounting Officer
 
 
 
  30