U.S.
Securities and Exchange Commission


Washington,
D.C. 20549
 
 FORM
10-Q
 (Mark
One)
 
 x
                QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      for the quarterly period ending March 31,
2009
 
 
 o
                TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For the
transition period from _____to_____
 
 
 Commission
file number    000-31959
 
 NUCLEAR SOLUTIONS, INC.(Name
      of Small Business Issuer in its
Charter)
 
 
 NEVADA
                  
                  88-0433815(State
      of Incorporation)
                  
                  (IRS
      Employer identification No.)
 
 
 5505 Connecticut Ave NW, Suite 191 Washington, DC
      20015(Address
      of principal executive
      offices)        (Zip
      Code)
 
 
 Issuer's telephone number, (202)
      787-1951
 Indicate
by check mark whether the registrant (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 o
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definitions of “accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check
one):     Large accelerated filer o ,
Accelerated filer o, Non-accelerated filer
o, Smaller
reporting company x
 
 Indicate
by check mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Exchange Act).
 Yes o No x
 
 APPLICABLE
ON TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS
 
 Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act subsequent to the distribution of
securities under a plan confirmed by the court. Yes o No o
 
 APPLICABLE
ONLY TO CORPORATE ISSUERS:
 
 Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date. As of May 20, 2009 we had 97,490,981
shares of common stock issued and outstanding.
 
  
  
 Contents
                Page
      No.Part
      I – Financial Information
                2Item
      1.  Financial Statements
                2Item
      2.  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                12Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
                17Item
      4.  Controls and Procedures
                17Part
      II – Other Information
                18Item
      1.  Legal Proceedings
                18Item
      1A. Risk Factors
                18Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
                18Item
      3.  Defaults Upon Senior Securities
                18Item
      4.  Submission of Matters to a Vote of Security
      Holders
                18Item
      5.  Other Information
                18Item
      6.  Exhibits
                18Signatures
                19
 
 
 
 PART I
 FINANCIAL
INFORMATION
  Item
      1.
                Financial
      Statements.
 
 NUCLEAR SOLUTIONS, INC. AND
SUBSIDIARY
 
 INDEX TO FINANCIAL
STATEMENTS
 
 PageCondensed Consolidated Balance
      Sheets
                      as of March 31, 2009 (Unaudited)
      and December 31, 2008
                    
                    2Condensed Consolidated Statements
      of Operations
                      for the three months ended March
      31, 2009 and 2008 (Unaudited)
                    
                    3Condensed Consolidated Statements
      of Stockholders’ Equity
                      Year ended December 31, 2008 and
      the three months ended March 31, 2009 (Unaudited)
                    
                    4Condensed Consolidated Statements
      of Cash Flows
                      for the three months ended March
      31, 2009 and 2008 (Unaudited)
                    
                    5Notes to Condensed Consolidated
      Financial Statements (Unaudited)
                    
                    6 - 11
 PART
I-FINANCIAL INFORMATION
 
 Item
      1.
                Financial
      Statements
  NUCLEAR SOLUTIONS,
INC.
 AND
SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE
SHEETS
 March 31,
                                                          
                                                          
                                                          December
31,2009
                                                          
                                                          
                                                          2008(unaudited)ASSETSCurrent
    assets:Cash
                                                          
                                                          $
                                                          17,002
                                                          
                                                          
                                                          $
                                                          176,279Prepaid
      Expenses
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          12,900Total current
      assets
                                                          
                                                          
                                                          17,002
                                                          
                                                          
                                                          
                                                          189,179Property and equipment, net of
      accumulated depreciationof  $3,863 and $3,492,
      as of March 31, 2009 and December 31, 2008
    respectively
                                                          
                                                          
                                                          3,567
                                                          
                                                          
                                                          
                                                          3,938Other
assets
                                                          
                                                          
                                                          4,600
                                                          
                                                          
                                                          
                                                          84,100Total
assets
                                                          
                                                          $
                                                          25,169
                                                          
                                                          
                                                          $
                                                          277,217LIABILITIES AND DEFICIENCY IN
      STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts payable and accrued
      expenses
                                                          
                                                          $
                                                          5,053,495
                                                          
                                                          
                                                          $
                                                          4,687,644Accrued executive
      compensation
                                                          
                                                          
                                                          961,996
                                                          
                                                          
                                                          
                                                          846,583Advance payments
      received
                                                          
                                                          
                                                          28,489
                                                          
                                                          
                                                          
                                                          154,114Advances
      payable
                                                          
                                                          
                                                          9,950
                                                          
                                                          
                                                          
                                                          -Convertible notes payable -
      related parties, net of discount of $0
                                                          
                                                          
                                                          21,444
                                                          
                                                          
                                                          
                                                          19,778and $1,666, as of March 31, 2009
      and December 31, 2008 respectivelyConvertible notes payable - other,
      net of discount of $0as of March 31, 2009 and December
      31, 2008
                                                          
                                                          
                                                          39,000
                                                          
                                                          
                                                          
                                                          39,000Total current
      liabilities
                                                          
                                                          
                                                          6,114,374
                                                          
                                                          
                                                          
                                                          5,747,119Derivative liability (Note
      4)
                                                          
                                                          
                                                          5,101
                                                          
                                                          
                                                          
                                                          1,660Total
      liabilities
                                                          
                                                          
                                                          6,119,475
                                                          
                                                          
                                                          
                                                          5,748,779Commitments and
      contingenciesDeficiency in stockholders'
      equityPreferred stock, $0.0001 par
      value; 10,000,000 sharesauthorized, no shares issued and
      outstanding
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -Common stock, $0.0001 par value;
      100,000,000shares
      authorized,  97,490,981  issued
    andoutstanding, as of March 31, 2009
      and December 31, 2008
                                                          
                                                          
                                                          9,749
                                                          
                                                          
                                                          
                                                          9,749Additional paid-in
      capital
                                                          
                                                          
                                                          19,931,944
                                                          
                                                          
                                                          
                                                          19,931,944Deferred equity based
      expense
                                                          
                                                          
                                                          (317,652
                                                          )
                                                          
                                                          
                                                          (437,698
                                                          )Accumulated
      deficit
                                                          
                                                          
                                                          (25,718,347
                                                          )
                                                          
                                                          
                                                          (24,975,557
                                                          )Total deficiency in stockholders'
      equity
                                                          
                                                          
                                                          (6,094,306
                                                          )
                                                          
                                                          
                                                          (5,471,562
                                                          )Total liabilities and deficiency
      in stockholders' equity
                                                          
                                                          $
                                                          25,169
                                                          
                                                          
                                                          $
                                                          277,217
  The accompanying notes are an integral
part of the unaudited condensed consolidated financial
statements.
  2
  NUCLEAR SOLUTIONS,
INC.
 AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS
OF LOSSES
 (unaudited)
 For
      the Three Months Ended March 31,2009
                                                  
                                                  
                                                  2008Revenue
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -Executive
      compensation
                                                  
                                                  
                                                  125,313
                                                  
                                                  
                                                  
                                                  66,354Consulting
                                                  
                                                  
                                                  285,646
                                                  
                                                  
                                                  
                                                  630,322Legal and professional
      fees
                                                  
                                                  
                                                  258,251
                                                  
                                                  
                                                  
                                                  229,125General and administrative
      expenses
                                                  
                                                  
                                                  192,502
                                                  
                                                  
                                                  
                                                  75,785Depreciation and
      amortization
                                                  
                                                  
                                                  371
                                                  
                                                  
                                                  
                                                  1,229Payments received pursuant to
      collaborative arrangement
                                                  
                                                  
                                                  (125,625
                                                  )
                                                  
                                                  
                                                  -736,458
                                                  
                                                  
                                                  
                                                  1,002,815Loss from
      operations
                                                  
                                                  
                                                  (736,458
                                                  )
                                                  
                                                  
                                                  (1,002,815
                                                  )Other
      Income(expenses)Interest
      expense
                                                  
                                                  
                                                  (2,891
                                                  )
                                                  
                                                  
                                                  (252,599
                                                  )Change in fair value of derivative
      liability
                                                  
                                                  
                                                  (3,441
                                                  )
                                                  
                                                  
                                                  (2,165
                                                  )Loss before provision for income
      taxes
                                                  
                                                  
                                                  (742,790
                                                  )
                                                  
                                                  
                                                  (1,257,579
                                                  )Provision for income
      taxes
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  -Net loss
                                                  
                                                  $
                                                  (742,790
                                                  )
                                                  
                                                  $
                                                  (1,257,579
                                                  )Basic and diluted loss per
      share
                                                  
                                                  $
                                                  (0.01
                                                  )
                                                  
                                                  $
                                                  (0.02
                                                  )Weighted average number of common
      sharesoutstanding, basic and
      diluted
                                                  
                                                  
                                                  97,490,981
                                                  
                                                  
                                                  
                                                  79,790,496
  The accompanying notes are an integral
part of the unaudited condensed consolidated financial
statements.
 3
  NUCLEAR SOLUTIONS,
INC.
 AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF
DEFICIENCY IN STOCKHOLDERS' EQUITY
 FOR THE PERIOD JANUARY 1, 2009 TO March
31, 2009
 (unaudited)
 TotalDeficiency
      in
      Stockholders'EquityCommon
Stock
                                                            
                                                            
                                                            AdditionalPaid-InCapital
                                                            
                                                            
                                                            DeferredEquityBased
    Expense
                                                            
                                                            
                                                            AccumulatedDeficitShares
                                                            
                                                            
                                                            AmountBalance January  1,
      2009
                                                            
                                                            
                                                            97,490,981
                                                            
                                                            
                                                            $
                                                            9,749
                                                            
                                                            
                                                            $
                                                            19,931,944
                                                            
                                                            
                                                            $
                                                            (437,698
                                                            )
                                                            
                                                            $
                                                            (24,975,557
                                                            )
                                                            
                                                            $
                                                            (5,471,562
                                                            )Deferred
      compensation
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (150,000
                                                            )
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (150,000
                                                            )Amortization of deferred
      compensation
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            270,046
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            270,046Net loss
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (742,790
                                                            )
                                                            
                                                            
                                                            (742,790
                                                            )Balance March 31,
      2009
                                                            
                                                            
                                                            97,490,981
                                                            
                                                            
                                                            $
                                                            9,749
                                                            
                                                            
                                                            $
                                                            19,931,944
                                                            
                                                            
                                                            $
                                                            (317,652
                                                            )
                                                            
                                                            $
                                                            (25,718,347
                                                            )
                                                            
                                                            $
                                                            (6,094,306
                                                            )
  The accompanying notes are an integral
part of the unaudited condensed consolidated financial
statements.
 4
  NUCLEAR SOLUTIONS,
INC.
 AND SUBSIDIARY
  (unaudited)
 For The Three Months Ended March
      31,2009
                                                                      
                                                                      
                                                                      2008CASH FLOWS FROM OPERATING
      ACTIVITIES:Net loss
                                                                      
                                                                      $
                                                                      (742,790
                                                                      )
                                                                      
                                                                      $
                                                                      (1,257,579
                                                                      )Adjustments to reconcile net loss
      to net cashused in operating
      activities:Depreciation and
      amortization
                                                                      
                                                                      
                                                                      371
                                                                      
                                                                      
                                                                      
                                                                      1,229Amortization of debt discount -
      beneficial conversion feature ofconvertible note and
      warrants
                                                                      
                                                                      
                                                                      1,666
                                                                      
                                                                      
                                                                      
                                                                      244,589Financing Cost attributable to
      warrantsChange in fair value of derivative
      liability
                                                                      
                                                                      
                                                                      3,441
                                                                      
                                                                      
                                                                      
                                                                      2,165Amortization of deferred
      compensation
                                                                      
                                                                      
                                                                      270,046
                                                                      
                                                                      
                                                                      
                                                                      -Stock
      and warrants issued for services
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      858,640Changes in operating assets and
      liabilities:Accounts
      receivablePrepaid
      Expenses
                                                                      
                                                                      
                                                                      12,900
                                                                      
                                                                      
                                                                      
                                                                      (103,722
                                                                      )Other
Assets
                                                                      
                                                                      
                                                                      79,500
                                                                      
                                                                      
                                                                      
                                                                      (79,500
                                                                      )Accounts payable and accrued
      expenses
                                                                      
                                                                      
                                                                      215,851
                                                                      
                                                                      
                                                                      
                                                                      57,560Accrued executive
      compensation
                                                                      
                                                                      
                                                                      115,413
                                                                      
                                                                      
                                                                      
                                                                      36,771Advance payments
      received
                                                                      
                                                                      
                                                                      (125,625
                                                                      )
                                                                      
                                                                      
                                                                      -Net cash used in operating
      activities
                                                                      
                                                                      
                                                                      (169,227
                                                                      )
                                                                      
                                                                      
                                                                      (239,847
                                                                      )CASH FLOWS FROM INVESTING
      ACTIVITIES:Net cash used in investing
      activities
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -CASH FLOWS FROM FINANCING
      ACTIVITIES:Advances
      payable
                                                                      
                                                                      
                                                                      9,950
                                                                      
                                                                      
                                                                      
                                                                      -Proceeds from issuance of
      debt
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      58,000Net cash provided by financing
      activities
                                                                      
                                                                      
                                                                      9,950
                                                                      
                                                                      
                                                                      
                                                                      58,000Net increase in
      cash
                                                                      
                                                                      
                                                                      (159,277
                                                                      )
                                                                      
                                                                      
                                                                      (181,847
                                                                      )Cash, beginning of
      period
                                                                      
                                                                      
                                                                      176,279
                                                                      
                                                                      
                                                                      
                                                                      192,981Cash, end of
      period
                                                                      
                                                                      $
                                                                      17,002
                                                                      
                                                                      
                                                                      $
                                                                      11,134Supplemental
      disclosures:Cash paid
    for:Interest
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      -Income
taxes
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      -Non-cash investing and financial
      activities:Amortization of debt discount -
      beneficial conversion feature ofconvertible note and
      warrants
                                                                      
                                                                      $
                                                                      1,666
                                                                      
                                                                      
                                                                      $
                                                                      244,589Payment of debt and interest with
      common stock
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      746,508Beneficial conversion
      discount
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      58,000Payment of accrued expenses with
      common stock
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      312,000
  The accompanying notes are an integral
part of the unaudited condensed consolidated financial
statements.
  5
  NUCLEAR
SOLUTIONS, INC.
 AND
SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 MARCH
31, 2009
 (Unaudited)
 
 
 NOTE
1 - ORGANIZATION AND NATURE OF OPERATIONS
 
 Nuclear
Solutions, Inc. ("the "Company") was organized February 27, 1997 under the laws
of the State of Nevada, as Stock Watch Man, Inc. On September 12, 2001, the
Company amended its articles of incorporation to change its name to Nuclear
Solutions, Inc.
 
 On
September 2, 2005 the Company formed a wholly owned subsidiary, Fuel Frontiers
Inc.(“FFI”), formally, Future Fuels, Inc., which had minimal operations through
June 30, 2008.
 
 On July
31, 2006 the company formed a wholly owned subsidiary, Liquidyne Fuels, which
has had no activity through March 31, 2009.
 
 The
unaudited condensed consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany transactions and
balances have been eliminated in the unaudited condensed consolidated financial
statement.
 
 Business
 
 Nuclear
Solutions, Inc. is engaged in the research, development, and commercialization
of innovative product technologies, which are generally early-stage, theoretical
or commercially unproven. We operate a highly technical business and our primary
mission is to develop advanced product technologies to address emerging market
opportunities in the fields of homeland security, nanotechnology, and nuclear
remediation. Our wholly owned subsidiary Fuel Frontiers, Inc. concentrates on
developing fuel production facilities to produce ultra-clean synthetic diesel
from feedstocks such as coal.
  Basis
of Presentation
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with Regulation S-X promulgated by the Securities and
Exchange Commission and do not include all of the information and footnotes
required by generally accepted accounting principles in the United States for
complete financial statements. In the opinion of management, these interim
financial statements include all adjustments, which include only normal
recurring adjustments, necessary in order to make the financial statements not
misleading. The results of operations for such interim periods are not
necessarily indicative of results of operations for a full year. The unaudited
condensed consolidated financial statements should be read in conjunction with
the audited consolidated financial statements and notes thereto of the Company
and management's discussion and analysis of financial condition and results of
operations included in the Company's Annual Report for the year ended December
31, 2008 as filed with the Securities and Exchange Commission on Form
10-K.
 
 6
  NOTE
2 - ACCOUNTING POLICIES AND PROCEDURES
 
 Revenue
Recognition
 
 Revenues
are recognized in the period that services are provided. For revenue from
product sales, the Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, “Revenue Recognition” ("SAB104"), which superseded
Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”
("SAB101"). SAB 101 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or is subject to refund until such time that the Company and the
customer jointly determine that the product has been delivered or no refund will
be required. Payments received in advance are deferred.
  SAB 104
incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
“Multiple-Deliverable Revenue Arrangements”. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.
 
 Licensing
fee income generally is being recognized ratably over the term of the license.
The Company's management has determined that the collectibility and length of
time to collect the remaining contracted price due from its licensee can not be
reasonably assured. Accordingly, revenues will be recognized as
collected.
 
 Collaborative
Arrangement
 
 The
Company, through its subsidiary FFI, has entered into a collaborative
arrangement with Kentucky Fuel Associates, Inc.  (“KFA”) for the
development of coal-based gas-to-liquid (CTL) fuel production facilities in the
State of Kentucky. KFA has agreed to provide an initial funding of $2,000,000
per site to be applied by FFI towards any and all costs and expenses incurred in
the ordinary course of business for the development, construction and arranging
of financing to closure including without limitation the following costs:
engineering, procurement, administrative, development management, financing,
legal, operations and maintenance costs for each said fuel production facility.
In consideration for KFA’s initial minimum funding contribution, KFA will
receive 7% of the annual net pre-tax income of each jointly developed CTL diesel
fuel facility and 2.5% equity interest in the first CTL diesel fuel facility
developed by FFI and KFA. Additionally, KFA will have the exclusive right to
develop CTL diesel fuel facilities with FFI in the state of Kentucky and a
conditional first right of refusal to develop CTL diesel fuel facilities in the
remainder of the United States.
 
 We are
accounting for this agreement pursuant to EITF 07-01, “Accounting for
Collaborative Arrangements”. During the three months ended March 31, 2009 we
expended $125,625 towards the development of the initial CTL facility. We have
reported this amount as payments received pursuant to collaborative agreements.
The unexpended balance of payments received of $28,489 and $154,114 at March 31,
2009 and December 31, 2008, respectively, is reported as a current liability as
advance payments received.
 
 Use
of Estimates
 
 The
preparation of 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 financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
 
 7
  Loss
Per Share
 
 Basic and
diluted loss per common share for all periods presented is computed based on the
weighted average number of common shares outstanding during the year as defined
by SFAS No. 128, "Earnings Per Share". The assumed exercise of common stock
equivalents was not utilized since the effect would be anti-dilutive. At March
31, 2009 and 2008, the Company had 1,019,557 and 1,047,645 potentially dilutive
securities, respectively.
  Liquidity
 
 As shown
in the accompanying unaudited condensed consolidated financial statements, the
Company has incurred net losses of $742,790 and $1,257,579 during the three
month periods ended March 31, 2009 and 2008, respectively. The Company's current
liabilities exceeded its current assets by $6,097,372 as of March 31, 2009.
Consequently, its operations are subject to all risks inherent in the
establishment of a new business enterprise.
 
 Fair
Value Accounting
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Statement No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the
FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No.
157” (“FSP FAS 157-2”). FSP FAS 157-2 delayed the effective date of FAS 157 for
nonfinancial assets and nonfinancial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). The provisions of FSP FAS 157-2 are effective for the
Company’s fiscal year beginning January 1, 2009.
 
 FAS 157
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy
under FAS 157 are described below:
  Level
      1
                    Unadjusted
      quoted prices in active markets that are accessible at the measurement
      date for identical, unrestricted assets or
  liabilities;
 
 Level
      2
                    Quoted
      prices in markets that are not active, or inputs that are observable,
      either directly or indirectly, for substantially the full term of the
      asset or liability;
 
 Level
      3
                    Prices
      or valuation techniques that require inputs that are both significant to
      the fair value measurement and unobservable (supported by little or no
      market activity).
  8
 The
following table sets forth the Company’s financial liabilities measured at fair
value by level within the fair value hierarchy. As required by FAS 157, assets
and liabilities are classified in their entirety based on the lowest level of
input that is significant to the fair value measurement. The Company designates
cash equivalents as Level 1. As of March 31, 2009 and December 31, 2008, the
Company did not have any cash equivalents, therefore there were no assets
measured at fair value.
 
 Fair
      Value at March 31, 2009Total
                            
                            
                            Level
      1
                            
                            
                            Level
      2
                            
                            
                            Level
      3Liabilities:Conversion
      option liability
                            
                            $
                            5,101
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            5,101
 
 The
Company’s conversion option liability is valued using pricing models and the
Company generally uses similar models to value similar instruments. Where
possible, the Company verifies the values produced by its pricing models to
market prices. Valuation models require a variety of inputs, including
contractual terms, market prices, yield curves, credit spreads, measures of
volatility, and correlations of such inputs. These financial liabilities do not
trade in liquid markets, and as such, model inputs cannot generally be verified
and do involve significant management judgment. Such instruments are typically
classified within Level 3 of the fair value hierarchy.
  The table
below sets forth a summary of changes in the fair value of the Company’s Level 3
financial liabilities (detachable warrants and conversion option liabilities)
for the three months ended March 31, 2009.
 
 Balance
      at beginning of period
                          
                          $
                          1,660Change
      in fair value of conversion option
                          
                          
                          3,441Balance
      at end of period
                          
                          $
                          5,101
 
 The total
amount of the changes in fair value for the period was included in net loss as a
result of changes in the Company’s stock price from December 31,
2008.
 
 In
February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities” (“FAS 159”). FAS 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value, with the objective of improving financial reporting by mitigating
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. The provisions of FAS 159 were adopted January 1, 2008. The Company
did not elect the Fair Value Option for any of its financial assets or
liabilities, and therefore, the adoption of FAS 159 had no impact on the
Company’s unaudited condensed consolidated financial position, results of
operations or cash flows.
 
 New
Accounting Pronouncements
 
 In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS
160 requires that non-controlling (or minority) interests in subsidiaries be
reported in the equity section of the company’s balance sheet, rather than in a
mezzanine section of the balance sheet between liabilities and equity. SFAS 160
also changes the manner in which the net income of the subsidiary is reported
and disclosed in the controlling company’s income statement. SFAS 160 also
establishes guidelines for accounting or changes in ownership percentages and
for deconsolidation. SFAS 160 is effective for financial statements for fiscal
years beginning on or after December 15, 2008 and interim periods within those
years. The adoption of SFAS 160 did not have a material impact on our
consolidated financial position, results of operations or cash
flows.
  In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities-an amendment of FASB Statement No. 133” (SFAS 161). SFAS
161 requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting. SFAS
161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early application encouraged.
The adoption of SFAS 161 did not have a material impact on our consolidated
financial position, results of operations or cash flows.
  In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  This Statement will not have
an impact on the Company’s financial statements.
 
 In June
2008, the FASB issued Emerging Issues Task Force No. 07-5 (EITF 07-5), Determining
Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own
Stock. EITF 07-5 requires entities to evaluate whether an equity-linked
financial instrument (or embedded feature) is indexed to its own stock by
assessing the instrument’s contingent exercise provisions and settlement
provisions. Instruments not indexed to their own stock fail to meet the scope
exception of Statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities, paragraph 11(a), and
should be classified as a liability and marked-to-market. The statement is
effective for fiscal years beginning after December 15, 2008 and is to be
applied to outstanding instruments upon adoption with the cumulative effect of
the change in accounting principle recognized as an adjustment to the opening
balance of retained earnings. The adoption of this pronouncement will not have a
significant impact on the Company’s consolidated financial position and results
of operations.
 
 In
January 2009, the FASB issued Financial Statement of Position (“FSP”) Issue No.
EITF No. 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No.
99-20” (“FSP EITF No. 99-20-1”). FSP EITF No. 99-20-1 amends the impairment
guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment
on Purchased Beneficial Interests and Beneficial Interests that Continue to be
Held by a Transferor in Securitized Financial Assets” to achieve more consistent
determination of whether an other-than-temporary impairment has occurred. The
Company adopted FSP EITF No. 99-20-1 and it did not have a material impact on
the consolidated financial statements.
  9
  Effective
January 1, 2009, the Company adopted the Financial Accounting Standards Board's
Staff Position (FSP) on the Emerging Issues Task Force (EITF) Issue No. 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities.”  The FSP required that all unvested
share-based payment awards that contain non-forfeitable rights to dividends
should be included in the basic Earnings Per Share (EPS)
calculation.  This standard did not affect the unaudited condensed
consolidated financial position or results of operations.
  In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments” (“FSP FAS No. 115-2”). FSP FAS
No. 115-2 provides guidance in determining whether impairments in debt
securities are other than temporary, and modifies the presentation and
disclosures surrounding such instruments. This FSP is effective for interim
periods ending after June 15, 2009, but early adoption is permitted for interim
periods ending after March 15, 2009. The Company plans to adopt the provisions
of this Staff Position during the second quarter of 2009, but does not believe
this guidance will have a significant impact on its unaudited condensed
consolidated financial statements.
  In April
2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly” (“FSP FAS No. 157-4”). FSP
FAS No. 157-4 provides additional guidance in determining whether the market for
a financial asset is not active and a transaction is not distressed for fair
value measurement purposes as defined in SFAS No. 157, “Fair Value
Measurements.” FSP FAS No. 157-4 is effective for interim periods ending after
June 15, 2009, but early adoption is permitted for interim periods ending after
March 15, 2009. The Company will apply the provisions of this statement
prospectively beginning with the second quarter 2009, and does not expect its
adoption to have a material effect on its unaudited
condensed  consolidated financial statements.
  In April
2009, the FASB issued FSP FAS No. 107-1 and APB 28-1, “Interim Disclosures about
Fair Value of Financial Instruments” (“FSP FAS No. 107-1 and APB 28-1”). This
FSP amends FASB Statement No. 107, “Disclosures about Fair Values of Financial
Instruments,” to require disclosures about fair value of financial instruments
in interim financial statements as well as in annual financial statements. APB
28-1 also amends APB Opinion No. 28, “Interim Financial Reporting,” to require
those disclosures in all interim financial statements. This standard is
effective for interim periods ending after June 15, 2009, but early adoption is
permitted for interim periods ending after March 15, 2009. The Company plans to
adopt FSP FAS No. 107-1 and APB 28-1 and provide the additional disclosure
requirements beginning in second quarter 2009.
 
 Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not, or are not believed by
management to, have a material impact on the Company's present or future
unaudited condensed consolidated financial statements.
 
 NOTE
3 - GOING CONCERN
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets
and the settlement of liabilities and commitments in the normal course of
business. As reflected in the accompanying unaudited condensed consolidated
financial statements, the Company has a net loss of $742,790 for the three
months ended March 31, 2009, and a working capital deficiency of $6,097,372 and
a stockholders' deficiency of $6,094,306 at March 31, 2009. These factors raise
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company's
ability to raise additional funds and implement its business plan. The
accompanying unaudited condensed consolidated financial statements do not
include any adjustments that might be necessary if the Company is unable to
continue as a going concern.
 
 10
  The
Company is actively pursuing additional equity financing through discussions
with investment bankers and private investors. There can be no assurance the
Company will be successful in its effort to secure additional equity
financing.
 
 If
operations and cash flows continue to improve through these efforts, management
believes that the Company can continue to operate. However, no assurance can be
given that management's actions will result in profitable operations or the
resolution of its liquidity problems.
 
 The
Company's existence is dependent upon management's ability to develop profitable
operations and resolve its liquidity problems. Management anticipates the
Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its services and additional
equity investment in the Company.
 
 NOTE
4 - CONVERTIBLE DEBT
 
 Notes
payable at March 31, 2009 and December 31, 2008:
 March
      31,
                                
                                
                                December
      31,2009(unaudited)
                                
                                
                                2008Global
      Atomic Inc. demand note payable to related party at 10% per year,
      convertible into common stock at $1.00 per share
                                
                                $
                                4,000
                                
                                
                                $
                                4,000International
      Fission demand note payable to related party at 10% per year, convertible
      into common stock at $1.00 per share
                                
                                
                                15,000
                                
                                
                                
                                15,000Jackie
      Brown, demand note payable to related party, non -interest bearing,
      convertible into common stock at $1.00 per share
                                
                                
                                20,000
                                
                                
                                
                                20,000John
      Powers note payable to related party, convertible into common stock At a
      50% discount to market; interest rate 14%; maturity June 4,
      2009
                                
                                
                                13,444
                                
                                
                                
                                13,444John
      Powers note payable to related party, convertible into common stock At a
      50% discount to market; interest rate 14%; maturity June 4,
      2009
                                
                                
                                8,000
                                
                                
                                
                                8,000Total
      notes payable
                                
                                
                                60,444
                                
                                
                                
                                60,444Less:
      current portion
                                
                                
                                (60,444
                                )
                                
                                
                                (60,444
                                )Balance
      notes payable (long term portion)
                                
                                $
                                —
                                
                                
                                $
                                —
  
 11
 
 Item
      2.
                    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation
 
 When used
in this Form 10-Q and in our future filings with the Securities and Exchange
Commission, the words or phrases will likely result, management expects, or we
expect, will continue, is anticipated, estimated or similar expressions are
intended to identify forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Readers are cautioned not to
place undue reliance on any such forward-looking statements, each of which speak
only as of the date made. These statements are subject to risks and
uncertainties, some of which are described below. Actual results may differ
materially from historical earnings and those presently anticipated or
projected. We have no obligation to publicly release the result of any revisions
that may be made to any forward-looking statements to reflect anticipated events
or circumstances occurring after the date of such statements.
 
 Business
Overview
 
 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This
quarterly report on Form 10-Q contains many forward-looking statements, which
involve risks and uncertainties, such as our plans, objective, expectations and
intentions. You can identify these statements by our use of words such as "may,"
"expect," "believe," "anticipate," "intend," "could," "estimate," "continue,"
"plans," or other similar words or phrases. Some of these statements include
discussions regarding our future business strategy and our ability to generate
revenue, income, and cash flow. We wish to caution the reader that all
forward-looking statements contained in this Form 10-Q are only estimates and
predictions. Our actual results could differ materially from those anticipated
as a result of risk facing us or actual events differing from the assumptions
underlying such forward-looking statements. Readers are cautioned not to place
undue reliance on any forward-looking statements contained in this quarterly
report on Form 10-Q. Readers are cautioned not to place undue reliance on these
forward-looking statements. We undertake no obligation to update any of these
factors or to publicly announce any change to our forward-looking statements
made herein, whether as a result of new information, future events, changes in
expectations or otherwise.
 
 12
 
 
 Note:
There have been no material changes from our description of business disclosed
in our annual report on Form 10-K for the year ended December 31, 2008. The
information that follows is condensed and adapted from the information contained
in our annual report on form 10-K for the year ended December 31,
2008.
 
 Our
Corporate History:
 
 The
Company was organized February 27, 1997 under the laws of the State of Nevada,
as Stock Watch Man, Inc. an internet e-commerce company. On September 12, 2001,
the Company amended its articles of incorporation to change its name to Nuclear
Solutions, Inc. At that time, our primary business was the development of a new
type of nuclear reactor technology. As of the date of this report, our business
is now focused on the production of synthetic diesel fuel from coal
concentrating its efforts exclusively on coal-to-diesel projects already
underway in the state of Kentucky.
 
 Our
Business:
 
 Nuclear
Solutions, Inc. and its wholly owned subsidiary, Fuel Frontiers, Inc. is engaged
in the research, development, and commercialization of innovative technologies
and processes, which are generally early-stage, theoretical or commercially
unproven. We operate a highly technical business and our primary mission is to
develop facilities to produce ultra-clean synthetic diesel from coal and other
materials using a plasma-based gasification system and a conventional synthesis
gas-to-fuel reforming system based upon Fisher-Tropsch technology.
 
 In 2008,
The Board of Directors elected to focus the company exclusively on the
production of synthetic fuels through the FFI subsidiary. Prior to that, the
company was developing nuclear technologies in the areas of shielded nuclear
material detection and nuclear micro-batteries in addition to the production of
synthetic fuels. Due to the difficulties encountered in raising capital in a
declining economic climate coupled with the limited resources of the company,
management made the decision to place all nuclear technology development
programs into a dormant state.  The company will continue to maintain
the intellectual property associated with the shielded nuclear detection
technology program and will seek a buyer or a master licensee for the
patents.  The company is discontinuing all further business
development associated with nuclear micro battery technology and other nuclear
legacy technologies.
 
 Production of Ultra-Clean
Synthetic Fuels through our subsidiary Fuel Frontiers, Inc.
 
 In 2005,
the company entered the ultra-clean synthetic fuels business through a new
subsidiary called Fuel Frontiers, Inc. (formerly known as Future Fuels, Inc.).
The primary business of Fuel Frontiers, Inc. (FFI) is to plan, design, finance,
construct, and operate multiple gas-to-liquid synthetic fuel synthesis
facilities worldwide to transform virtually cost-free waste materials such as
used tires, waste coal, solid and liquid municipal wastes, biomass, and other
similar low-value societal refuse into high-value gas-to-liquid fuels such as
ultra-clean diesel.
 
 Fuel
Frontiers, Inc. (FFI) is focused on the production of ultra-clean GTL Diesel
fuel.
 Management
made a decision to concentrate on the market for ultra-clean GTL Diesel fuel due
to the maturity and stability of the diesel market place and the greater
certainties associated with distribution, integration, production costs and
profit margins.
 
 Originally,
our approach to the production of ultra-clean synthetic fuel was highly focused
on the utilization of virtually cost free waste materials as feedstock for our
process.
 
 We
believe our approach to the production of ultra-clean synthetic fuels is
differentiated by our business model and technical approach. Our business model
focuses on the flexibility to use virtually cost free waste materials, some of
which are renewable, in combination with conventional feed stocks such as coal
or petroleum coke, as opposed to other approaches which must lock in a certain
type of homogeneous feedstock. Our technical approach involves the use of a
low-emission plasma processing (gasification) system to convert the waste
materials into synthesis gas which is then converted into ultra-clean synthetic
diesel.
 
 13
 
 System
Overview
 
 The FFI
approach for the production of ultra-clean diesel occurs in two stages. In the
first stage the feedstock material is fed into a plasma processing system such
as the Westinghouse Plasma Gasifier (WPG) which transforms the feedstock
material into synthesis gas, which is composed of carbon, hydrogen and oxygen.
The heart of Westinghouse’s Plasma Gasifier contains a plasma field that reaches
temperatures up to 30,000 degrees Centigrade. The plasma breaks down feedstock
materials--such as coal, used tires, wood wastes as well as petroleum coke and
other materials--to their core elements in a clean and efficient manner which
generates significant amounts of synthesis gas. Excess heat energy is removed
from the resulting synthesis gas and recovered to generate electricity on-site
which can be used to provide power to the system. The cooled synthesis gas is
then refined for purity and passed to the second stage. In the second stage, the
refined synthesis gas, which is composed primarily of carbon, hydrogen and
oxygen, is converted into ultra-clean diesel though a modified Fischer-Tropsch
gas-to-liquids synthesis process for diesel fuels. The process applies a
metallic catalyst to chemically transform the synthesis gas into a liquid fuel
which is then refined to fuel-grade standards. This approach is not entirely
new, as early as 1936 in Germany similar technology was used with coal-produced
synthesis gas to produce diesel and alcohols on a commercial scale. The FFI
approach to ultra-clean synthetic fuel production differs from other approaches
mainly because our system can utilize multiple feedstock materials that are
normally difficult to utilize in a conventional gasifier. The ability to use
heterogeneous materials is a benefit of a plasma processing system. The
Westinghouse Plasma Gasifier has the proven capability to transform a wide
variety of waste materials into the synthesis gas in an efficient and
environmentally friendly manner.
 
 Currently,
we are focusing our efforts in the state of Kentucky, Muhlenberg County for our
first coal to ultra-clean diesel production facility. The projected output of a
typical project can range from approximately 50,000,000 gallons per year to
200,000,000 gallons per year. We currently estimate that the inside battery
limits cost of an ultra-clean synthetic diesel waste-to-fuel facility producing
approximately 50,000,000 gallons per year could range from $300,000,000 to
$400,000,000. This estimate range is qualified by the fact that the actual cost
of any facility can be significantly affected by factors such as the exact
nature and terms of the project, the market price for engineering, labor and raw
construction materials and any environmental or regulatory costs which are
highly project dependent. We will require additional capital to develop these
projects. Over the next twelve months, we anticipate raising additional capital
through debt, grants or equity financing. The financing requirements for each
project can be substantially different from one another and may or may not
result in significant dilution and or increased indebtedness of the
company.
 
 We intend
to build our facilities with modular expansion capability to allow for increased
future production and/or gasification of additional or diverse feedstock (waste
materials). As of the date of this report, we have retained Stone and Webster,
LTD. Of Milton Keynes, England, a subsidiary of the Shaw Group for design
engineering, procurement, construction, and production operations for our
renewable fuel projects currently in the planning stages. As a matter of policy
and our business model, we intend to outsource engineering, procurement,
construction as well as daily facility management and operations of any future
facilities to qualified and experienced providers.
 
 Over the
next twelve months, we anticipate that FFI's development efforts will continue
to focus on engineering plant designs as well as project development and
financing. These elements will play critical roles in the establishment of FFI's
waste-to-fuel projects. While we believe that the appropriate technologies for
waste-to-synthetic fuels such as ultra-clean diesel are commercially available,
there is, however, no guarantee that commercially available technologies will be
appropriate in every instance for the production of fuels and any of FFI's
proposed facilities. Moreover, there could be unexpected problems or delays in
the funding, construction and operation of the facility. There is no guarantee
that FFI will be successful in raising the capital required for this project.
Over the next twelve months we anticipate that FFI will require a minimum of
approximately $500,000 to sustain operations. We anticipate raising this money
through debt and/or equity financing which may result in substantial dilution,
and/or increase the company's indebtedness.
 
 14
 
 Plan for the next 12
months
 
 Over the
next 12 months, we plan on raising working capital to fund development of these
technological areas through private placements of debt or equity, using our
common stock in lieu of cash, and applying for government grants, where
appropriate. The implementation of Company's business development phases
outlined above will be dependent on successful financing. Financing options may
include a combination of debt and equity financing. Equity financing may result
in a substantial equity dilution to existing shareholders.
  Within
the next six months and subject to available resources, the company anticipates
holding one or more special shareholder meetings to refer certain matters to the
shareholders for approval and resolution.
 Progress
 
 Progress
in the development of our technologies have been slower than expected due to the
lack of personnel and lack of working capital. We anticipate increasing staffing
levels over the next 12 months. We estimate a working capital requirement of at
least $500,000 dollars over the next 12 months to maintain operations at a
minimum level.
 
 We
believe that the success of our business will depend, in part, on our ability to
attract, retain, and motivate highly qualified sales, technical and management
personnel, and upon the continued service of our senior management and key sales
and technical personnel. We cannot assure you that we will be able to
successfully attract, retain, and motivate a sufficient number of qualified
personnel to conduct our business in the future.
 
 
 Results
of Operations
 
 REVENUES:
The Company reported revenues of $0 for the three months ended March 31, 2008 as
compared with revenues from continuing operations of $0 for the three months
ended March 31, 2009.
 
 TOTAL
COSTS AND EXPENSES: Total costs and expenses from continuing operations
decreased from $1,002,815 for the three months ended March 31, 2008 to $736,458
for the three months ended March 31, 2009. The principal reason for this
decrease was due to a reduction in consulting fees.
 
 OPERATING
EXPENSES: Operating expenses from continuing operations decreased from
$1,002,815 for the three months ended March 31, 2008 to $736,458 for the three
months ended March 31, 2009. This decrease was primarily due to a decrease in
consulting fees. Depreciation expense decreased for the first three months of
2009 versus the first three months of 2008, from $1,229 for the three months
ended March 31, 2008 to $371, for the three months ended March 31, 2009. This
decrease was due to writing off certain assets.
 
 GENERAL
AND ADMINISTRATIVE: General & Administrative expenses increased by $116,717
during the three months ended March 31, 2009 to a total amount of $192,502 as
compared to $75,785 for the three months ended March 31, 2008. The increase was
due to project development costs associated with Fuel Frontiers,
Inc.
  INTEREST
EXPENSE: Interest expense decreased from $252,599 for the three months ended
March 31, 2008 to $2,891 for the three months ended March 31, 2009. This
decrease is due primarily to the company’s prior repayment of outstanding
debt.
 15
 
 NET LOSS:
The Company incurred a net loss of ($742,790) for the three months ended March
31, 2009, compared with a net loss of ($1,257,579) for the three months ended
March 31, 2008, which reflects a year-to-year decrease in the amount of loss for
the period of $514,789. The principal reason for this decrease was due to a
decrease in consulting expenses.
 
 LIQUIDITY
AND CAPITAL RESOURCES:
 
 As of
March 31, 2009, we had a working capital deficit of $6,097,372 which compares to
a working capital deficit of $5,557,940 as of December 31, 2008. As a
result of our operating losses for the three month period ended March 31,
2009, we generated a cash flow deficit of $169,227 from operating activities.
Cash flows used in investing activities was $0 during the period. Cash flows
provided by financing activities were $9,950 on proceeds from an advance
payable.
 
 Additional
financing will be required in order to meet our current and projected cash flow
deficits from operations and development. We are seeking financing in the form
of equity capital in order to provide the necessary working capital. There is no
guarantee that we will be successful in raising the funds required. We intend to
use the proceeds derived from revenues or financing to pay salaries, and general
and administrative expenses to maintain the core operations of the
company.
 
 If we are
not successful in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to us, this could have a
material adverse effect on our business, results of operations liquidity and
financial condition.
 
 New
Accounting Pronouncements
  In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS
160 requires that non-controlling (or minority) interests in subsidiaries be
reported in the equity section of the company’s balance sheet, rather than in a
mezzanine section of the balance sheet between liabilities and equity. SFAS 160
also changes the manner in which the net income of the subsidiary is reported
and disclosed in the controlling company’s income statement. SFAS 160 also
establishes guidelines for accounting or changes in ownership percentages and
for de-consolidation. SFAS 160 is effective for financial statements for fiscal
years beginning on or after December 15, 2008 and interim periods within those
years. The adoption of SFAS 160 did not have a material impact on our financial
position, results of operations or cash flows.
 
 Effective
January 1, 2009, the Company adopted the Financial Accounting Standards Board's
Staff Position (FSP) on the Emerging Issues Task Force (EITF) Issue No. 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities.”  The FSP required that all unvested
share-based payment awards that contain non-forfeitable rights to dividends
should be included in the basic Earnings Per Share (EPS)
calculation.  This standard did not affect the unaudited condensed
consolidated financial position or results of operations.
 
 In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments” (“FSP FAS No. 115-2”). FSP FAS
No. 115-2 provides guidance in determining whether impairments in debt
securities are other than temporary, and modifies the presentation and
disclosures surrounding such instruments. This FSP is effective for interim
periods ending after June 15, 2009, but early adoption is permitted for interim
periods ending after March 15, 2009. The Company plans to adopt the provisions
of this Staff Position during the second quarter of 2009, but does not believe
this guidance will have a significant impact on its unaudited condensed
consolidated financial statements.
 
 In April
2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly” (“FSP FAS No. 157-4”). FSP
FAS No. 157-4 provides additional guidance in determining whether the market for
a financial asset is not active and a transaction is not distressed for fair
value measurement purposes as defined in SFAS No. 157, “Fair Value
Measurements.” FSP FAS No. 157-4 is effective for interim periods ending after
June 15, 2009, but early adoption is permitted for interim periods ending after
March 15, 2009. The Company will apply the provisions of this statement
prospectively beginning with the second quarter 2009, and does not expect its
adoption to have a material effect on its unaudited
condensed  consolidated financial statements.
 
 In April
2009, the FASB issued FSP FAS No. 107-1 and APB 28-1, “Interim Disclosures about
Fair Value of Financial Instruments” (“FSP FAS No. 107-1 and APB 28-1”). This
FSP amends FASB Statement No. 107, “Disclosures about Fair Values of Financial
Instruments,” to require disclosures about fair value of financial instruments
in interim financial statements as well as in annual financial statements. APB
28-1 also amends APB Opinion No. 28, “Interim Financial Reporting,” to require
those disclosures in all interim financial statements. This standard is
effective for interim periods ending after June 15, 2009, but early adoption is
permitted for interim periods ending after March 15, 2009. The Company plans to
adopt FSP FAS No. 107-1 and APB 28-1 and provide the additional disclosure
requirements beginning in second quarter 2009.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities,” which changes the disclosure requirements for
derivative instruments and hedging activities. SFAS No. 161 requires enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS No.
133, “Accounting for Derivative Instruments and Hedging Activities” and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  This Statement will not have
an impact on the Company’s financial statements.
 
 In June
2008, the FASB issued Emerging Issues Task Force No. 07-5 (EITF 07-5), Determining
Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own
Stock. EITF 07-5 requires entities to evaluate whether an equity-linked
financial instrument (or embedded feature) is indexed to its own stock by
assessing the instrument’s contingent exercise provisions and settlement
provisions. Instruments not indexed to their own stock fail to meet the scope
exception of Statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities, paragraph 11(a), and
should be classified as a liability and marked-to-market. The statement is
effective for fiscal years beginning after December 15, 2008 and is to be
applied to outstanding instruments upon adoption with the cumulative effect of
the change in accounting principle recognized as an adjustment to the opening
balance of retained earnings. The adoption of this pronouncement will not have a
significant impact on the Company’s consolidated financial position and results
of operations.
 
 In
January 2009, the FASB issued Financial Statement of Position (“FSP”) Issue No.
EITF No. 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No.
99-20” (“FSP EITF No. 99-20-1”). FSP EITF No. 99-20-1 amends the impairment
guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment
on Purchased Beneficial Interests and Beneficial Interests that Continue to be
Held by a Transferor in Securitized Financial Assets” to achieve more consistent
determination of whether an other-than-temporary impairment has occurred. The
Company adopted FSP EITF No. 99-20-1 and it did not have a material impact on
the consolidated financial statements.
 
 Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not, or are not believed by
management to, have a material impact on the Company's present or future
unaudited condensed consolidated financial statements.
 
 16
  Item
      3.
                      Quantitative
      and Qualitative Disclosures About Market
Risk
 
 Cash and
Cash Equivalents
 
 We have
historically invested our cash and cash equivalents in short-term, fixed rate,
highly rated and highly liquid instruments which are reinvested when they mature
throughout the year. Although our existing investments are not considered at
risk with respect to changes in interest rates or markets for these instruments,
our rate of return on short-term investments could be affected at the time of
reinvestment as a result of intervening events. As of March 31, 2009, we had
cash and cash equivalents aggregated $17,002.
 
 The
Company does not issue or invest in financial instruments or their derivatives
for trading or speculative purposes.  The operations of the Company
are conducted primarily in the United States, and, are not subject to material
foreign currency exchange risk. Although the Company has outstanding debt and
related interest expense, market risk of interest rate exposure in the United
States is currently not material.
  Debt
 
 The
interest rate on our outstanding debt obligations are fixed and are not subject
to market fluctuations. Some of our convertible debt may have its interest costs
increased if the debt is converted into common stock because the conversion
price is a function of the market price of our common stock.
 
 Item
      4.
                    Controls
      and Procedures.
 
 Evaluation of Disclosure
Controls and Procedures
 
 We
maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) that are designed to be effective in providing reasonable assurance that
information required to be disclosed in our reports under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission (the “ SEC”),
and that such information is accumulated and communicated to our management to
allow timely decisions regarding required disclosure.
 
 In
designing and evaluating disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable, not absolute assurance of achieving the
desired objectives. Also, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty and that breakdowns can occur because of simple error or mistake. The
design of any system of controls is based, in part, upon certain assumptions
about the likelihood of future events and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions.
 
 As of the
end of the period covered by this report, we carried out an evaluation, under
the supervision and with the participation of management, including our chief
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based upon that
evaluation, management concluded that our disclosure controls and procedures are
effective as of March 31, 2009 to cause the information required to be disclosed
by us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods prescribed by SEC,
and that such information is accumulated and communicated to management,
including our chief executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.
 
 Evaluation of and Report on
Internal Control over Financial Reporting
 
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting of the Company. Management, with the participation of our
principal executive officer and principal financial officer, has evaluated the
effectiveness of our internal control over financial reporting as of March 31,
2009 based on the criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that, as of March 31,
2009, our internal control over financial reporting were effective in providing
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.
 
 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
SEC that permit the company to provide only management's report in this annual
report.
 
 
 17
 
 
 Changes in Internal Control
over Financial Reporting
 
 There was
no change in our internal controls over financial reporting identified in
connection with the requisite evaluation that occurred during our last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
 
 Limitations.
 
 Our
management, including our Principal Executive Officer and Principal Financial
Officer, does not expect that our disclosure controls or internal controls over
financial reporting will prevent all errors or all instances of fraud. A control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system's objectives will be met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and any design may not succeed in achieving its
stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures. Because of the inherent
limitation of a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.
 
 PART
II-OTHER INFORMATION
 
 Item
      1.
                    Legal
      Proceedings.
 
 The
Company is not a party to any pending material legal proceedings.
 
 Item
      1A.
                    Risk
      Factors
 
 There
have been no material changes from risk factors disclosed in our annual report
on Form 10-K for the year ended December 31, 2008.
 
 Item 2.
                    Unregistered Sale of Equity
      Securities and Use of Proceeds.   None.
 
 Item 3.
                    Defaults upon Senior
      Securities.None.
 
 Item
      4.
                    Submission
      of Matters to a Vote of Security
Holders.
 
 No matter was submitted to a vote of
the security holders, through the solicitation of proxies or otherwise, during
the quarter of the fiscal year covered by this report.
 
 Item 5.
                    Other
      Information.None.
 
 Item
      6.
                    Exhibits
 
 (a)
Exhibits
 Exhibit
      No.
                    Description31.1
                    Chief
      Executive Officer-Section 302 Certification pursuant to Sarbanes-Oxley
      Act.31.2
                    Chief
      Financial Officer-Section 302 Certification pursuant to Sarbanes-Oxley
      Act.32.1
                    Chief
      Executive Officer-Section 906 Certification pursuant to Sarbanes-Oxley
      Act.32.2
                    Chief
      Financial Officer-Section 906 Certification pursuant to Sarbanes-Oxley
      Act.
 
 18
  SIGNATURES
 
 In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 Dated
:  May 20, 2009
 
 NUCLEAR
SOLUTIONS, INC.
  By:
/s/Patrick
Herda           By:
/s/Kenneth Faith
 -----------------                     
   -------------------
 Patrick
Herda                        Kenneth
Faith
 Title: President,
CEO           Title:
CFO
 
  
 19