UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K


(Mark One)





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







For the fiscal year ended December 31, 2009




[  ]         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the transition period from ________________ to _______________





333-128077


(Commission file number)





MARINE GROWTH VENTURES, INC.


(Exact name of small business issuer as specified in its charter)




Delaware
20-0890800(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)





1818 N. Farwell Ave


Milwaukee, WI 53202


(Address of principal executive offices)





(414) 283-2620


(Issuer's telephone number)





Securities registered under Section 12(b) of the Exchange Act: None





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


Common Stock, par value $0.001 per share





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





Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (229,405 of this Chapter) contained in this form, and no disclosure will be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x ]






1





Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a small reporting company.  See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check One):





Large Accelerated Filer  [_]                                                                Accelerated Filer  [_]


Non-accelerated Filer     [_]                                                                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  [  ]   No   [X]





The Issuer's revenues for the year ending December 31, 2009 were $0.





State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: As of June 30, 2009, the aggregate market value of voting stock held by non-affiliates was $50,310, based on the closing prices as quoted on the OTC Bulletin Board under the symbol “MGRW”, of $.03.





State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of  March 26, 2010 – 21,839,500 shares of common stock.










2








MARINE GROWTH VENTURES, INC.


FORM 10-K


FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009


TABLE OF CONTENTS





PART I




Item 1.
Description of Business
4Item 2.
Description of Property
10Item 3.
Legal Proceedings
10Item 4.
[Reserved]
11PART IIItem 5.
Market for Common Equity and Related Stockholder Matters
12Item 6.
Selected Financial Data
12Item 7.
Management’s Discussion and Analysis or Plan of Operations
12Item 8.
Financial Statements
F-1Item 9.
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
16Item 9A.
Controls and Procedures
16Item 9B.
Other Information
17PART IIIItem 10.
Directors and Executive Officers of Marine Growth Ventures, Inc.
18Item 11.
Executive Compensation
21Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
22Item 13.
Certain Relationships and Related Transactions, and Director Independence
23Item 14.
Principal Accountant Fees and Services
23Item 15.
Exhibits
24SIGNATURES

27








3





PART I








Item 1.                                Description of Business





Forward-Looking Statements





The information in this report contains forward-looking statements.  All statements other than statements of historical fact made in report are forward looking.  In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements.  These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words.  No assurances can be given that the future results anticipated by the forward-looking statements will be achieved.  Forward-looking statements reflect management’s current expectations and are inherently uncertain.  Our actual results may differ significantly from management’s expectations.




Organizational History




We are a specialized holding company engaged in various marine industry operations. Our current primary operation, conducted through our wholly-owned subsidiary, Sophlex Ship Management, Inc., is providing ship crewing and management services to vessel owners and operators in the United States and abroad. In addition, through our other wholly-owned subsidiaries we are attempting to provide financing to businesses in the marine industry, ship crewing and management services to vessel owners and operators in the United States and abroad. Our website address is http://www.marinegrowthventures.com.




Overview of Business




We had no significant business operations, until our acquisition of Sophlex Ship Management, Inc. on September 1, 2004 in exchange for 1,000,000 shares of our common stock.  Sophlex Ship Management, Inc., which was founded in 1999, provides ship crewing and management services to vessel owners and operators in the United States and abroad.  Capt. Timothy Levensaler, our Chief Operating Officer, was the founder and the sole shareholder of Sophlex Ship Management, Inc. prior to its acquisition by us.





In addition, we are also pursuing other opportunities in the shipping industry.





Crewing and Management Services




Currently our primary business is to provide ship crewing and management services to vessel owners and operators in the United States and abroad. Although as of the date hereof we are not providing such services to any vessels, we have provided ship crewing and management services to eight different vessels since 1998.  These services are provided by our wholly-owned subsidiary Sophlex Ship Management, Inc., which is an International Safety Management Code certified company holding a Document of Compliance issued by the American Bureau of Shipping to operate vessels worldwide. This certification authorizes us to operate any ship anywhere in the world.  A DOC (Certificate of Compliance) is applied for and is held for each country in which the ship is under its Flag.




Our crewing services consist of supplying sea staff to our clients. To ensure the qualifications of the staff a prerequisite to hiring our crew is to check that each of the crew members has all the required regulatory training and certificates. Generally we provide crews for ships that we manage, but we also provide crews to vessels operated by other entities, for which we do not provide management services, upon request.  When providing crew services we generally charge a fee for each crew member provided. We usually obtain management customers who come to us either in the process of purchasing a ship or shopping for a ship.  We assist the customers in this process, which usually requires our inspection of the ship.  Once the purchase is made we can provide a crew to deliver the ship to the buyer’s location anywhere in the world.  Once the ship is delivered our goal is to try to be retained to provide continuing management services for the vessel.






4






In order to be able to provide crewmembers, we maintain relationships with employment agencies in the Philipines, Ukraine, Honduras and Mexico and currently have an agreement with an agency in China.  These agencies provide highly qualified and licensed marine crew at all skill levels, many of whom have experience in operating both United States and foreign flag vessels. We are therefore able to deploy qualified, responsible crew to our clients’ operations on an expedited basis.  These agencies are compensated for their services by either charging the crew member a fee that is paid up front or garnished from future wages, by charging us a monthly fee ranging from $25 to $50 per employee or by charging us an upfront fixed fee which ranges from $100 to $300 per employee contract.




In addition to the provision of crew services, we provide our clients with general management services including the following:





·
purchasing new vessels or second-hand vessels (we have assisted in the purchase of two vessels);


·
vessel maintenance ensuring compliance with all safety and environmental rules and procedures (we have assisted in ensuring compliance with all safety and environmental rules and procedures of four vessels);


·
shipyard supervision of new vessels and conversion projects (we have assisted in three conversion projects);


·
assist in devising and obtaining optimal insurance coverage and management of insurance related matters (we have assisted in two insurance programs); and


·
assist in arranging for client’s financing needs (assisted in one financing package).





These functions are supported by onboard and onshore systems for maintenance, inventory, purchasing and budget management.





In providing management services, we normally enter into agreements to provide complete vessel management services for a period of two to three years.  However, depending upon the specific needs of the client we may enter into short-term agreements to provide specific management services, which to date we have not done.  For example, we have or could assist a client for the specific purpose of purchasing a vessel, without providing any additional management services.





In connection with our management services, we often provides technical personnel for a wide range of inspection services, such as feasibility, pre-sale condition, pre-scrapping condition, estimate of work or shipyard package.  These services may lead to a contract for us to convert the ship and ultimately provide long-term management services for the ship. Generally these services requires us to identify a ship for the customers needs and determine the suitability of the vessel for proposed project and the pre-sale condition of the vessel.  The term “pre-sale condition” refers to the condition of the vessel before an offer or any negotiation is done with respect to a vessel, while “pre-scrapping condition” refers to the condition and general value the ship will have at the end of its usable life. To convert a ship means to change the ships useful purpose from it intended original purpose. For example, a ferry designed to transport cars and trucks can be converted into a casino ship by putting a casino into the former car deck area. This form of conversion requires ship management expertise to ensure that the converted vessel obtains all proper certifications, which allow it to operate safely and legally.





In addition, we have a record of available ships and an ability to locate additional ships.  Therefore, when potential customers contact us seeking a vessel, after ascertaining the type of vessel being sought we are able to assist the customer in obtaining a vessel that suits their needs by identifying and inspecting an appropriate vessel.   We will use these contacts as leads so we can provide conversion management and financing services.  Conversion management means we will (1) suggest initial design changes to make a ship suitable for its proposed use, (2) prepare a specification for ship yard conversion, (3) mange the specification during ship yard conversion, and (4) deliver the final vessel to the customer.








5







We also provide "Custodial Services."  When a ship is confiscated for any number of reasons, we work with local maritime lawyers to obtain a contract to "hold" the ship for the Federal Court.  This refers to a Federal “custodian” service.  When a ship gets “arrested” for any reason (most commonly it is non payment of bills for goods and services) the vendor or a group of vendors can apply to the Federal Court to “arrest the vessel.”  With this application they must propose a custodian for the vessel.  The custodian takes possession of the vessel and preserves and protects it for the Federal Marshall until the court proceeding is completed.  This can take anywhere from days to years.  These contracts generally last from a few hours to one to two years depending on the case.  Since daily rates charged for Custodial Services are senior to all other creditors liens we are generally assured of payment.





Competition





Our crew and management services compete both with existing and established service providers. Many of these companies have longer operating histories, larger customer bases and significantly greater financial, marketing and other resources than we do and may have the ability to better attract and retain the same customers that we target. Once service providers have established these business relationships, it could be extremely difficult to convince them to utilize our crew and management services or replace or limit their existing business practices.  We cannot be certain that we will be able to compete successfully against current and future competitors, and competitive pressures faced by us could materially adversely affect our business.





Cruise timeshares and vessel condos





The Company was pursuing opportunities in a new industry referred to as cruise timeshares, which combines traditional real estate timeshares with commercial cruise vacations.  Purchasers of cruise timeshares could receive the right to a seven-day cruise each year for up to 15 years aboard a cruise ship purchased by the Company.  The Company had purchased a vessel for this purpose and finished a number of improvements on the vessel in order to sell these timeshares.    The Company also began working with a maritime lodging company in order to sell condos on the vessel that will take weekend tours of the surrounding Pacific coastline.  Purchasers would be able to live aboard full-time, cruise only on weekends, rent out their condos as investment income, or any combination which suits their individual purposes.  The Company was in litigation with Greystone regarding this vessel and settled accordingly in November of 2009 allowing Greystone to take possession of the vessel.  The Company believes that the cruise timeshares or condo sales is a viable opportunity and may go back to it in the future.





Government Regulation





Federal Regulation





We do not believe that we are currently subject to U.S. federal regulation in connection with our current operations; however, to the extent that we operate vessels in United States territorial waters our vessels will be subject to regulation by the United States Coast Guard. These regulations primarily relate to passenger safety.  Sophlex has extensive experience and expertise in adhering to these regulations.





Risks Related to Our Business





We Have A History Of Operating Losses And Accumulated Deficit.  There Is No Certainty That We Will Ever Achieve Profitability.





We have incurred operating losses of $3,000,765 since inception. We expect to incur significant increases in operating losses over the next several years, primarily due to the expansion of our operations.  The negative cash flow from operations is expected to continue and to accelerate in the foreseeable future.  Our ability to achieve profitability depends upon our ability to develop our cruise vessel timeshare operations.  There can be no assurance that we will ever achieve any revenues or profitable operations from the sale of our timeshare products.






6






We Have Substantial Doubt About Our Ability To Continue As A Going Concern.






As we note in our consolidated balance sheets as of December 31, 2009 and 2008 as well as our related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009, we have experienced, and expect to continue to experience, recurring net losses, negative cash flows from operations, limited amount of funds on our balance sheet.  Accordingly, we have substantial doubt about our ability to continue as a going concern.  We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue in existence.  See also, Item 3 of Part I.




We May Be Unable To Manage Our Growth Or Implement Our Expansion Strategy.





If management is unable to adapt to the growth of our business operations, we may not be able to expand our product and service offerings, our client base and markets, or implement the other features of our business strategy at the rate or to the extent presently planned.  Our projected growth will place a significant strain on our administrative, operational and financial resources. If we are unable to successfully manage our future growth, establish and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel or effectively manage unexpected expansion difficulties, our financial condition and results of operations could be materially and adversely affected.





The Vessel Management Services Industry Is Highly Competitive And We May Be Unable To Compete Effectively.





The vessel management industry, including crewing and maintenance services, is highly competitive, rapidly evolving, and subject to technological change and intense marketing by providers with similar products and services. Many of our current competitors are significantly larger and have substantially greater market presence as well as greater financial, technical, operational, marketing and other resources and experience than we have. In the event that such a competitor expends significant sales and marketing resources in one or several markets we may not be able to compete successfully in such markets.  We believe that competition will continue to increase, placing downward pressure on prices.  Such pressure could adversely affect our gross margins if we are not able to reduce costs commensurate with such price reductions.  In addition, the pace of technological change makes it impossible for us to predict whether we will face new competitors using different technologies to provide the same or similar services offered or proposed to be offered by us.  If our competitors were to provide better and more cost effective services, our business initiatives could be materially and adversely affected.





We Are Dependent Upon Key Personnel And Consultants And The Loss Of Any Key Member Of This Team Could Have A Material Adverse Effect On Our Business.





Our success is heavily dependent on the continued active participation of our current executive officers listed under “Management.” Loss of the services of one or more of these officers could have a material adverse effect upon our business, financial condition or results of operations. Further, our success and achievement of our growth plans depend on our ability to recruit, hire, train and retain other highly qualified technical and managerial personnel.  Competition for qualified employees among companies in the communications industry is intense, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of our activities, could have a materially adverse effect on us. Our inability to attract and retain the necessary personnel and consultants and advisors could have a material adverse effect on our business, financial condition or results of operations.








7








Risks Related To Our Stock





If We Fail To Maintain Effective Internal Controls Over Financial Reporting, The Price Of Our Common Stock May Be Adversely Effected.





Our management team has no previous experience in managing a public company. Accordingly, our internal controls over financial reporting, while they appear to be sufficient for our needs, may have weaknesses and conditions that will need to be addressed, the disclosure of which may have an adverse impact on the price of our common stock. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or operating results. In addition, management's assessment of our internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal controls over financial reporting or disclosure of management's assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.





We Have A Limited Operating History Upon Which An Evaluation Of Our Prospects Can Be Made.  For That Reason, It Would Be Difficult For A Potential Investor To Judge Our Prospects For Success.





We had no significant business operations until our acquisition of Sophlex Ship Management, Inc. on September 1, 2004.  In light of the fact that there are no other business models that management can look to in the formation and operation of a cruise timeshare business operation, there can be no assurance that our proposed operations will be implemented successfully or that we will ever have profits.  If we are unable to sustain our operations, you may lose your entire investment.  We face all the risks inherent in a new business, which include the expenses, difficulties, complications and delays frequently encountered in connection with conducting operations, including capital requirements and management's potential underestimation of initial and ongoing costs.  As a new business, we may encounter delays and other problems in connection with the operations that we implement.  We also face the risk that we will not be able to effectively implement our business plan. In evaluating our business and prospects, these difficulties should be considered. If we are not effective in addressing these risks, we will not operate profitably and we may not have adequate working capital to meet our obligations as they become due.  This may cause our stock price to decline and result in a loss of a portion or all of your investment.





We Will Need To Raise Additional Equity Or Debt Financing In The Future.







We will need to raise financing in the future to fund our operations. If successful in raising additional financing, we may not be able to do so on terms that are not excessively dilutive to our existing stockholders or less costly than existing sources of financing. Failure to secure additional financing in a timely manner and on favorable terms if and when needed in the future could have a material adverse affect on our financial performance, balance sheet and stock price and require us to implement cost reduction initiatives and curtail or cease operations.  This may cause our stock price to decline and result in a loss of a portion or all of your investment.





Our common stock has experienced in the past, and is expected to experience in the future, significant price and volume volatility, which substantially increases the risk that you may not be able to sell your shares at or above the price that you pay for the shares.





Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to, the following:




·
variations in our quarterly operating results;·
our ability to successfully market and sell cruise vessel timeshares;·
changes in market valuations of similar companies;·
announcement by us or our competitors of significant contracts, acquisitions, strategic

partnerships, joint ventures or capital commitments;·
additions or departures of key personnel; and·
Fluctuations in stock market price and volume.






8






Additionally, in recent years the stock market in general, and the Over-the-Counter Bulletin Board and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price regardless of our operating performance. The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this prospectus is not necessarily an indicator of what the trading price of our common stock might be in the future. In the past, class action litigation has often been brought against companies following periods of volatility in the market price of those companies’ common stock. If we become involved in this type of litigation in the future it could result in substantial costs and diversion of management attention and resources, which could have a further negative affect on your investment in our stock.




Our issuance of common stock at a price below prevailing trading prices at the time of issuance may cause our stock price to decline.





Currently outstanding options, convertible notes and warrants, as well as other convertible securities that we may issue in the future, may result in shares being issued for consideration that is less than the trading price of our common stock at the time the shares are issued. We may also issue shares in the future at a discount to the trading price of our common stock. Any such below market issuances, or the potential for such issuances, could cause our stock price to decline.





Shares of our common stock may be subject to price illiquidity and volatility because our shares may continue to be thinly traded and may never become eligible for trading on Nasdaq or a national securities exchange.







Although a trading market for our common stock exists, the trading volume has not been significant and an active trading market for our common stock may never develop. There currently is no analyst coverage of our business. As of January 26, 2010, 21,839,500 common shares were issued and outstanding.  Furthermore, the average three month trading volume for our common shares has been approximately 13,875 (or approximately less than 1.0% of the total outstanding. The trading volume of our shares will continue to be limited due to resale restrictions under applicable securities laws and the fact that approximately 92.78% of our outstanding shares are held by our officers and directors. As a result of the limited trading market for our common stock and the lack of analyst coverage, the market price for our shares may continue to fluctuate significantly and will likely be more volatile than the stock market as a whole. There may be a limited demand for shares of our common stock due to the reluctance or inability of certain investors to buy stocks quoted for trading on the OTC Bulletin Board, lack of analyst coverage of our common stock and limited trading market for our common stock. As a result, even if prices appear favorable, there may not be sufficient demand to complete a stockholder’s sell order. Without an active public trading market or broader public ownership, shares of our common stock are likely to be less liquid than the stock of public companies with broad public ownership and an active trading market, and any of our stockholders who attempt to sell their shares in any significant volumes may not be able to do so at all, or without depressing the publicly quoted bid prices for our shares.




While we may, at some point, be able to meet the requirements necessary for our common stock to be listed on the Nasdaq stock market or on another national securities exchange, we cannot assure you that we will ever achieve such a listing. Listing on one of the Nasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading price and minimum public “float” requirements. There are also continuing eligibility requirements for companies listed on national securities exchanges. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may limit your ability to sell your shares, which could result in you losing some or all of your investment.




The so-called “penny stock rule” makes it cumbersome for brokers and dealers to trade in our common stock, making the market for our common stock less liquid which could cause the price of our stock to decline.






9









Trading of our common stock on the OTC Bulletin Board is subject to certain provisions of the Securities Exchange Act of 1934, commonly referred to as the “penny stock” rule. A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Because our common stock has historically traded below $5.00 per share, it is deemed to be a penny stock, and consequently trading in our stock is subject to additional sales practice requirements on broker-dealers.




These require a broker-dealer to:




·
make a special suitability determination for purchasers of our shares;·
receive the purchaser’s written consent to the transaction prior to the purchase; and·
deliver to a prospective purchaser of our stock, prior to the first transaction, a risk disclosure

document relating to the penny stock market.




Consequently, the penny stock rules restrict the ability of broker-dealers to trade and/or maintain a market in our common stock. Also, prospective investors may not want to get involved with the additional administrative requirements which may have a material adverse effect on the trading of our shares.







We Are Controlled By Current Officers, Directors And Principal Stockholders.





Following completion of the Offering, our directors, executive officers and principal stockholders and their affiliates will beneficially own approximately 92.75% of the outstanding shares of our common stock.  So long as our directors, executive officers and principal stockholders and their affiliates controls a majority of our fully diluted equity, they will continue to have the ability to elect our directors and determine the outcome of votes by our stockholders on corporate matters, including mergers, sales of all or substantially all of our assets, charter amendments and other matters requiring stockholder approval. This controlling interest may have a negative impact on the market price of our common stock by discouraging third-party investors.





The Settlement of Litigation has resulted in the Loss of Our Primary Operating Asset.





As we note in our financial statements for the year ended December 31, 2009, and in Item 3 of Part I,Greystone Business Credit II, LLC commenced an admiralty action against Marine Growth Canada, Ltd., Marine Growth Finance & Charter, Inc., Marine Growth Ventures, Inc., Fractional Marine, Inc., and all other interested in the ship “Pacific Aurora” in the Federal Court in Vancouver, BC Canada seeking to foreclose its lien and take ownership and possession of the ship.   Management settled this suit with Greystone in November of 2009.   Greystone will pursue ownership and possession of the vessel with no challenge from management in exchange for a general release of all outstanding claims. Accordingly, at December 31, 2009, our assets of $24,160 substantially consisted of cash and retainer.





Item 2.                                 Description of Property





We lease our main office which is located at 1818 N. Farwell Ave., Milwaukee, WI 53202. The lease is month-to-month which began on March 1, 2010. We currently pay rent of $1,000 per month.





We are not dependent on a specific location for the operation of our business.





Item 3.                                 Legal Proceedings





During the fourth quarter of 2008, a case was filed by Euro Oceans, Co.  against Marine Growth Ventures, Inc., Marine Growth Canada, LTD, Sophlex Ship Management, Inc and Ship Timeshare Management, Inc. for breach of contract.  This case is currently pending and the parties are in settlement discussions.




10


During the first quarter of 2009, a case was filed by Greystone Business Credit II, LLC against Marine Growth Canada, Ltd., Marine Growth Finance & Charter, Inc., Marine Growth Ventures, Inc., Fractional Marine, Inc., and all other interested in the ship “Pacific Aurora” in the Federal Court in Vancouver, BC Canada for admiralty action seeking to foreclose its lien and take ownership and possession of the ship.  The Company completed a settlement with Greystone in November, 2009 in which Greystone will pursue ownership and possession of the vessel with no challenge from management in exchange for a general release of all outstanding claims.




Item 4.                                 [Reserved]











11








PART II





Item 5.                                Market for Common Equity and Related Stockholder Matters





Our common stock has been trading publicly on the OTC Bulletin Board under the symbol "MGRW" since July, 2007. The table below sets forth the range of quarterly high and low closing sales prices for our common  stock on the OTC Bulletin Board during the calendar quarters indicated. The quotations reflect inter-dealer prices, without retail mark-ups, markdowns, or conversion, and may not represent actual transactions.





COMMON STOCK




2008First Quarter


0.89



0.35Second Quarter


0.79



0.26Third Quarter


0.60



0.20Fourth Quarter


0.34



0.102009First Quarter


0.10



0.03Second Quarter


0.03



0.03Third Quarter


0.07



0.03Fourth Quarter


0.51



0.05


The transfer agent for our common stock is:


Interwest Transfer


1981 East 4800 South, Suite 100


Salt Lake City, UT 84117





As of January 26, 2010, we had 68 registered owners of our common stock and approximately 6 beneficial owners of our common stock.





Dividend Policy





Our payment of dividends, if any, in the future rests within the discretion of the Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors.  We have not paid any dividends since our inception and do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.  There are no provisions in our articles of incorporation or bylaws that restrict us from declaring dividends. However, agreements we may enter into in connection with debt financing in the future may restrict our ability to declare dividends, without lenders consent.




Equity Compensation Plan Information




None





Item 6 – Selected Financial Data





None





Item 7 - Management’s Discussion and Analysis








12





Forward-Looking Statements





This Quarterly Report of Form 10-K, including this discussion and analysis by management, contains or incorporates forward-looking statements.   All statements other than statements of historical fact made in report are forward looking.  In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements.  These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words.  No assurances can be given that the future results anticipated by the forward-looking statements will be achieved.  Forward-looking statements reflect management’s current expectations and are inherently uncertain.  Our actual results may differ significantly from management’s expectations.





The following discussion and analysis should be read in conjunction with our financial statements, included herewith.  This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.  Such discussion represents only the best present assessment of our management.





Background





We were formed and incorporated in the state of Delaware on November 6, 2003.  We are a holding company and conduct our current operations solely through a wholly-owned subsidiary, Sophlex Ship Management, Inc. (“Sophlex”).





We had no significant business operations until our acquisition of Sophlex on September 1, 2004.  Sophlex, which was founded in 1999, and provides ship crewing and management services to vessel owners and operators in the United States and abroad.  Our Chief Operating Officer was the founder and the sole shareholder of Sophlex prior to the acquisition.





In addition, the Company is pursuing other opportunities in the shipping industry.





Results of Operations





Since our inception, we have been dependent upon the proceeds of loans from our stockholders and the receipt of capital investment to fund our continuing activities.  We have incurred operating losses since our inception.  We expect to incur significant increasing operating losses over the next several years, primarily due to the expansion of our business. We will continue to require the infusion of capital until operations become profitable.  We had a net income of $2,148,856 and a negative cash flow from operations of $157,559 for the twelve months ended December 31, 2009.





Twelve Months Ended December 31, 2009 and 2008:





Revenue:   Revenue was $0 for the twelve months ended December 31, 2009 compared to $12,000 earned in the twelve months ended December 31, 2008.    The reduction in revenue was due to the decrease in leasing, and income incurred from custodial services.    The $12,000 of revenue in 2008 was from leasing, the Company subsequently recorded an allowance for the receivable in the amount of $12,000.





Payroll and Related Expenses:  Payroll and related expenses were $40,583 for the twelve months ended December 31, 2009 compared to $180,807 for the twelve months ended December 31, 2008, representing a decrease of $140,224.  The decrease in payroll was due to the officers waiving their payroll as of March 1, 2008 and the president waiving his payroll as of December 31, 2008, and will continue to do so until the Company has sustainable revenues.





Professional Fees:  Professional fees were $171,690 for the twelve months ended December 31, 2009 compared to $245,961 for the twelve months ended December 31, 2008.   Professional fees decreased by $74,271 in the twelve months ended December 31, 2008.   The change in professionals is primarily due to a decrease in accounting fees of $15,480 a decrease in consulting fees of $28,460, a decrease in legal fees of $24,919 and a decrease in other profession $5,412.






13






General and Administrative Expenses:  General and administrative expenses were $34,122 and $118,927 for the twelve months ended December 31, 2009 and 2008, respectively.  General and administrative expenses decreased by $84,805 in the twelve months ended December 31, 2009 as compared to the twelve months ended December 31, 2008.  This decrease is due to a decrease in travel of $39,456, a decrease in insurance of $18,303, a decrease in rent of $7,668, a decrease in processing fees of $7,979, and a decrease in utilities of $9,699.





Selling Expenses:   Selling expenses were $0 and $64,257 for the twelve months ended December 31, 2009 and 2008, respectively.    The large decrease in selling expenses in the twelve months 2009 were due to the change in the focus of the vessels.





Impairment of Vessel:  Impairment of vessel expenses including costs for disposal were $0 and $864,926 for the twelve months ended December 31, 2009 and 2008, respectively.   $300,000 was for the approximately cost of disposal for the Babe.   The remaining $564,926 was for the impairment of the fair market value of the Babe.





Operating Expenses:  Operating expenses were $65,861 for the twelve months ended December 31, 2009 compared to $272,488 for the twelve months ended December 31, 2008.   The decrease of $206,627 was primarily due the decrease in crew related expenses of $65,739, a decrease in parts and supplies of $36,177 for the Pacific Aurora., a decrease in inspection and navigation fees of $58,908, a decrease in dockage of $4,323, a decrease in vessel insurance $43,455 and a decrease in other operating expenses of $952.





Other Income (Expenses):  Other Income (Expenses) were $2,461,113 and ($462,516) for the twelve months ended December 31, 2009 and 2008, respectively.   Other Income (expenses) increased by $2,923,629 for the twelve months ended December 31, 2009.  This increase was primarily due to the settlement agreement with Greystone which released the vessels the Babe  and the Pacific Aurora to Greystone.  The Company recorded an extinguishment gain of $2,638,809.





Net Income / (Loss):  Net Income / (loss) before income taxes was $2,148,856 and ($2,317,186) for the twelve months ended December 31, 2009 and 2008, respectively. The increase in net income is attributed to settlement agreement with Greystone.





Inflation





Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.





Climate Change





Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.





Liquidity and Capital Resources





For the twelve months ended December 31, 2009, we had a negative cash flow from operations of $157,559 compared to a negative cash flow of $806,235 as of December 31, 2008, an decrease in the negative cash flow of $648,676. Since inception, we have been dependent upon proceeds of loans from our stockholders and receipt of capital investment to fund our continuing activities.





On January 5, 2006 the Company entered into a Revolving Note (“Note A”) with an aggregate principal amount of $50,000 to Frank Crivello. Funds are advanced to us as needed to pay for ongoing operations. Note A had a maturity date of June 30, 2006. As a result of thirteen amendments to Note A, the principal amount of Note A was increased to $800,000 and the maturity date of Note A was extended to December 31, 2011. Note A has an interest rate of 10%.   As of December 31, 2009, the balance on this loan is $126,381 ($59,500 in principal and $66,881 in interest).






14





On August 1, 2007, the Company issued a revolving note (“Note B”), with an aggregate principal amount of $100,000 to an entity that is controlled by the Chairman of the Board of Directors.   Funds are advanced to the Company, as needed, to finance ongoing operations.  Note B had a maturity date of July 31, 2008.  It has been agreed that the maturity date will extend to December 31, 2008 unless the lender notifies the borrower, in writing, thirty days prior to the maturity date.  Note B bears an interest rate of 10%.   As a result of eight amendments to Note B, the principal amount of Note B was increased to $850,000 and the maturity date was extended to December 31, 2008. During the twelve months ended December 31, 2011, the Company received $161,550 on this loan. As of December 31, 2009, the balance on this loan is $947,852 ($810,163 in principal and $137,669 in interest).





On August 5, 2009, the Company finalized an agreement with Greystone Maritime Holdings, LLC, Greystone Business Credit II, L.L.C., and GBC Funding, LLC (collectively, “Greystone”) in connection with the debt of the Company owed to Greystone and secured by the vessel the “Babe” and Greystone’s purported sale of the vessel in April 2009 (the “Settlement”).  Pursuant to the Settlement, in consideration for the payment of $23,025 by Greystone to certain officers who performed work related to the Babe, the Company released Greystone from all claims of the Company, and liabilities to the Company, in connection with the purported sale of the vessel and agreed not to challenge the sale or the receipt by Greystone of proceeds in connection with the sale. In connection with the settlement agreement, the company wrote off the carrying amount of the vessel in the amount of $1,425,000, in exchange for release of notes payable, accrued interest and other fees in the amount of $2,776,171 and accordingly the company recorded an extinguishment gain of $1,351,171.





On or about November 30, 2009, the Company, together with certain affiliated entities, collectively, the “Marine Borrowers”), David Marks (“Marks”) and Frank Crivello (“Crivello”) and other parties, entered into a Settlement Agreement with Greystone Business Credit II, L.L.C. (“GBC II”), GBC Funding, LLC (“GBC Funding”) and Greystone Maritime Holdings, LLC  (“Greystone Maritime” and together with GBC II and GBC Funding, collectively, “Greystone Parties”). The Settlement Agreement, among other things, settles (x) certain litigation, including:





i.
an Admiralty Action by GBC II against Marine Growth Finance and Charter (“MGFC”), Marine Growth Ventures, Fractional Marine and Marine Ventures in the Federal Court of Canada known as Greystone Business Credit II, LLC v. Marine Growth Canada, Ltd., et al, Court No. T-340-09 (the “Admiralty Litigation”); andii.
a Bankruptcy Order by GBC II against Marine Growth in the Supreme Court of British Columbia, Canada known as In the Matter of the Bankruptcy of Marine Growth Canada, Ltd., Court No. B09-1130 (the “Canadian Bankruptcy Litigation”),





and (y) a loan transaction between MGFC, as borrower, and GBC II, as lender.





Pursuant to the Settlement Agreement, Greystone Parties agreed to return and/or terminate any and all stock pledges and certificates pertaining to MGFC and to terminate the guaranty executed by MGFC in favor of GBC II.  It also was agreed that, with respect to the vessel known as the Pacific Aurora (the “Aurora”), which is registered in British Columbia, Canada and is currently docked in Vancouver, the Crivello Parties (being Marks, Crivello, the Marine Borrowers and other affiliated parties named in the Settlement Agreement) would forever be barred from asserting any claim to the Aurora or challenging any rights of the Greystone Parties to the Aurora, and would reasonably cooperate with GBC II in any manner required in the Admiralty Litigation or the Canadian Bankruptcy Litigation to effect GBC II’s possessions of and title to the Aurora.  Pursuant to the Settlement Agreement, the Crivello Parties, including the Marine Borrowers, and the Greystone Parties, will exchange general releases of outstanding claims, except that Crivello and Marks personally guaranteed performance by the Crivello Parties of their obligations under the Settlement Agreement.  In connection with the settlement agreement, the Company wrote off the carrying amount of the vessel and it’s furnishings in the amount of  $1,498,670, in exchange for release of notes payable, accrued interest and other ship related expenses in the amount of $2,831,308 and accordingly the company recorded a gain on release of assets of  $1,332,638.








15





We currently do not have sufficient cash reserves to meet all of our anticipated obligations for the next twelve months and there can be no assurance that we will ultimately close on the necessary financing. In addition to any third-party financing we may obtain, we currently expect that loans from our stockholders may be a continuing source of liquidity to fund our operations, however, it is not a guarantee.   Accordingly, we will need to seek funding in the near future.





Our ability to continue as a going concern is dependent on our ability to obtain additional funds through debt and equity funding as well as from sales of various services.





Off-Balance Sheet Arrangements





The Company does not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.





Critical Accounting Policies





Going Concern:





Our ability to continue as a going concern is dependent on our ability to obtain additional funds through debt and equity funding as well as from sales of various services.As we note in our consolidated balance sheets as of December 31, 2009 and December 31, 2008 as well as our related consolidated statements of operations, and cash flows for the year ended December 31, 2009, we have experienced, and expect to continue to experience, recurring net losses, negative cash flows from operations, limited amount of funds on our balance sheet.  Accordingly, we have substantial doubt about our ability to continue as a going concern.  We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.  The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue in existence.








Item 8.                                Financial Statements





The consolidated financial statements of Marine Growth Ventures, Inc. and subsidiaries, including the notes thereto, together with the report thereon of Demetrius & Company, is presented beginning at page F-1.








Item 9.                                Changes In and Disagreements with Accountants on Accounting Procedures and Financial Disclosures





None





Item 9A.                      Controls and Procedures.





Managements Report on Internal Control over Financial Reporting.





The Company’s  management are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). The Company’s  internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:






16





- pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;





- provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and





- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, the Company assessed the effectiveness of the internal control over financial reporting as of December 31, 2009. In making this assessment, we used the criteria set forth in Internal Control-Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of this assessment and on those criteria, the Company concluded that the material weakness that existed in the internal controls as of December 31, 2008 continued to exist at December 31, 2009 as follows:





A material weakness in the Company’s internal controls exists in that there is limited segregation of duties amongst the Company’s employees with respect to the Company’s preparation and review of the Company’s financial statements.





A material weakness in the Company’s internal controls exists in that there is an insufficient number of personnel with an appropriate level of experience and knowledge of the U.S. GAAP and SEC reporting requirements.  This material weakness may affect management’s ability to effectively review and analyze elements of the financial statement closing process and prepare financial statements in accordance with U.S. GAAP





As result of the amended financials for the period ended June 30, 2009, management identified a weakness in its review process of disclosures of subsequent events. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





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





Changes in internal control





There were no changes in the small business issuer’s internal control over financial reporting identified in connection with the company evaluation required by paragraph (3) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the small business issuer’s fiscal year that has materially affected or is reasonably likely to materially affect the small business issuer’s internal control over financial reporting




Item 9B.    Other Information






17







Changes in Control of Registrant


None





Change of Management





None





Entry into a Material Definitive Agreement





On or about November 30, 2009, Marine Growth Ventures, Inc. (the “Ventures”), together with certain affiliated entities, Marine Growth Finance & Charter, Inc. (“MGFC”), Marine Growth Canada Ltd. (“Marine Growth”) and Fractional Marine, Inc. (“Fractional Marine”, and together with Ventures, MGFC and Marine Growth, collectively, the “Marine Borrowers”), David Marks (“Marks”) and Frank Crivello (“Crivello”) and other parties, entered into a Settlement Agreement with Greystone Business Credit II, L.L.C. (“GBC II”), GBC Funding, LLC (“GBC Funding”) and Greystone Maritime Holdings, LLC  (“Greystone Maritime” and together with GBC II and GBC Funding, collectively, “Greystone Parties”). The Settlement Agreement, among other things, settles (x) certain litigation, including:





i.
an Admiralty Action by GBC II against MGFC, Marine Growth, Fractional Marine and Marine Ventures in the Federal Court of Canada known as Greystone Business Credit II, LLC v. Marine Growth Canada, Ltd., et al, Court No. T-340-09 (the “Admiralty Litigation”); andii.
a Bankruptcy Order by GBC II against Marine Growth in the Supreme Court of British Columbia, Canada known as In the Matter of the Bankruptcy of Marine Growth Canada, Ltd., Court No. B09-1130 (the “Canadian Bankruptcy Litigation”),





and (y) a loan transaction between MGFC, as borrower, and GBC II, as lender.





Pursuant to the Settlement Agreement, Greystone Parties agreed to return and/or terminate any and all stock pledges and certificates pertaining to MGFC and to terminate the guaranty executed by MGFC in favor of GBC II.  It also was agreed that, with respect to the vessel known as the Pacific Aurora (the “Aurora”), which is registered in British Columbia, Canada and is currently docked in Vancouver, the Crivello Parties (being Marks, Crivello, the Marine Borrowers and other affiliated parties named in the Settlement Agreement) would forever be barred from asserting any claim to the Aurora or challenging any rights of the Greystone Parties to the Aurora, and would reasonably cooperate with GBC II in any manner required in the Admiralty Litigation or the Canadian Bankruptcy Litigation to effect GBC II’s possessions of and title to the Aurora.  Pursuant to the Settlement Agreement, the Crivello Parties, including the Marine Borrowers, and the Greystone Parties, will exchange general releases of outstanding claims, except that Crivello and Marks personally guaranteed performance by the Crivello Parties of their obligations under the Settlement Agreement.







18







PART III





Item 10.                                Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act




MANAGEMENT




DIRECTORS AND EXECUTIVE OFFICERS





Our executive officers and directors and their respective ages and positions as of December 31, 2009 are as follows:




Name

Age

PositionDavid Marks

42

Chairman of the BoardCraig Hodgkins

48

President and DirectorCapt. Timothy Levensaler

51

Chief Operating Officer and DirectorKatherine Ostruszka

39

Chief Financial Officer and ControllerPaul Schwabe

52

Secretary and Director





Executive Biographies





David Marks,Chairman of the Board - Mr. Marks has served as our Chairman since October 2004.    Mr. Marks has served as Chairman and member of the board of Titan Global Holdings, Inc., a high-growth diversified holding company with a dynamic portfolio of companies engaged in emerging telecommunications markets and advanced technologies, since August 2002.  Mr. Marks was the former Chairman of Thomas Equipment, Inc., a company engaged in the manufacture and distribution of compact equipment and a distributor of pneumatic and hydraulic components, from November 2004 to November 2006.   Mr. Marks is the Managing Member of Farwell Equity Partners, LLC and Farwell Equity Partners II, LLC, investors in high growth small cap companies.   David Marks serves as the Trustee of the Irrevocable Children's Trust, Irrevocable Children's Trust No.2, Phoenix Business Trust and as principal officer of their respective subsidiary investments, positions he has held since 1994, where he oversees all trust investments, with responsibilities that begin pre-acquisition and extend through ownership and disposition. Investments include real estate, natural resources, marine and casino gaming, telecommunications and technology.  David Marks has a B.S. in economics from the University of Wisconsin.





Craig Hodgkins,President - Mr. Hodgkins has been our President since July 2004.  From June 2002 until July 2004 Mr. Hodgkins was an executive vice president and technical manager for Sophlex Ship Management, Inc., responsible for all technical and engineering programs and maintenance systems for various ships worldwide.  From June 1999 until March 2002 Mr. Hodgkins was president and general manager of the Sahara Hotel and Casino in Las Vegas, Nevada, responsible for all aspects of entire operation including casino operations, hotel, food and beverage, engineering, marketing and human resources.  Mr. Hodgkins received a B.S. in Marine Engineering and a minor in Business from Maine Maritime Academy, Castine, ME in 1983.





Capt. Timothy Levensaler,Chief Operating Officer - Capt. Levensaler has been our Chief Operating Officer since September 2004.  From January 2000 until September 2004 he was the president of Sophlex Ship Management, Inc., a Company which he founded to provide ship crew and management services.  Capt. Levensaler has numerous licenses and certificates and received a B.S. in Nautical Science/Marine Transportation from the Maine Maritime Academy, Castine, ME in 1983. In addition Capt. Levensaler holds a valid USCG unlimited Masters License, which qualifies him to be a Captain.





Katherine Ostruszka, Chief Financial Officer – Ms. Ostruszka was our controller since September 2004 and has been our Chief Financial Officer since July 2005. Ms. Ostruszka has over fourteen years of experience in financial analysis particularly in the areas of real estate, gaming, telecommunications and technology while working for Phoenix Investors, LLC and its family of companies. In addition, Ms. Ostruszka is also currently and has been the controller for Phoenix Investors, LLC since 2004. From 1997 until 2004 Ms. Ostruszka was employed by the Waukesha County Technical College. Ms. Ostruszka also holds a position as an economics instructor at Waukesha County Technical College, Wisconsin. Ms. Ostruszka received a BA in Economics and International Affairs from Marquette University and a MS in Management from the University of Wisconsin – Milwaukee.








19






Paul Schwabe,Secretary - Mr. Schwabe has been our Secretary since April 2004.  Since April 1994, Mr. Schwabe has served as vice president for Phoenix Investors, LLC. In that capacity he has also served as an officer for many subsidiaries of Irrevocable Children's Trust and Irrevocable Children's Trust No. 2 and their affiliates. Mr. Schwabe has extensive experience in the management of real estate and the administration of various businesses.




Board of Directors





Our Directors are elected by the vote of a majority in interest of the holders of our voting stock and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.





A majority of the authorized number of directors constitutes a quorum of the Board for the transaction of business.  The directors must be present at the meeting to constitute a quorum.  However, any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board individually or collectively consent in writing to the action.





Directors may receive compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board.  Each of our directors currently receives no compensation for their service on the Board of Directors.




Limitation on Liability and Indemnification of Directors and Officers




Our certificate of incorporation provides that no director or officer shall have any liability to the company if that person acted in good faith and with the same degree of care and skill as a prudent person in similar circumstances.




Our certificate of incorporation and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices or positions with us.  However, nothing in our certificate of incorporation or bylaws protects or indemnifies a director, officer, employee or agent against any liability to which that person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of that person’s office or position.  To the extent that a director has been successful in defense of any proceeding, the Delaware General Corporation Law provides that the director shall be indemnified against reasonable expenses incurred in connection with the proceeding.





Code of Ethics




We have not as yet adopted a code of ethics that applies to our directors, principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.  We plan to adopt a code of ethics in the near future, at which time, it will be available in print to any person who requests it and on our website, when our website is completed. Any amendments and waivers to the code will also be available in print and on our website.




20






Item 11.                                Executive compensation







The following table sets forth the annual and long-term compensation paid to our Chief Executive Officer and the other executive officers who earned more than $100,000 per year at the end of the last completed fiscal year.  We refer to all of these officers collectively as our "named executive officers."




Summary Compensation Table




Name & Principal Position

Year


Accrued Salary ($)


Bonus ($)


Stock Awards ($)


Option Awards ($)


Non-Equity Incentive Plan Compensation ($)


Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)


All Other Compensation ($)


Total ($)Craig Hodgkins President


2009 2008



0 100,000



0 0



0 0



0 0



0 0



0 0



0 0



0 100,000Timothy Levensaler Chief Operating Officer


2009 2008



0 16,666
*


0 0



0 0



0 0



0 0



0 0



0 0



0 16,666
*Katherine Ostruszka Chief Financial Officer


2009 2008



0 0



0 0



0 0



0 0



0 0



0 0



0 0



0 0* In June 2008, Levensaler exchanged $241,667 worth of accrued payroll in exchange for 100,000 shares of common stock. The Company reported $241,577 in additional paid in capital and $100 in common stock on the financials. The stock was valued based on the five day average trading value of the stock on the date of the exchange.





Employment Agreements with Executive Officers





None




Outstanding Equity Awards at Fiscal Year-End Table.




Option Awards
Stock AwardsName
Number

of

Securities

Underlying

Unexercised

Options

(#)

Exercisable
Number

of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable
Equity

Incentive

Plan

Awards:

Number

of

Securities Underlying

Unexercised

Unearned

Options

(#)
Option

Exercise

Price

($)
Option

Expiration

Date
Number

of Shares

or Units

of Stock

That Have

Not

Vested

(#)
Market

Value of

Shares or

Units of

Stock

That Have

Not

Vested

($)
Equity

Incentive

Plan Awards:

Number

of

Unearned

Shares,

Units or

Other Rights

That Have

Not

Vested

(#)
Equity Incentive

Plan Awards:

Market or Payout

Value

of

Unearned

Shares,

Units or

Other

Rights

That Have

Not

Vested

($)Not applicable at this time





As of December 31, 2009, the Company has no outstanding options, restricted stocks or similar awards.






21




Director Compensation




Name

(a)

Fees Earned or Paid in Cash

($)

(b)


Stock Awards

($)

(c)


Option

Awards ($)

(d)


Non-Equity Incentive Plan Compensation ($)

(e)


Change in Pension Value and Nonqualified Deferred Compensation Earnings

(f)


All Other Compensation

($)

(g)


Total

($)

(h)David M. Marks


0



0



0



0



0



0



0Craig Hodgkins


0



0



0



0



0



0



0Timothy Levensaler


0



0



0



0



0



0



0Paul Schwabe


0



0



0



0



0



0



0





Directors may receive compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board.  As of December 31, 2008, none of the Company’s directors currently receive any compensation for their service on the Board of Directors





Item 12.                                Security Ownership of Certain Beneficial Owners and Management





The following table sets forth certain information, as of December  31, 2009 with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.





Name of

Beneficial Owner (1)

Number of Shares Beneficially Owned (2)


Percent of TotalDavid Marks


18,025,000
(3)


82.53
%Craig Hodgkins


1,005,000



4.60
%Capt. Timothy Levensaler


1,115,000



5.10
%Katherine Ostruszka


2,500



*Paul Schwabe


2,500



*Farwell Equity Partners II, LLC


18,000,000
(3)


82.41
%All Executive Officers and Directors as a Group (6 persons)


20,162,500



92.78
%


* Less than 1%


(1)
Except as otherwise indicated, the address of each beneficial owner is c/o Marine Growth Ventures, Inc., 405-A Atlantis Road, Cape Canaveral, FL 32920.


(2)
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to the shares shown. Except where indicated by footnote and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of voting securities shown as beneficially owned by them.


(3)
Frank Crivello is the majority owner of the membership interests of Farwell Equity Partners II, LLC. David Marks is the managing member of Farwell Equity Partners II, LLC, and has sole investment and dispositive power with respect to all shares owned by such entity.






22





Item 13.                                Certain Relationships and Related Transactions





Revolving Note





On January 5, 2006 the Company entered into a Revolving Note (“Note A”) with an aggregate principal amount of $50,000 to Frank Crivello. Funds are advanced to us as needed to pay for ongoing operations. Note A had a maturity date of June 30, 2006. As a result of thirteen amendments to Note A, the principal amount of Note A was increased to $800,000 and the maturity date of Note A was extended to December 31, 2011. Note A has an interest rate of 10% and as of December 31, 2009, the principal balance was $59,500.





Revolving Note





On August 1, 2007, the Company issued a revolving note (“Note B”), with an aggregate principal amount of $100,000 to an entity that is controlled by the Chairman of the Board of Directors.   Funds are advanced to the Company, as needed, to finance ongoing operations.  Note B had a maturity date of July 31, 2008.  It has been agreed that the maturity date will extend to December 31, 2008 unless the lender notifies the borrower, in writing, thirty days prior to the maturity date.  Note B bears an interest rate of 10%.   As a result of eight amendments to Note Be, the principal amount of Note B was increase to $850,000 and the maturity date was extended to December 31, 2011.    The principal balance on Note B was $810,163 as of December 31, 2009.




Director Independence




The Board of Directors has analyzed the independence of each director and has determined that the following directors are independent as defined under the National Association of Securities Dealers Automated Quotations System (“NASDAQ”) rules and has no direct or indirect material relationships with the Company:





None





Item 14.                                Principal Accountant Fees and Services





The aggregate fees billed or accrued by our principal accountant for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2009 and 2008 were $30,000 and $50,000, respectively..








23








Item 15.                    Exhibits










Number

Description1.

Financial Statements:  See “Index to Consolidated Financial Statements” in Part II, Item 8 of the Form 10-K.2.

Financial Statement Schedule:  Schedules are included in the Consolidated Financial Statements or notes of this Form 10-K or are not required.3.

Exhibits:  The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Form 10-K.3.1

Registrant's Certificate of Incorporation, incorporated by reference to Exhibit 3.1, to the Company’s registration statement on Form SB-2 (the “SB-2”), filed with the Securities and Exchange Commission (the “SEC”) on September 2, 2005.3.2

Certificate of Amendment to Registrant's Certificate of Incorporation, incorporated by reference to Exhibit 3.2, to the Company’s SB-2, filed with the SEC on September 2, 2005.3.3

Certificate of Amendment to Registrant's Certificate of Incorporation, incorporated by reference to Exhibit 3.3, to the Company’s SB-2, filed with the SEC on September 2, 2005.3.4

Certificate of Amendment to Registrant's Certificate of Incorporation, incorporated by reference to Exhibit 3.4, to the Company’s SB-2, filed with the SEC on September 2, 2005.3.5

Registrant's By-Laws, incorporated by reference to Exhibit 3.5, to the Company’s SB-2, filed with the SEC on September 2, 2005.10.1

Sale and Purchase Agreement, by and between British Columbia Discovery Voyages, Inc., T. Jones Enterprises, Inc. and Trevor Jones, as sellers, and Marine Growth Ventures, Inc., as buyer. (incorporated by reference to Exhibit 10.1 of Form 8-K filed March 28, 2007)10.2

Loan and Security  Agreement  between  Greystone  Business Credit II LLC, Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc., dated as of March 27, 2007  (incorporated by reference to Exhibit 10.2 of Form 8-K filed March 28, 2007)10.3

Guaranty in favor of Greystone Business Credit II LLC, by and among Marine Growth Ventures, Inc., Marine Growth Canada, Ltd. and Marine Growth Finance & Charter, Inc., dated as of March 27, 2007 (incorporated by reference to Exhibit 10.3 of Form 8-K filed March 28, 2007)10.4

Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.4 of Form 8-K filed March 28, 2007)10.5

First Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.5 of Form 8-K filed March 28, 2007)10.6

Second Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.6 of Form 8-K filed March 28, 2007)10.7

Third Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.7 of Form 8-K filed March 21, 2007)10.8

Forth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.8 of Form 8-K filed March 28, 2007)10.9

Fifth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.9 of Form 8-K filed March 28, 2007)10.10

Sixth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello. (incorporated by reference to Exhibit 10.10 of Form 8-K filed March 28, 2007)10.11

Seventh Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.11 of Form 8-K filed March 28, 2007)   24
   10.12

Share Ship Agreement, date April 11, 2007, by and between Euro Oceans, Ltd., Marine Growth Ventures, Inc., Marine Growth Canada, Ltd., Sophlex Ship Management, Inc. and Ship Timeshare Management, Inc. (incorporated by reference to Exhibit 10.1 of Form 8-K filed April 17, 2007)10.13

Eighth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.1 of Form 8-K filed May 17, 2007)10.14Ninth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.10 of Form 8-K filed July 5, 2007)10.15

Bareboat Charter by and between Fractional Marine, Inc. and Greystone Maritime Holdings LLC, dated July 30, 2007 (incorporated by reference to Exhibit 10.1 of Form 8-K filed August 7, 2007)10.16

Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated August 1, 2007 (incorporated by reference to Exhibit 10.2 of Form 8-K filed August 7, 2007)10.17

First Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated September 6, 2007 (incorporated by reference to Exhibit 10.2 of Form 8-K filed September 10, 2007)10.18

Tenth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello (incorporated by reference to Exhibit 10.11 of Form 8-K filed September 25, 2007)10.19

Second Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated November 27, 2007 (incorporated by reference to Exhibit 10.3 of Form 8-K filed November 28, 2007)10.20

Third Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated January 4, 2008 (incorporated by reference to Exhibit 10.4 of Form 8-K filed January 8, 2008)10.21

Forth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated February 11, 2008 (incorporated by reference to Exhibit 10.5 of Form 8-K filed February 14, 2008)10.22

Eleventh Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello, dated March 19, 2008 (filed herewith)10.23

Fifth Amendment to the Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated April 16, 2008 (incorporated by reference to Exhibit 10.6 of Form 8-K filed April 16, 2008)10.24

Modification lf Agreement dated June 12, 2008 (incorporated by reference to Exhibit 10.1 of Form 8-k filed August 11, 2008)10.25

Sixth Amendment to the Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated June 25, 2008 (incorporated by reference to Exhibit 10.7 of Form 8-K filed June 26, 2008)    25
   10.26

Notice of default under Marine Growth Loan Agreement with Greystone Business Credit II, LLC dated February 9, 2009 (incorporated by reference to Exhibit 2.1 of Form 8-K filed on February 13, 2009)10.27

Seventh Amendment to the Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated April 24, 2009 (incorporated by reference to Exhibit 10.35 of Form 10-Q filed on November 12, 2009)10.28

Twelfth Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello, dated April 24, 2009 (incorporated by reference to Exhibit 10.36 of Form 10-Q filed on November 12, 2009)10.29

Eight Amended to the to the Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Irrevocable Children’s Trust, dated xxx (incorporated herein)10.30

Thirteen Amendment to Revolving Note by and among Marine Growth Ventures, Inc., its subsidiaries and Frank P. Crivello, dated xxx (incorporated herein)10.31

Amendment to Bylaws of Marine Growth Ventures, Inc.  (incorporated by reference to Exhibit 3.1 to Form 8-k field on June 1, 2009)10.32

Settlement agreement with Greystone (incorporated by reference to Exhibit 10.1 of Form 8-k filed on December 8, 2009)10.33

Employment agreement dated July 1, 2004 between the Company and Craig Hodgkins, incorporated by reference to Exhibit 10.1, to the Company’s SB-2, filed with the SEC on September 2, 2005.10.34

Employment agreement dated July 1, 2004 between the Company and Capt. Timothy Levensaler, incorporated by reference to Exhibit 10.2, to the Company’s SB-2, filed with the SEC on September 2, 200521.1

List of Subsidiaries, incorporated by reference to Exhibit 21.1, to the Company’s SB-2, filed with the SEC on September 2, 2005.31.1

Certification of CEO Pursuant to 13a-14(a) under the Exchange Act31.2

Certification of the CFO Pursuant to 13a-14(a) under the Exchange Act32.1

Certification of the CEO pursuant to 18 U.S.C Section 135032.2

Certification of the CFO pursuant to 18 U.S.C. Section 1350








26





SIGNATURES








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


MARINE GROWTH VENTURES, INC.Dated: March 30, 2010
By:
/s/ Craig HodgkinsCraig HodgkinsPresident and Director(Principal Executive Officer)Dated: March 30, 2010
By:
/s/ Katherine OstruszkaKatherine OstruszkaChief Financial Officer and Controller(Principal Financial Officer)











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




SIGNATURE
TITLE
DATE/s/ David Marks

David Marks
Chairman of the Board
March 30, 2010/s/ Craig Hodgkins

Craig Hodgkins
President and Director
March 30, 2010/s/ Katherine Ostruszka



Katherine Ostruszka
Chief Financial Officer and Controller (Principal  Accounting Officer and Principal Financial Officer)
March 30, 2010/s/ Capt Timothy Levensaler



Capt. Timothy Levensaler
Chief Operating Officer and Director
March 30, 2010/s/ Paul Schwabe

Paul Schwabe
Secretary and Director
March 30, 2010

















27

















Marine Growth Ventures, Inc.


And Subsidiaries


Consolidated Financial Statements


For the Years Ended December 31, 2009 and 2008











Marine Growth Ventures, Inc. and SubsidiariesTable of Contents

PageReport of Independent Registered Public Accounting Firm-Demetrius & Company, L.L.C.

F-1Consolidated Balance Sheets as of  December 31,  2009 and 2008

F-2Consolidated Statements of Operations for the Years endedDecember 31, 2009 and 2008

F-3Consolidated Statements of Stockholders’ Deficiency for the

Years ended December 31, 2009 and 2008

F-4Consolidated Statements of Cash Flow for the Years endedDecember 31, 2009 and 2008

F-5Notes to Consolidated Financial Statements as of December 31, 2009
F7-F15








28





Report of Independent Registered Public Accounting Firm














To The Board of Directors and


Shareholders of Marine Growth Ventures, Inc.





We have audited the accompanying consolidated balance sheets of Marine Growth Ventures, Inc. and its subsidiaries as of December 31, 2009 and 2008 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2009.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing   the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Marine Growth Ventures, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.





The accompanying consolidated financial statements have been prepared assuming that Marine Growth Ventures, Inc. and subsidiaries will continue as a going concern.  As discussed in Note1 to the financial statements, the Company requires additional working capital to meet its current liabilities.  This condition raises substantial doubt about its ability to continue as a going concern.   Management’s plans in regard to this matter are more fully described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.








/s/ Demetrius & Company,  L.L.C.





Wayne, New Jersey 07470


March 30, 2010








F-1








Marine Growth Ventures, Inc and SubsidiariesConsolidated Balance SheetsAs of December 31, 2009ASSETSDecember 31, 2009


December 31, 2008CURRENT ASSETSCash

$
1,570


$
7,897Prepaid Expenses


482



734Vessels Held for Sale


-



2,923,670Total Current Assets


2,051



2,932,301FIXED ASSETS, NET


453



818PRE PAID FINANCING COSTS


-



2,258OTHER ASSETSRetainers


20,000



17,500Other Deposits


1,656



1,656Total Other Assets


21,656



19,156TOTAL ASSETS

$
24,160


$
2,954,533LIABILITIES AND STOCKHOLDER'S DEFICIENCYCURRENT LIABILITIESAccrued Payroll

$
426,341


$
434,235Accounts Payable


384,939



539,986Accrued Interest Payable


204,100



209,943Accrued Expenses


325,527



259,450Note Payable – Greystone


-



5,149,503Note Payable – Other


810,163



648,613Note Payable – Stockholder


59,500



59,500Total Current Liabilities


2,210,570



7,301,230STOCKHOLDERS' DEFICIENCYPreferred Stock, $0.001 par value, 5,000,000shares authorized, none issued or outstandingCommon Stock, $0.001 par value, 100,000,000shares authorized, 21,839,500   issued and outstanding


21,840



21,840Additional Paid-In Capital


837,765



816,015Accumulated Deficit


(3,000,765
)


(5,149,829
)Accumulated Other Comprehensive (Loss)


(45,041
)


(34,723
)Total Stockholders' Deficiency


(2,186,410
)


(4,346,697
)TOTAL LIABILITIES & STOCKHOLDERS'DEFICIENCY

$
24,160


$
2,954,533





See Accompanying Notes to Consolidated Financial Statements








F-2






Marine Growth Ventures, Inc and SubsidiariesConsoldiated Statements of OperationsFor the Years Ended December 31, 2009 and 20082009


2008REVENUEShip Management Fees and Consulting Income

$
-


$
12,000Total Revenue


-



12,000Cost of Sales


-



140,125NET REVENUE


-



(128,125
)EXPENSESPayroll and Related  Expenses


40,583



180,807Professional Fees


171,690



245,961General and Administrative Expenses


34,122



118,927Selling Expenses


-



64,257Impairment of Vessel


-



864,926Operating Expenses


65,861



272,448Total Expenses


312,256



1,747,326LOSS FROM OPERATIONS


(312,256
)


(1,875,451
)OTHER INCOME(EXPENSE)Extinguishment Gain


2,683,809



-Interest (Expense)


(208,951
)


(368,040
)Loan Service Fee (Expense)


-



(48,155
)Financing Fees (Expense)


-



(20,781
)Sales Tax (Expense)


(1,773
)


(869
)Other (Expense)


(11,972
)


(24,671
)Total Other (Expense)


2,461,113



(462,516
)NET INCOME / (LOSS)

$
2,148,856


$
(2,317,186
)Basic and diluted Income/( loss) per common share

$
0.10


$
(0.11
)Weighted average number of commonshares outstanding - basic and diluted


21,789,637



21,789,637







See Accompanying Notes To Consolidated Financial Statements








F-3





Marine Growth Ventures, Inc. and Subsidiaries
 Consolidated Statements of Stockholders’ Deficiency
 For the Years Ended December  31, 2009 and 2008


Common Stock

Shares


Common Stock

Amount


Additional

Paid-In Capital


Accumulated Deficit


Accumulated Other Comprehensive Income/(Loss)


TotalBalance  December 31,  2007


21,739,500



21,740



555,699



(2,811,862
)


(33,053
)


(2,267,476
)Donated rent & services


-



-



18,750



-



-



18,750Forgiven Payroll for Stock


100,000



100



241,567



-



-



241,667Foreign Currency Translation


-



-



-



-



(1,670
)


(1,670
)Net Loss


-



-



-



(2,337,967
)


-



(2,337,967
)Balance  December 31,  2008


21,839,500



21,840



816,016



(5,149,830
)


(34,723
)


(4,346,697
)Donated rent & services


-



-



21,750



-



-



21,750Foreign Currency Translation


-



-



-



-



(10,318
)


(10,318
)Net Income / (Loss)


-



-



-



2,148,856



-



2,148,856Balance  December 31,  2008


21,839,500


$
21,840


$
837,765


$
(3,000,974
)

$
(45,041
)

$
(2,186,410
)







See Accompanying Notes To Consolidated Financial Statements










F-4











Marine Growth Ventures, Inc and SubsidiariesConsolidated Statements of Cash FlowFor the Years Ended December 31, 2009 and 20082009


2008CASH FLOWS FROM OPERATING ACTIVITIES:Net Income / ( Loss)

$
2,148,856


$
(2,337,967
)Adjustments to reconcile net loss to net cashused in operating activitiesDepreciation & Amortization


365



18,883Donated Rent & Services


21,750



18,750Impairment of Vessel


-



864,926Gain on Release of Asset


(2,683,809
)


-Changes in Operation Assets & Liabilities:Accounts Receivable


-



6,000Sales Tax Receivable


-



501Retainers


(1,996
)


(12,500
)Prepaid Insurance


(252
)


(15
)Accrued Payroll


(7,894
)


94,488Accounts Payable & Accrued Expenses


279,687



332,875Accrued Interest Payable


85,734



207,299Deferred Expenses


-



-Other Current Assets


525



525Net Cash Used by Operating Activities


(157,559
)


(806,235
)CASH FLOWS FROM FINANCING ACTIVITIESBank Overdraft


-



(17,343
)Payment on Note Payable – Greystone


-



(141,499
)Proceeds From Note Payable-Stockholder


-



447,078Proceeds From Note Payable – Related Party


161,550



523,113Net Cash Provided by Financing Activities


161,550



811,349Currency Conversion Gain/Loss


(10,318
)


2,783NET INCREASE (DECREASE) IN CASH:


(6,327
)


7,897BEGINNING CASH


7,897



-ENDING CASH

$
1,570


$
7,897







F-5







SUPPLEMENTAL DISCLOSURES OF CASH ITEMSInterest Paid

$
-


$
130,473SUPPLEMENTAL DISCLOSURES OF NON-CASH  INVESTING & FINANCING ACTIVITESGreystone (Pacific Aurora Note)

$
-


$
1,347,021Payment on Note Payable Stockholder


-



(1,156,628
)Payment on Accrued Interest


-



(40,393
)Payment on Note Payable – Related Party


-



(150,000
)Greystone (Babe)


-



2,350,002Purchase of Fixed Assets (Babe)


-



(2,289,926
)Payables


-



(60,076
)APIC


-



(241,567
)Common Stock


-



(100
)Accrued Payroll


-



241,667





See Accompanying Notes To Consolidated Financial Statements








F-6





Marine Growth Ventures, Inc. and Subsidiaries


Notes to Consolidated Financial Statements


As of December 31, 2009 and 2008





Note 1 – Organization and Operations and Going Concern





Note 1 – Organization and Operations, Going Concern and Bankruptcy





A.
Organization and Operations





Marine Growth Ventures, Inc. (“MGV”) was formed and incorporated in the state of Delaware on November 6, 2003.  MGV is a holding company that conducts its operations primarily through a wholly-owned subsidiary, Sophlex Ship Management, Inc. (“Sophlex”).  MGV, Marine Growth Finance & Charter, Inc., Inc., Sophlex Ship Management, Inc., Marine Growth Freight, Inc., Marine Aggregates, Inc., Gulf Casino Cruises, Inc., Ship Timeshare Management, Inc., Marine Growth Canada, Ltd., Fractional Marine, Inc., Cruiseship Share Owners Association, Inc. and Pacific Aurora Cruise Association, Inc. are referred to collectively herein as the “Company”.





The Company had no significant business operations until its acquisition of Sophlex on September 1, 2004.  Sophlex, which was founded in 1999, provides ship crewing and management services to vessel owners and operators in the United States and abroad.  The founder and the sole shareholder of Sophlex at the time of the acquisition is the current Chief Operating Officer of the Company.   At the time of acquisition both companies were private entities.





In addition, the Company is pursuing other opportunities in the shipping industry.





B.  Going Concern





Since its inception, the Company has been dependent upon the proceeds of loans from its stockholders and the receipt of capital investments to fund its continuing activities.  The Company has incurred operating losses since its inception.  The Company expects to incur significant increasing operating losses over the next several years until we can maintain a consistent revenue stream.   There is no assurance that the Company’s developmental and marketing efforts will be successful.   The Company will continue to require the infusion of capital or loans until operations become profitable.  There can be no assurance that the Company will ever achieve any revenues or profitable operations from the sale of its proposed products.  The Company is seeking additional capital at this time.  During the year end December 31, 2009, the Company had a net income of $2,148,856 and a negative cash flow from operations of $157,559 and also as of December 31, 2009, the Company had a working capital deficiency of $2,208,519 and a stockholders’ deficiency of $2,186,410.  As a result of the above, the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.   The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





F-7





C.  Bankruptcy of Marine Growth Canada, Ltd., a wholly owned subsidiary of Marine Growth Ventures, Inc.





On July 2, 2009, the Supreme Court of the British Columbia in Bankruptcy declared Marine Growth Canada, Ltd (“MGC”) bankrupt under the laws of British Columbia.   The court appointed a Trustee to manage the affairs and property of Marine Growth Canada, Ltd.  The assets of  MGC consists of the vessel the Pacific Aurora and its furnishings.





The assets of MGC total $1,133 and the liabilities total $68,475 at December 31, 2009, the company has not recorded any additional income or expenses due to the bankruptcy.   At this time the trustee has notified us that there are minimal transactions that have been dispersed.








Note 2 - Summary of Significant Accounting Policies





(A)
Principles of Consolidation





The accompanying condensed consolidated financial statements include the accounts of Marine Growth Ventures, Inc. and its wholly-owned subsidiaries, Marine Growth Finance & Charter, Inc., Inc., Sophlex Ship Management, Inc., Marine Growth Freight, Inc., Marine Aggregates, Inc., Gulf Casino Cruises, Inc., Ship Timeshare Management, Inc., Marine Growth Canada, Ltd., Fractional Marine, Inc., Cruiseship Share Owners Association, Inc. and Pacific Aurora Cruise Association, Inc.  All material inter-company accounts and transactions have been eliminated in consolidation





(B)
Cash





The Company maintains its cash balances with various financial institutions.  Balances at the institutions may at times exceed Federal Deposit Insurance Corporation limits.





(C)
Fixed Assets





Office furniture and computer equipment is stated at cost less accumulated depreciation.  The cost of maintenance and repairs is charged to operations as incurred.  Depreciation is computed by the double declining balance method over the estimated economic useful life of the assets (5 – 7 years).





Depreciation on vessels owned by the company is taken when the vessel is crewed and placed in service.  Depreciation will be taken over the estimated economic useful life of the asset (20 years).





(D)
Revenue Recognition





The Company recognizes ship management revenue and consulting revenue when earned.  At the time of the transaction, the Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction and whether collectability is reasonably assured.   If a significant portion of a fee is due after the normal payment terms, the Company accounts for the fee as not being fixed and determinable. In these cases, the Company recognizes revenue as the fee becomes due.  Where the Company provides a service at a specific point in time and there are no remaining obligations, the Company recognizes revenue upon completion of the service.   The Company recognizes charter revenue on the first of the month when the fee is billed.





F-8








(E)
Fair Value of Financial Instruments





The carrying amounts of the Company’s financial instruments, including cash, accrued payroll, accounts payable, accrued expenses, and note payable - stockholder at December 31, 2009, approximate their fair value because of their relatively short-term nature.





(F)
Use of Estimates





The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results may differ from those estimates.





(G)
Accounting for the Impairment of Long-Lived Assets





The long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable.  It is reasonably possible that these assets could become impaired as a result of technology or other industry changes.  Determination of recoverability of assets to be held and used is performed by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of assets exceed the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.  Impairment of vessel expenses including costs for disposal were $864,926 for the twelve months ended December 31, 2008.   $300,000 was for the approximately cost of disposal for the Babe.   The remaining $564,926 was for the impairment of the fair market value of the Babe.








(H)
Deposits





Deposits as of December 31, 2009 included office rental security deposit and utility deposit.  Deposits are reduced as charges are incurred or the funds are returned.





(I)
Accrued Expenses





Accrued expenses as of December 31, 2009 were comprised of accrued legal fees.





(J)
Loss Per Share





Net loss per  share (basic and diluted) has been computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during each period.  Common stock equivalents were not included in the calculation of diluted loss per share as there were none outstanding during the periods presented as well as their effect would be anti-dilutive.





F-9





(K)
Segment Reporting





FASB ASC 280-10-50, “Disclosure About Segments of an Enterprise and Related Information” requires use of the “management approach” model for segment reporting.  The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.  Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.  Currently, ASC 280-10-50 has no effect on the Company’s financial statements as substantially all of the Company’s operations are conducted in one industry segment during the years ended December 31, 2009 and 2008.





(L)
Recent Accounting Pronouncements








In June 2009, the FASB issued Statement No. 168, The FASB Accounting Standards modificationTM and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162 (“FAS 168”). Effective for financial statements issued for interim and annual periods ending after September 15, 2009 the FASB ASC (the “Codification”) is now the authoritative source of U.S. GAAP. The Codification changes the structure of authoritative guidance to a Topic based model versus the previous model of Original Pronouncements, modified by Emerging Issues Task Force Abstracts, FASB Staff Positions, etc. Among other things, the Codification is expected to: reduce the amount of time and effort required to solve an accounting research issue; mitigate the risk of noncompliance through improved usability of the literature; provide accurate information with real-time updates as Accounting Standards Updates are released; and assist the FASB with research and convergence efforts. The adoption of the Codification did not impact the Company’s financial condition or operating results.





In May 2009, the FASB issued Statement 165, Subsequent Events (FASB Accounting Standards CodificationTM (ASC) 855, Subsequent Events), to incorporate the accounting and disclosure requirements for subsequent events into U.S. generally accepted accounting principles. Prior to the issuance of the Statement, these requirements were included in the auditing standards in AICPA AU section 560, Subsequent Events. ASC 855 introduces new terminology, defines a date through which management must evaluate subsequent events, and lists the circumstances under which an entity must recognize and disclose events or transactions occurring after the balance-sheet date. It is effective prospectively for interim or annual reporting periods ending after June 15, 2009. The adoption of this standard did not have an impact on our results of operations or financial position.











F-10





Note 3- Related Party Transactions





On January 5, 2006 the Company entered into a Revolving Note (“Note A”) with an aggregate principal amount of $50,000 to Frank Crivello. Funds are advanced to us as needed to pay for ongoing operations. Note A had a maturity date of June 30, 2006. As a result of thirteen amendments to Note A, the principal amount of Note A was increased to $800,000 and the maturity date of Note A was extended to December 31, 2011. Note A has an interest rate of 10%.   As of December 31, 2009, the balance on this loan is $126,381 ($59,500 in principal and $66,881 in interest).





On August 1, 2007, the Company issued a revolving note (“Note B”), with an aggregate principal amount of $100,000 to an entity that is controlled by the Chairman of the Board of Directors.   Funds are advanced to the Company, as needed, to finance ongoing operations.  Note B had a maturity date of July 31, 2008.  It has been agreed that the maturity date will extend to December 31, 2008 unless the lender notifies the borrower, in writing, thirty days prior to the maturity date.  Note B bears an interest rate of 10%.   As a result of eight amendments to Note B, the principal amount of Note B was increased to $850,000 and the maturity date was extended to December 31, 2011. During the twelve months ended December 31, 2009, the Company received $161,550 on this loan.  As of December 31, 2009, the balance on this loan is $947,852 ($810,163 in principal and $137,669 in interest).





In June 2008, an officer of the Company exchanged $241,667 worth of accrued payroll in exchange for 100,000 shares of common stock.    The Company reported $241,577 in additional paid in capital and $100 in common stock on the financials.  The stock was valued based on the five day average trading value of the stock on the date of the exchange.





The Company utilizes space in Milwaukee, Wisconsin owned by an entity controlled by the Chairman of the Board of Directors.    The fair market value of this rent was $250 per month in and was recorded as $3000 rent expense and a corresponding related party liability for the twelve months ended December 31, 2009.   On December 31, 2009, this debt was forgiven and converted into additional paid in capital.  On March 1, 2010, the Company entered into a month-to-month lease agreement with an entity controlled by the Chairman of the Board of Directors for $1,000 per month.





The Company utilizes employees of an entity controlled by the Chairman of the Board of Directors.    In exchange for the use of these employees, an employee of the Company completes work for an entity controlled by the Chairman of the Board of Directors.    The value of the work done by the employees of the entity controlled by the Chairman of the Board of Directors exceeded the value of the work of the Company’s employee by $21,750 during the twelve months ending December 31, 2009 and was recorded as payroll and a corresponding related party liability was recorded.   On December 31, 2009, this debt was forgiven and converted into additional paid in capital.











F-11





Note 4 – Fixed Assets





Fixed assets as of December 31, 2009 and 2008 consisted of:




December 31, 2009


December 31, 2008Office Furniture

$
1,286


$
1,286Computer Equipment


1,827



1,827Vessel


-



-Vessel Furnishings


-



-Less: Accumulated Depreciation


(2,660
)


(2,294
)Fixed Assets, net

$
453


$
819





Depreciation expense for the twelve months ended December 31, 2009 and 2008 amounted to $366 and $360, respectively.





Note 5 – Greystone Business Credit II, LLC








On August 5, 2009, the Company finalized an agreement with Greystone Maritime Holdings, LLC, Greystone Business Credit II, L.L.C., and GBC Funding, LLC (collectively, “Greystone”) in connection with the debt of the Company owed to Greystone and secured by the vessel the “Babe” and Greystone’s purported sale of the vessel in April 2009 (the “Settlement”).  Pursuant to the Settlement, in consideration for the payment of $23,025 by Greystone to certain officers who performed work related to the Babe, the Company released Greystone from all claims of the Company, and liabilities to the Company, in connection with the purported sale of the vessel and agreed not to challenge the sale or the receipt by Greystone of proceeds in connection with the sale. In connection with the settlement agreement, the company wrote off the carrying amount of the vessel in the amount of $1,425,000, in exchange for release of notes payable, accrued interest and other fees in the amount of $2,776,171 and accordingly the company recorded an extinguishment gain of $1,351,171.





On or about November 30, 2009, the Company, together with certain affiliated entities, collectively, the “Marine Borrowers”), David Marks (“Marks”) and Frank Crivello (“Crivello”) and other parties, entered into a Settlement Agreement with Greystone Business Credit II, L.L.C. (“GBC II”), GBC Funding, LLC (“GBC Funding”) and Greystone Maritime Holdings, LLC  (“Greystone Maritime” and together with GBC II and GBC Funding, collectively, “Greystone Parties”). The Settlement Agreement, among other things, settles (x) certain litigation, including:





i.
an Admiralty Action by GBC II against Marine Growth Finance and Charter (“MGFC”), Marine Growth Ventures, Fractional Marine and Marine Ventures in the Federal Court of Canada known as Greystone Business Credit II, LLC v. Marine Growth Canada, Ltd., et al, Court No. T-340-09 (the “Admiralty Litigation”); andii.
a Bankruptcy Order by GBC II against Marine Growth in the Supreme Court of British Columbia, Canada known as In the Matter of the Bankruptcy of Marine Growth Canada, Ltd., Court No. B09-1130 (the “Canadian Bankruptcy Litigation”),





and (y) a loan transaction between MGFC, as borrower, and GBC II, as lender.











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Pursuant to the Settlement Agreement, Greystone Parties agreed to return and/or terminate any and all stock pledges and certificates pertaining to MGFC and to terminate the guaranty executed by MGFC in favor of GBC II.  It also was agreed that, with respect to the vessel known as the Pacific Aurora (the “Aurora”), which is registered in British Columbia, Canada and is currently docked in Vancouver, the Crivello Parties (being Marks, Crivello, the Marine Borrowers and other affiliated parties named in the Settlement Agreement) would forever be barred from asserting any claim to the Aurora or challenging any rights of the Greystone Parties to the Aurora, and would reasonably cooperate with GBC II in any manner required in the Admiralty Litigation or the Canadian Bankruptcy Litigation to effect GBC II’s possessions of and title to the Aurora.  Pursuant to the Settlement Agreement, the Crivello Parties, including the Marine Borrowers, and the Greystone Parties, will exchange general releases of outstanding claims, except that Crivello and Marks personally guaranteed performance by the Crivello Parties of their obligations under the Settlement Agreement.  In connection with the settlement agreement, the Company wrote off the carrying amount of the vessel and it’s furnishings in the amount of $1,498,670, in exchange for release of notes payable, accrued interest and other ship related expenses in the amount of $2,831,308 and accordingly the company recorded a gain on release of assets of  $1,332,638.





Note 6 – Income Tax





Differences between the tax provision computed using the statutory federal income tax rate and the effective income tax rate on operations is as follows:





2009


2008U.S. Federal Statutory Rate

$
(298,062
)

$
(519,032
)Foreign Statutory Rate


(438,865
)


(236,209
)Total


(731,927
)


(755,242
)Tax Benefit not provided due to valuation allowance


731,927



755,242$
0


$
0




The valuation decreased by $23,315 in 2009 and increased $298,111 in 2008.





As of December 31, 2009, the Company has a net operating loss carryforward for U.S Federal Income tax purposes in the aggregate of $3,061,130, which expire at various dates through 2030.





Components of the Company’s U.S. deferred tax assets are as follows:





2009


2008U.S deferred tax assets:U.S. tax benefits related to net operating loss carry forwards

$
928,366


$
1,600,293Valuation allowance for U.S. deferred tax assets


(928,366
)


(,1600,293
)Net U.S. deferred tax assets

$
0


$
0








F-13








Note 7 – Operating Leases





The Company utilizes space in Milwaukee, Wisconsin owned by an entity controlled by the Chairman of the Board of Directors.    This space has been utilized since inception. The fair market value of this rent was $250 per month in 2009 (See Note 3).





On March 1, 2010, the Company entered into a month-to-month lease with an entity controlled by the Chairman of the Board of Directors.   The monthly lease payment is $1,000.





Minimum future required lease payments under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2010 are as follows:







Year Ending December 31,
Amount2010
$0




Rent expense charged to operations was $22,419 and $30,167 in 2009 and 2008, respectively.




Note 8 – Babe





On August 28, 2007, Fractional Marine, Inc., a wholly owned subsidiary of Marine Growth Ventures, Inc., entered into a Bareboat Sub-Charter with an individual pursuant to which that individual will charter hire the M/V Babe for $6,000 per month until February 1, 2008 upon which time the individual has a purchase option.   As part of this agreement, the individual was to place a $180,000 security deposit for the boat.  The deposit would be non-refundable if the individual did not purchase the boat.   The individual did not purchase the boat and defaulted on the bareboat sub-charter.  On April 21, 2008, the M/V Babe was repossessed by the Company and the obligors were not released from their secured and unsecured obligations.  The Company had taken a full reserve against the $180,000 based upon the possible collectability of the money owed to the Company and the costs that will be incurred to collect these funds.  The Company is currently seeking recovery again these obligations, anticipates taking action in the first quarter of 2010.  The net recovery will be reflected as income to the Company.





Note 9 – Subsequent Events





For the year ended December 31, 2009, the Company has evaluated subsequent events for potential recognition and disclosure as of the date of financial statement issuance.





Revolving Note “A” issued on January 5, 2006





On March 29, 2010, the company renegotiated the maturity date from February 20, 2009 to December 31, 2011.








,           Revolving Note “B” issued on August 1, 2007





On March 29, 2010 the Company increased the availability on the revolving note to $850,000 and renegotiated the maturity date from December 30, 2008 to December 31, 2011.








F-14





A month-to-month lease was signed between Marine Growth Ventures, Inc. and a company controlled by the Chairman of the Board of Directors.  The monthly lease payment commencing March 1, 2010 is $1,000 per month.





During the fourth quarter of 2008, a case was filed by Euro Oceans, Co.  against Marine Growth Ventures, Inc., Marine Growth Canada, LTD, Sophlex Ship Management, Inc and Ship Timeshare Management, Inc. for breach of contract.  This case is currently pending and the parties are in settlement discussions as of the date of the financial statement issuance.















F-15