U.S.
      Securities and Exchange Commission


Washington,
      D.C. 20549





**FORM
      10-K**





(Mark
      One)


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


For
      the
      fiscal year ended December 31, 2007.


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., Ste. 191, Washington, D.C.
            
            20015(Address
                of principal executive offices)
            
            (Zip
                Code)





Issuer’s
      telephone number,( 202 ) 787 - 1951




Securities
      Registered Pursuant of Section 12(b) of the Act: None





Securities
      Registered Pursuant of Section 12(g) of the Act:


Common
      Stock, $0.0001 Par Value





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o No x





Indicate
      by check mark of the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Act. Yes o No x





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





Indicated
      by check mark if disclosure of delinquent filers in response to Item 405 of
      Regulation S-K (229.405)is not contained herein, and will not be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-K or any
      amendment of this Form 10-K. o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. 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





As
      of
      April 14, 2008, there were 84,799,946 shares of the issuer's common stock
      outstanding. The aggregate market value of the shares of the issuer's voting
      stock held by non-affiliates was $19,174,462 based the average of the bid and
      asked price as quoted on the OTC Electronic Bulletin Board on April 14, 2008.
      The sum excludes the shares held by officers, directors, and stockholders whose
      ownership exceeded 10% of the outstanding shares at April 14, 2008, in that
      such
      persons may be deemed affiliates of the Company. This determination of affiliate
      status is not necessarily a conclusive determination for other
      purposes.










Nuclear
      Solutions, Inc. and Subsidiaries


FORM
      10-K


December
      31, 2007





PART
                IITEM
                1.
            Description
                of Business
            2ITEM
                1A.
            Risk
                Factors
            11ITEM
                1B.
            Unresolved
                Staff Comments
            16ITEM
                2.
            Description
                of Properties
            16ITEM
                3.
            Legal
                Proceedings
            16ITEM
                4.
            Submission
                of Matters to Vote of Security Holders
            16PART
                IIITEM
                5.
            Market
                for Common Equity, Related Stockholder Matters and Issuer Purchases
                of
                Equity Securities
            16ITEM
                6.
            Selected
                Financial Data
            18ITEM
                7.
            Management's
                Discussion and Analysis or Plan of Operation
            18ITEM
                7A.
            Quantitative
                and Qualitative Disclosures About Market Risk
            21ITEM
                8.
            Financial
                Statements and Supplementary Data
            22ITEM
                9.
            Changes
                In and Disagreements With Accounting and Financial
                Disclosure
            22ITEM
                9A.
            Controls
                and Procedures
            22ITEM
                9B.
            Other
                Information
            23PART
                IIIITEM
                10.
            Directors,
                Executive Officers and Corporate Governance
            23ITEM
                11.
            Executive
                Compensation
            27ITEM
                12.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            28ITEM
                13.
            Certain
                Relationships and Related Transactions and Director
                Independence
            29ITEM
                14.
            Principal
                Accounting Fees and Services
            30PART
                IVITEM
                15.
            Exhibits
                and Financial Statement Schedules
            31SIGNATURES
            32


1





PART
      I





**Item
      1.**  **Description
      of Business.**





CAUTIONARY
      NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
      annual report on Form 10-K 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-K 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 Annual Report
      on Form 10-K. 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.





**Item
      1.**  **Description
      of Business.**





(a) 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. We are a development
      stage 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 and commercial product
      technologies for homeland security and defense, and nanotechnolology power
      applications.





(b) Business
      of the Issuer .





Our
      Business:





Nuclear
      Solutions, Inc. is engaged in the research, development, and commercialization
      of innovative product 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 advanced product technologies
      to
      address emerging market opportunities in the fields of homeland security,
      nanotechnology. The company is also engaged in the development of facilities
      to
      produce synthetic fuels from waste materials through its subsidiary Fuel
      Frontiers, Inc





Our
      business now operates in two distinct business segments. We operate a technology
      development business which is focused on developing advanced product
      technologies to address emerging market opportunities in the fields of homeland
      security, nanotechnology micro-battery power systems.





We
      are
      also developing a synthetic fuel production business which is focused on the
      production of ultraclean synthetic diesel from waste materials and traditional
      feed stocks such as coal using a plasma-based gasification system and a
      conventional synthesis gas to fuel reforming system based upon Fisher-Tropsch
      technology.





About
      Our
      Technology Development Business:





Please
      note: due to allocating significant resources to our synthetic fuels business
      in
      2007, we have primarily focused our technology development business to
      developing our intellectual property and maintaining it. We have not applied
      significant resources towards the marketing and sales of our weapon detection
      technologies or our nuclear micro-battery power technologies during 2007. The
      company operates this business by hiring technical expertise to develop
      innovative and emerging technologies that we believe have significant market
      potential. We strive to develop technologies identified as viable to the point
      that they may be licensed, joint-ventured or sold to an industrial or
      governmental entity, or otherwise commercialized. We do not maintain technical
      facilities or a laboratory of our own. Our business model is to utilize the
      technical facilities and capabilities of appropriate outside laboratories under
      contract to us when appropriate. By taking advantage of existing technology
      infrastructures, this preferred method of technology development reduces capital
      investment costs and the length of time required to develop technologies. This
      is especially important in light of the extensive requirements for the
      government approval and safe handling of nuclear materials. Any development
      efforts contemplated or planned that involve nuclear materials are intended
      to
      be carried out by an existing and already licensed scientific or technical
      facility through the establishment of a contractual relationship. This approach
      also mitigates the potential liability involved with the handling and use of
      nuclear materials. We have identified several facilities in the United States
      and abroad that have the capabilities we may require in the future. As an
      example, we may contract with or establish a teaming relationship with a U.S.
      national laboratory such as Los Alamos National Labs, Lawrence Livermore
      National Labs, or others that have a history and willingness to perform work
      under well-established contracting channels such as Cooperative Research and
      Development Agreements (CRADA) and Work for Others (WFO) agreements. Although
      we
      believe this is adequate for our development purposes and preferable in the
      case
      of nuclear material handling, we may choose to operate our own laboratory
      facility in the future, subject to available capital.


2





When
      a
      technology is deemed market ready, the company will offer it to potential
      customers for commercial licensing. As an example, after the successful
      prototype construction and operation of our shielded nuclear material detector,
      we will offer the sensor system to companies that have the appropriate
      experience to integrate the sensor into a working environment to meet the
      performance criteria as required by the end user. We do not intend to establish
      technology or product manufacturing operations of our own, nor do we intend
      to
      establish extensive marketing and distribution operations of our own except
      in
      the case of our subsidiaries that are involved in the production of synthetic
      fuels. Our business model as it relates to product technology development is
      centered on the sale and/or licensing of our technologies through strategic
      partnerships with companies that have established manufacturing, sales and
      marketing infrastructures. By way of example, companies that could be potential
      partners for our shielded nuclear material detection technology may be:
      Lockheed-Martin, General Atomics, Raytheon and other such companies. Currently
      we do not have any partnership agreements or material contracts with the
      aforementioned companies.




Our
      primary role, when developing a product technology, is to add value by initially
      developing and providing the enabling core intellectual property to our
      customers and partners. Typically, after licensing, we will remain involved
      as a
      consultant for the customer to ensure appropriate technology transfer to the
      customer and to assist with any improvements or modification that may be needed
      during the course of commercialization. This is a highly leveraged business
      model that is believed by management to offer the greatest advantages in terms
      of corporate flexibility, and reduced capital requirements compared to a
      traditional research and development operation. However, management is
      opportunistic and may consider adopting a production model if the right
      conditions are met. We will pursue all avenues that will lead to the
      commercialization of our technologies.





Since
      our
      business model is to establish partnerships during development and ultimately
      as
      production and marketing partners for our technologies, we are constantly
      looking for and evaluating potential strategic partners. We especially require
      partnerships to take advantage of the business opportunities available through
      government agencies such as the Homeland Security Advanced Projects Agency
      (HSARPA), The Defense Advanced Research Projects Agency (DARPA) and others.
      A
      partnering relationship with experienced companies that have a positive track
      record of providing products or services to the government agencies that are
      our
      potential customers in the related field will probably increase the likelihood
      that we could secure money from the government to develop one of our
      technologies for a specific government need.





The
      following is a general example of a technology development plan:





1.)
      A
      market opportunity is identified in an area of interest to us.


2.)
      A
      technical assessment of the opportunity and existing related technologies is
      performed with an appropriate combination of in-house and outside
      analysis.


3.)
      If
      the technical assessment indicates a viable market, research is performed to
      identify and define an appropriate technology.


4.)
      The
      technology identified in the previous step is reevaluated in light of the
      expected development costs and market opportunity. A decision is made to proceed
      with identified technology, suspend development, or research supplementary
      approaches.


5.)
      Intellectual property is secured through initiation of the patent process and/or
      identified technology is licensed. Selected technologies may be kept proprietary
      or trade secret.


6.)
      Selected technology is validated by an appropriate laboratory under
      contract.


7.)
      Once
      successfully validated, the technology is then marketed to appropriate entities
      for licensing or sale. Depending on the technology being developed, a strategic
      partnership arrangement may be consummated at many different points along the
      development track.


3





The
      company intends to commercialize our technologies through: strategic partners,
      joint-venture partners, licensees, and other customers who will carry out
      project implementation, manufacturing, end-user marketing activities, and
      deployment of our technologies. We intend to generate revenue from the
      licensure, sale, and other usage agreements associated with our
      technologies.





During
      2004, the company filed two U.S. patent applications for our (Tritiated Water
      Remediation)TWR technology that are currently pending; and to date. Furthermore,
      as time and resources allow, the company expects to file additional patent
      applications in 2007 for our TWR technology, Nuclear Weapons Detection
      Technology, and our Nuclear Micro Battery Technology.





On
      March
      15, 2005, we entered into a License Agreement with I.P. Technology Holding,
      Inc.(IPTH), a New Jersey corporation. We granted I.P. Technology a limited
      license for the right to the purchase and resell products based on our patent
      pending technology for the detection of shielded fissile nuclear materials
      to
      all non-federal police and fire agencies in the United States for the patent
      life of the technology.





Additionally,
      IPTH has the right to sub-license their rights under the terms of the license
      with the approval of the company. IPTH has agreed to pay Nuclear Solutions
      the
      sum of Nine Million Seven Hundred Thousand ($9,700,000) Dollars over a ten
      (10)
      year period, payable on a Bi-annual basis in the amount of $485,000 Dollars,
      or
      more, until paid in full. To the extent this technology is commercialized,
      we
      will be entitled to an Eight(8%) percent royalty payment on all I.P. Technology
      Holding gross revenue related to this technology. On January 10, 2006 we
      modified the March 15, 2005 licensing agreement with I.P. Technology Holding,
      Inc. Wherein license fees totaling $465,416 on December 31, 2005 were deferred
      until April 2006 and IPTH's payment schedule was changed to
      bi-annual.





During
      2001, the company's business efforts focused solely on the development of a
      new
      nuclear reactor system that was intended to remediate certain nuclear waste.
      The
      system was called the photo-nuclear reactor system and is discussed in depth
      in
      the company's prior annual reports. In 2004, after careful evaluation, we
      determined that it would be in the company's best interest to indefinitely
      suspend work on the photonuclear reactor technology and any related or
      derivative projects. We evaluated potential market demand in light of current
      economic conditions and redirection of government resources to improving
      homeland security and those appropriated for military expenditures. We concluded
      that until the economic situation improves greatly, and the threat of homeland
      terrorism is sufficiently mitigated, and the country is no longer on a wartime
      stance, a new type of nuclear reactor technology would be extremely difficult
      to
      fund, develop, and build. As of April 5, 2004, we sent notice to Global Atomics
      Licensing, Ltd.(GALL), the licensor of the technology, and unilaterally
      terminated the license agreement which was originally executed on September
      11,
      2001. Currently no royalties or commissions are due to GALL.





Beginning
      in 2004, based upon our evaluation, we refocused our business objectives in
      the
      previously mentioned areas of Homeland Security, specifically portable nuclear
      weapon and shielded nuclear material detection, Nanotechnology, specifically
      nuclear micro battery technology, and nuclear remediation, specifically
      Tritiated water processing. In 2005, the company also entered the field of
      alternative and renewable fuel production. 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.





Our
      significant assets include: Our portfolio of intellectual property which
      includes trade secrets and know-how in the areas of weapon detection via
      specific density detection (United States Patent 7,298,469 and other patents
      pending), detritiation of nuclear wastewater (patent Pending); and our license
      option agreement for micro battery technology covered by U.S. Patents Nos.
      6,118,204 and 6,238,812, and our fifteen-year land lease with Venture III
      Associates, renewable for up to 90 years, for an approximate six-acre site
      in
      Toms River, New Jersey.





NUCLEAR
      TECHNOLOGIES:





GRAVIMETRIC
      SHIELDED NUCLEAR MATERIAL/PORTABLE NUCLEAR WEAPON DETECTOR (Patented, U.S.P.
      #7,298,469 additional patents pending)





We
      are
      developing a new and unique technology to be integrated into a passive primary
      portal system that would screen trucks and shipping containers in real time
      for
      the presence of shielded nuclear weapons useable materials such as
      Uranium(U-235) and Plutonium (Pu-239).


4





The
      company is working on funding the prototype construction of a highly sensitive,
      portable, low cost, and ruggedized detection device that responds to minute
      gravitational gradient anomalies. These disturbances are produced by
      high-density nuclear materials such as Uranium and Plutonium. Unlike radiation,
      the force of gravity cannot be shielded and is a unique new concept for the
      detection of shielded nuclear weapons. The company is unaware of any other
      device with similar targeted performance and size.





This
      technology is protected by three pending patent applications. We filed our
      first
      patent application in October 2004. Subsequently we filed two additional patent
      applications in January 2005. On October 18, 2005 we filed for our first
      international patent on this technology via the Patent Cooperation Treaty (PCT).
      We expect further development work on the intellectual property relating to
      this
      technology and expect to file additional patents over the next twelve
      months.





On
      March
      15, 2005, we entered into a License Agreement with I.P. Technology Holding,
      Inc.(IPTH), a New Jersey corporation. We granted I.P. Technology a limited
      license for the right to the purchase and resell products based on our patent
      pending technology for the detection of shielded fissile nuclear materials
      to
      all non-federal police and fire agencies in the United States
      for the
      patent life of the technology.





Additionally,
      IPTH has the right to sub-license their rights under the terms of the license
      with the approval of the company. IPTH has agreed to pay Nuclear Solutions
      the
      sum of Nine Million Seven Hundred Thousand ($9,700,000) Dollars over a ten
      (10)
      year period, payable on a Bi-annual basis in the amount of $485,000 Dollars,
      or
      more, until paid in full. To the extent this technology is commercialized,
      we
      will be entitled to an Eight(8%) percent royalty payment on all I.P. Technology
      Holding gross revenue related to this technology. On January 10, 2006 we
      modified the March 15, 2005 licensing agreement with I.P. Technology Holding,
      Inc. Wherein license fees totaling $465,416 on December 31, 2005 were deferred
      until April 2006 and IPTH's payment schedule was changed to bi-annual.





Over
      the
      next 12 months, subject to available resources, our development plan for our
      gravimetric nuclear material detector is as follows:





-
      Continue development of the related intellectual property and file additional
      patent applications.





-
      Secure
      funding of approximately $500,000 to $1.5M through debt or equity instruments
      to
      fund this project.





-
      Secure
      a strategic commercial development partner.





-
      Build
      and demonstrate a proof-of principle prototype.





-
      Seek
      additional licensees.




-
      Seek a
      potential buyer for the technology.





MICRO-BATTERIES





This
      program is aimed at developing embeddable micro-batteries that can supply
      long-lasting power for computer chips, micro motors, remote sensors, implantable
      medical devices, and other defense and aerospace applications. This technology
      is also known as radioisotope micro power generation or RIMS (radioisotope
      micro
      power sources). The science of nanotechnology is the design of Electrical and
      mechanical systems smaller than the width of a human hair. The field of
      nanotechnology includes making functional microscopic mechanical devices like
      motors, gear systems, and pumps. This field also includes making electronic
      circuits on an atomic scale. An opportunity exists to address the problem of
      providing reliable power to these devices for a long period of time. As
      electronic circuits and nanomachines grow ever smaller, a problem is created
      by
      the fact that conventional batteries cannot shrink to the same size and still
      hold enough power for the device to function for a reasonable period of time.
      Our micro battery technology may solve this problem by drawing energy from
      an
      embedded radioactive isotope due to the fact that radioisotope batteries are
      known to have power densities up to 1,000 times greater than achievable with
      conventional chemical battery technology. In order to focus our limited
      resources more effectively, management has elected to suspend this program
      until
      further notice.


5


In
      November 2003, the Company entered into a licensing option agreement for three
      issued U.S. patents for nuclear micro-battery technology (Pat. Nos. 6,118,204;
      6,238,812) with Jackie Brown. The company purchased a one-year option to
      exclusively license the technology, with an additional six month first right
      of
      refusal, in exchange for 100,000 shares of our common stock. In January 2008,
      the company renewed its exclusive license option agreement with Jackie Brown
      in
      exchange for 300,000 shares of common stock and the payment of all patent
      maintenance fees for the patents subject to the license agreement. When the
      company does choose to exercise its rights under the licensing option agreement,
      we will execute a license royalty agreement for 7% of the after tax profits
      on
      the sale or licensure of the technology to be paid to Ms. Brown.





Our
      micro
      battery technology relies on the application of Tritiated amorphous silicon
      as a
      beta voltaic, thin-film, intrinsic energy conversion device. A beta voltaic
      battery is a radioisotope based battery that converts energy from beta particles
      released by a beta emitting source, such as tritium, into electrical power.
      Common semiconductor designs of beta voltaic batteries use a semiconductor
      p-n
      junction device that is either directly exposed to beta decay (Lucent
      Technologies, Betabatt) or is illuminated by photons created when betas strike
      a
      phosphor(Trace Photonics, Inc.). These common beta voltaic batteries suffer
      from
      technical problems in that the directly irradiated cells suffer material
      degradation of the p-n junction limiting the operating life to days while the
      photo conversion systems are indirect and limited by efficiency to less than
      1%.
      Furthermore, another limitation of conventional beta voltaic batteries and
      P-N
      junction devices is the self-absorption of beta energy in the source itself.
      In
      order to reduce the self-absorption of beta energy we incorporate the isotope
      into the lattice of a semiconductor.





Tritiated
      amorphous silicon is a novel thin film material where a suitable radioisotope
      is
      bonded with silicon in the amorphous network or adjacent to it. Thin-film
      contact potential Tritiated amorphous silicon cells have been built and
      operation verified by an independent laboratory.





We
      are
      aware of several types of radioisotope batteries in development by organizations
      such as Lucent, The University of Wisconsin, and Trace Photonics, Inc. and
      Betabatt, Inc. While we believe that our technology is superior due to higher
      resistance to degradation, our competitors have greater access to capital and
      resources.





The
      operation of our micro battery was proven by an independent lab. However, it
      is
      still considered a development stage technology. We cannot guarantee that this
      technology will receive any additional patents or that the technology can be
      successfully commercialized. Over the next 12 months, as resources allow we
      plan
      on raising capital in the amount of $500,000 to $1,000,000 to fund the
      development of our micro-battery technology. We anticipate raising the money
      to
      fund this project through a combination of debt and equity
      financing.




TRITIATED
      WATER REMEDIATION TECHNOLOGY (TWR) (Patents Pending)





We
      have
      identified a need in the nuclear industry for an inexpensive method for
      Tritiated water remediation by way of isotope separation. This is a method
      to
      reduce the volume of stored water contaminated with tritium, the radioactive
      isotope of hydrogen.





We
      are
      currently developing a Tritiated water remediation method using a combination
      of
      in-house and external expertise. Our TWR development program is aimed at
      developing a Tritiated water separation technology that can be transportable
      and
      modular or integrated directly into a nuclear power plant. The specific target
      market for this technology is tritium contaminated water (Tritiated
      water) produced as a by-product of nuclear complex activities. Data indicates
      the Unites States houses approximately Six billion gallons of Tritiated water
      with an additional 11 million gallons created annually. Countries such as Japan,
      the United Kingdom, France, and Germany also have this problem.





As
      of the
      date of this report, we anticipate the overall development cost not to exceed
      $500,000. However, since this is a development stage technology the final
      development cost may differ substantially from what we currently anticipate.
      We
      will need to raise additional money to fund this project. We intend to use
      debt,
      equity or a combination thereof to fund this project. There is no guarantee
      that
      we will be able to successfully raise the required funds for operations, or
      that
      such funds will be available on terms satisfactory to us. Any inability to
      raise
      additional funds would require that we significantly scale back our planned
      operations and would lengthen the period of time required to bring the
      technology to the marketplace.


6


During
      2004 we filed 2 patent applications with the United States Patent and Trademark
      Office to secure the rights to the tritium remediation technology and the
      technology is now patent pending. IN 2005 these patent applications published
      and are still pending. Additionally in 2005 we filed 2 international patent
      applications based on our previously filed U.S. Patent Applications. Over the
      next
      12 months we plan on developing this technology further and filing for
      additional patent protection. However, it is possible that we may choose not
      to
      file a patent application on the technology if it is determined to be contrary
      to the security interests of the United States. TWR technology is a development
      stage technology. We cannot guarantee that we will either receive any patents
      on
      the technology or that the technology can be successfully
      commercialized.





Over
      the
      next 12 months as resources allow we plan on raising capital in the amount
      of
      approximately $500,000 to fund the further development and proof-of-principal
      demonstration of our Tritiated water remediation technology. We anticipate
      raising the money to fund this project through a combination of debt and equity
      financing.





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 that with working capital of
      $2,250,000 dollars at least one of our technologies will be fully demonstrable
      and ready for commercial licensing within 18 months.





**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 ultraclean 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 natural gas or petroleum coke, as opposed to other approaches
      which must lock in a certain type of homogeneous feedstock such as natural
      gas
      or coal by themselves. Our technical approach involves the use of a low-emission
      plasma processing system to convert the waste materials into synthesis gas
      which
      is then converted into a liquid fuel.





Currently,
      we are focusing our efforts in the state of Kentucky, Muhlenberg County for
      our
      first coal to ultraclean diesel production facility. Over the next twelve
      months, we anticipate raising additional capital through debt, grants or equity
      financing to fund our development efforts in the state of Kentucky.





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.


7


**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 waste coal, used tires, wood wastes, raw sewage, municipal
      solid wastes, biomass, low-grade waste-coal, and other agricultural
      by-products--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
      waste 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.





Select
      Accomplishments to Date





Nuclear
      Solutions, Inc. concluded the legal formation of an independent subsidiary
      under
      the name Future Fuels, Inc. (FFI) on September 2, 2005. Subsequently on March
      31, 2006, the subsidiary's name was changed to Fuel Frontiers, Inc. (FFI) and
      the website at www.fuelfrontiers.com was launched.





On
      September 23, 2005, the company appointed John C. (Jack) Young, an officer
      of
      Nuclear Solutions, Inc., as president of FFI.





On
      November 3, 2005, FFI signed a land lease agreement with Venture III Associates,
      a New Jersey General Partnership, and a permit and feedstock agreement with
      Ocean County Recycling Center, Inc., a New Jersey corporation.





FFI
      entered into a fifteen-year land lease with Venture III Associates, renewable
      for up to 90 years, for an approximate six-acre site in Toms River, New Jersey
      to build a proposed 52 million gallon waste-to-fuel production facility in
      exchange for 1,000,000 shares of FFI common stock. When the facility commences
      operations FFI will pay Venture III $240,000 dollars annually in equal monthly
      installments, plus three (3%) percent of the net operating profit of the
      waste-to-fuel facility when the facility begins operations. The payment of
      the
      1,000,000 shares of FFI common stock was deferred by Venture III until
      groundbreaking occurs for the waste to fuel facility on said property.
      Originally, this project was intended to produce synthetic ethanol. As of the
      date of this report, we have placed this project on hold due to market
      conditions and community concerns.





The
      following information is included herein for reference purposes only: FFI
      entered into an exclusive feedstock agreement with Ocean County Recycling Center
      (OCRC) in which OCRC agreed to supply FFI with 117,000 to 165,000 tons per
      year
      of suitable feedstock materials for a proposed 52 million gallon waste-to-fuel
      production facility in Toms River, New Jersey in exchange for FFI converting
      the
      materials into synthesis gas. Additionally, FFI also agreed to pay approximately
      $14.00 per ton of oversized feedstock materials which shall not exceed 2% of
      the
      total yearly feedstock stream. The feedstock agreement also secures FFI access
      to pre-approved state and local environmental permits to operate the facility,
      pending standard building permits and procedural, final consent from necessary
      regulatory agencies, as well as the on-site, immediately available source of
      feedstock suitable for conversion into fuel.





On
      November 9, 2005, FFI received preliminary approval for $84 million in
      tax-exempt bond financing by the New Jersey Economic Development Authority.
      After the statutory ten-day review period by the Governor's office, the
      preliminary bond approval was fully executed and officially adopted by the
      state
      of New Jersey on December 5, 2005. The official resolution approval enables
      FFI
      to proceed with a number of due diligence steps-including the bond rating,
      underwriting, and placement process--necessary to secure the funds. The
      tax-exempt bonds will be used for the design, construction, and initial start-up
      operations of the first-of-its-kind 52 million gallon waste-to-fuel production
      facility located in New Jersey. As of the date of this report, the company
      no
      longer has plans to use bonds to finance this facility. Additionally, in 2007
      the company terminated its relationship with Bear Stearns & Co.





In
      2007,
      FFI and Connecticut-based Startech Environmental Corporation have mutually
      terminated their global strategic alliance to utilize startech plasma
      gasification systems, which was originally entered into on March 13, 2006.


8





On
      March
      28, 2006, Fred Frisco joined the FFI team to assist with worldwide investor
      relations.





On
      April
      4, 2006, FFI retained the consulting services of alternative fuel expert Douglas
      A. Durante to provide information and data about the alternative fuel industry
      and advise us on the challenges and opportunities we face as we develop and
      pursue options for entering and supplying this market.





In
      2007,
      we paid $100,000 to Westinghouse Plasma Corporation (WPC) for engineering
      services related to the design engineering of a Westinghouse Plasma Gasification
      system intended for an FFI synthetic diesel facility.





In
      February 2008, FFI paid Shaw Stone & Webster (Shaw), a division of The Shaw
      Group Inc., for engineering services that will provide a technical basis for
      a
      400 Tonne per day Coal-To-Liquid (CTL) Ultra-Clean Diesel fuel production
      facility in Muhlenberg County, Kentucky.





As
      of the
      date of this report, the FFI team is currently focusing on developing coal
      to
      ultraclean diesel fuel projects primarily in the state of Kentucky. The
      projected output of the projects can range from 50,000,000 gallons per year
      to
      200,000,000 gallons per year. These projects are not yet fully developed; as
      each project matures management intends to fully disclose project details as
      appropriate. 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 $155,000,000 to $225,000,000.
      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 some of these projects. We anticipate
      financing these projects through a combination of debt and equity. 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.





Development
      Agreement and Amendments:





In
      2007,
      Kentucky fuel Associates agreed to pay Fuel Frontiers, Inc. $2,000,000 per
      facility as associated with a Development Agreement between FFI and Kentucky
      Fuel Associates, Inc. (herein, KFA) which was originally signed on July 30,
      2007
      and subsequently amended twice.





The
      purpose of the Development Agreement is to initially explore development
      opportunities for a coal-to-gas-to-liquid fuels (CTL) production facility in
      the
      State of Kentucky. FFI has focused corporate efforts in the area of CTL
      production technologies. KFA has expertise and business relationships in
      Kentucky which may compliment FFIs CTL efforts.





FFI
      has
      granted KFA the exclusive right to locate and develop CTL production projects
      in
      the State of Kentucky and the non-exclusive right to perform the same functions
      throughout the United States. KFA will also have the right to match any third
      parties proposals for CTL production projects in the United States, subject
      to
      FFIs approval.





In
      consideration of the Development Agreement and for each site located by KFA
      and
      accepted by FFI for development, FFI has agreed to pay KFA Seven (7%) percent
      of
      the net pre-tax income for each CTL production facility for the life of each
      facility. Additionally, in consideration for KFAs $2,000,000 funding, FFI will
      grant KFA a two and one-half (2.5%) percent equity interest in the first CTL
      facility developed by KFA.





The
      Development Agreement has a ten (10) year term and is renewable, at the election
      of the parties, for an additional five (5) year term. The Agreement may be
      terminated for a breach of any material provision which remains uncured for
      more
      than ninety (90) days following written notice of the breach.


In our
          Quarterly Report on Form 10-Q for the period ending September 30, 2007, under
          Item 5, titled “Other Information”, we disclosed that Nuclear Solutions had
          received $200,000
          as a partial
          payment associated with a Development Agreement with Kentucky Fuel Associates,
          Inc. (“KFA”) The
          Company received a deposit from KFA for the $200,000 however, the funds
          were
          dishonored. To
          date,
          KFA has not delivered good funds on this Development
          Agreement. KFA has
          indicated that they are working to rectify the situation as soon as possible
          and
          management has deferred the receipt of these funds pending further discussions
          and progress in this matter.
  9




Competition
        in the fields in which the company is endeavoring is complex. During 2007,
        we
        generated limited revenues and we are competing against companies that have
        significantly greater financial, technical, political and human resources.
        We
        are competing with national laboratories, universities, and established
        corporations, such as Lockheed-Martin, General Atomics, and Raytheon among
        other
        similar companies. There are well-established organizations within our business
        segments that have both name recognition and histories of implemented
        technologies. In nuclear-related businesses, the competitive field is relatively
        small but intense and can raise significant barriers to entry. Competition
        usually stems from name recognition, price, marketing resources, and expertise.
        Although we have retained marketing and consulting expertise, established
        competitors could enter the market with new, competing technologies at any
        time.
        Our ability to complete will depend on the capabilities of the market-ready
        technologies and how well we will be able to market these technologies.
        Additional methods of competition include prior track record of competing
        for
        government contracts and experience, greater access to scientific and technical
        personnel, greater access to capital, greater access to technical facilities,
        and name or brand establishment.


Competition
      in the alternative and synthetic fuel marketplace is developing. We have
      identified Range Fuels, Inc. of Colorado as developing a similar approach to
      the
      production of ethanol using wood wastes which are converted in to syngas and
      subsequently into ethanol. We believe their approach differs from ours in the
      way their syngas is produced and in the variety of simultaneous feed materials
      that can be processed.





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 through the underwriting of the bond
      authorization for which it has been approved. 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 or may not result in substantial dilution, and/or increase
      the company's indebtedness.





For
      the
      year ended December 31, 2007, we have relied on the services of outside
      consultants for services and currently have one full time employee. In order
      for
      us to attract and retain quality personnel, we anticipate we will have to offer
      competitive salaries to future employees. We do anticipate our employment base
      will increase to approximately 5 full time employees during the next 12 months.
      The successful development of any of our current projects would necessitate
      that


we
      would
      incur additional cost for personnel. This projected increase in personnel is
      dependent upon our generating revenues and obtaining sources of financing.
      There
      is no guarantee that we will be successful in raising the funds required or
      generating revenues sufficient to fund the projected increase in the number
      of
      employees.





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
          have
          two executive officers. Patrick Herda is the President and Chief Executive
          Officer. Kenneth Faith, Chief Financial and Principle accounting officer.
          Jack
          Young is the president of our subsidiary Fuel Frontiers, Inc. In addition
          to the
          named officers, we retain the following independent contractors and consultants:
          2- technical and scientific, 5-business consultants, 1-lobbyist, 4-legal,
          and
          2-administrative. Our employees are currently not represented by a collective
          bargaining agreement, and we believe that our relations with our employees
          are
          good. 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.
 
  10





**Item
      1A.**  **Risk
      Factors.**





*The
      Company is subject to a high degree of risk. The following risks, if any one
      or
      more occurs, could materially harm the business, financial condition or future
      results of operations of the Company. If that occurs, the trading price of
      the
      Company’s common stock could decline.*




Cautionary
      Factors that may Affect Future Results





We
      provide the following cautionary discussion of risks, uncertainties and possible
      inaccurate assumptions relevant to our business and our products. These are
      factors that we think could cause our actual results to differ materially from
      expected results. Other factors besides those listed here could adversely affect
      us.





Trends,
      Risks and Uncertainties





The
      Company has sought to identify what it believes to be the most significant
      risks
      to its business as discussed in "Risk Factors" above, but cannot predict whether
      or not or to what extent any of such risks may be realized nor can there be
      any
      assurances that the Company has identified all possible risks that might arise.
      Investors should carefully consider all of such risk factors before making
      an
      investment decision with respect to the Company's common stock.





Limited
      operating history; anticipated losses; uncertainly of future
      results





The
      Company has only a limited operating history upon which an evaluation of the
      Company and its prospects can be based. The Company’s prospects must be
      evaluated with a view to the risks encountered by a company in an early stage
      of
      development, particularly in light of the uncertainties relating to the business
      model that the Company intends to market and the potential acceptance of the
      Company’s business model. The Company will be incurring costs to develop,
      introduce and enhance its products, to establish marketing relationships, to
      acquire and develop products that will complement each other, and to build
      an
      administrative organization. To the extent that such expenses are not
      subsequently followed by commensurate revenues, the Company's business, results
      of operations and financial condition will be materially adversely affected.
      There can be no assurance that the Company will be able to generate sufficient
      revenues from the sale of its products and services. The Company expects that
      negative cash flow from operations may exist for the next 12 months as it
      continues to develop and market its products and services. If cash generated
      by
      operations is insufficient to satisfy the Company's liquidity requirements,
      the
      Company may be required to sell additional equity or debt securities. The sale
      of additional equity or convertible debt securities would result in additional
      dilution to the Company's shareholders.





Risk
      Factors:





INTELLECTUAL
      PROPERTY RIGHTS





The
      company regards its patents, trademarks, trade secrets, and other intellectual
      property (collectively, the "Intellectual Property Assets") as critical to
      its
      success. The company relies on a combination of patents, trademarks, and trade
      secret and copyright laws, as well as confidentiality procedures, contractual
      provisions, and other similar measures, to establish and protect its
      Intellectual Property Assets.





We
      generally enter into confidentiality and invention agreements with our employees
      and consultants. However, patents and agreements and various other measures
      we
      take to protect our intellectual property from use by others may not be
      effective for various reasons, including the following:





Our
      pending patent applications may not be granted for various reasons, including
      the existence of similar patents or defects in the applications; arties to
      the
      confidentiality and invention agreements may have such agreements declared
      unenforceable or, even if the agreements are enforceable, may breach such
      agreements;





The
      costs
      associated with enforcing patents, confidentiality and invention agreements
      or
      other intellectual property rights may make aggressive enforcement cost
      prohibitive;





Even
      if
      we enforce our rights aggressively, injunctions, fines and other penalties
      may
      be insufficient to deter violations of our intellectual property rights;
      and


11





Other
      persons may independently develop proprietary information and techniques that,
      although functionally equivalent or superior to our intellectual proprietary
      information and techniques, do not breach our patented or unpatented proprietary
      rights.





Because
      the value of our company and common stock is rooted primarily in our proprietary
      intellectual property, our inability to protect our proprietary intellectual
      property or gain a competitive advantage from such rights could have a material
      adverse effect on our business.





In
      addition, we may inadvertently be infringing on the proprietary rights of other
      persons and may be required to obtain licenses to certain intellectual property
      or other proprietary rights from third parties. Such licenses or proprietary
      rights may not be made available under acceptable terms, if at all. If we do
      not
      obtain required licenses or proprietary rights, we could encounter delays in
      product development or find that the development or sale of products requiring
      such licenses is foreclosed.





We
      anticipate that any business model we develop will be subject to change. At
      this
      time it is impossible for us to predict the degree to which demand for our
      products will evolve or whether any potential market will be large enough to
      provide any meaningful revenue or profit for us.





We
      have
      not been profitable since our inception. Although we believe that we may
      recognize revenues during the next twelve months based on our license agreement
      with IPTH, and expressions of interest from third parties, there can be no
      assurances as to when and whether we will be able to commercialize our products
      and technologies and realize any revenues. Our technologies have never been
      utilized on a large-scale commercial basis.





We
      expect
      that we will continue to generate losses until at least such time as we can
      commercialize our technologies. No assurance can be given that we can complete
      the development of any technology or that, if any technology is fully developed,
      it can be manufactured and marketed on a commercially viable basis. Furthermore,
      no assurance can be given that any technology will receive market acceptance.
      We
      are subject to all risks inherent in the establishment of a developing or new
      business. Certain nuclear technologies we are developing may be regulated now
      or
      in the future by the United States Government and may subject to regulatory
      requirements or export restrictions.





Management
      of Growth





The
      Company expects to experience growth in the number of employees relative to
      its
      current levels of employment and the scope of its operations. In particular,
      the
      Company may need to hire scientists, as well as sales, marketing and
      administrative personnel. Additionally, acquisitions could result in an increase
      in employee headcount and business activity. Such activities could result in
      increased responsibilities for management. The Company believes that its ability
      to attract, train, and retain qualified technical, sales, marketing, and
      management personnel, will be a critical factor to its future success. During
      strong business cycles, the Company may experience difficulty in filling its
      needs for qualified personnel.





The
      Company's future success will be highly dependent upon its ability to
      successfully manage the expansion of its operations. The Company's ability
      to
      manage and support its growth effectively will be substantially dependent on
      its
      ability to implement adequate financial and management controls, reporting
      systems, and other procedures and hire sufficient numbers of financial,
      accounting, administrative, and management personnel. The Company is in the
      process of establishing and upgrading its financial accounting and procedures.
      There can be no assurance that the Company will be able to identify, attract,
      and retain experienced accounting and financial personnel. The Company's future
      operating results will depend on the ability of its management and other key
      employees to implement and improve its systems for operations, financial
      control, and information management, and to recruit, train, and manage its
      employee base. There can be no assurance that the Company will be able to
      achieve or manage any such growth successfully or to implement and maintain
      adequate financial and management controls and procedures, and any inability
      to
      do so would have a material adverse effect on the Company's business, results
      of
      operations, and financial condition.





The
      Company's future success depends upon its ability to address potential market
      opportunities while managing its expenses to match its ability to finance its
      operations. This need to manage its expenses will place a significant strain
      on
      the Company's management and operational resources. If the Company is unable
      to
      manage its expenses effectively, the Company's business, results of operations,
      and financial condition may be materially adversely affected.


12


Risks
      associated with acquisitions





As
      a
      major component of its business strategy, the Company expects it may acquire
      assets, and businesses, and, or technologies relating to or complementary to
      its
      business model. Any acquisitions by the Company would involve risks commonly
      encountered in acquisitions of companies. These risks would include, among
      other
      things, the following: the Company could be exposed to unknown liabilities
      of
      the acquired companies; the Company could incur acquisition costs and expenses
      higher than it anticipated; fluctuations in the Company's quarterly and annual
      operating results could occur due to the costs and expenses of acquiring and
      integrating new businesses or technologies; the Company could experience
      difficulties and expenses in assimilating the operations and personnel of the
      acquired businesses; the Company's ongoing business could be disrupted and
      its
      management's time and attention diverted; the Company could be unable to
      integrate successfully.





Liquidity
      and Working Capital Risks; Need for Additional Capital to Finance Growth and
      Capital Requirements





We
      have
      had limited working capital and we are relying upon notes (borrowed funds)
      to
      operate. We may seek to raise capital from public or private equity or debt
      sources to provide working capital to meet our general and administrative costs
      until net revenues make the business self-sustaining. We cannot guarantee that
      we will be able to raise any such capital on terms acceptable to us or at all.
      Such financing may be upon terms that are dilutive or potentially dilutive
      to
      our stockholders. If alternative sources of financing are required, but are
      insufficient or unavailable, we will be required to modify our growth and
      operating plans in accordance with the extent of available funding.





New
      Business





We
      are a
      new business and you should consider factors which could adversely affect our
      ability to generate revenues, which include, but are not limited to, maintenance
      of positive cash flow, which depends on our ability both to raise capital and
      to
      obtain additional financing as required, as well as the level of sales
      revenues.





Potential
      fluctuations in quarterly operating results -





Our
      quarterly operating results may fluctuate significantly in the future as a
      result of a variety of factors, most of which are outside our control,
      including: the interest in our products; seasonal trends in purchasing, the
      amount and timing of capital expenditures and other costs relating to the
      development of our products; price competition or pricing changes in the
      industry; technical difficulties or system downtime; general economic
      conditions. Our quarterly results may also be significantly impacted by the
      impact of the accounting treatment of acquisitions, financing transactions
      or
      other matters. Particularly at our early stage of development, such accounting
      treatment can have a material impact on the results for any quarter. Due to
      the
      foregoing factors, among others, it is likely that our operating results will
      fall below our expectations or those of investors in some future
      quarter.





Dependence
      Upon Management





Our
      future performance and success are dependent upon the efforts and abilities
      of
      our management team, directors and key contractors. If we lost the services
      key
      members of management or other key employees before we could get a qualified
      replacement, that loss could materially adversely affect our business. We do
      not
      maintain key man life insurance on any of our Management.





Lack
      of
      Independent Directors





We
      cannot
      guarantee that our Board of Directors will have a majority of independent
      directors in the future. In the absence of a majority of independent directors,
      our executive officers, who are also principal stockholders and directors,
      could
      establish policies and enter into transactions without independent review and
      approval thereof. This could present the potential for a conflict of interest
      between the Company and its stockholders generally and the controlling officers,
      stockholders, or directors.


13


Limitation
      of Liability and Indemnification of Officers and Directors





Our
      officers and directors are required to exercise good faith and high integrity
      in
      our management affairs. Our Articles of Incorporation provide, however, that
      our
      officers and directors shall have no liability to our shareholders for losses
      sustained or liabilities incurred which arise from any transaction in their
      respective managerial capacities unless they violated their duty of loyalty,
      did
      not act in good faith, engaged in intentional misconduct or knowingly violated
      the law, approved an improper dividend or stock repurchase, or derived an
      improper benefit from the transaction. Our Articles and By-Laws also provide
      for
      the indemnification by us of the officers and directors against any losses
      or
      liabilities they may incur as a result of the manner in which they operate
      our
      business or conduct the internal affairs, provided that in connection with
      these
      activities they act in good faith and in a manner that they reasonably believe
      to be in, or not opposed to, the best interests of the Company, and their
      conduct does not constitute gross negligence, misconduct or breach of fiduciary
      obligations.





Audit's
      Opinion Expresses Doubt About The Company's Ability To Continue As a "Going
      Concern".




The
        accompanying consolidated financial statements have been prepared assuming
        the
        Company will continue as a going concern. As discussed in Note 3 to the
        consolidated financial statements, the Company has suffered recurring losses
        from operations. This raises substantial doubt about its ability to continue
        as
        a going concern. Management's plans in regard to these matters are also
        described in Note 3. The consolidated financial statements do not include
        any
        adjustments that might result from the outcome of this uncertainty.


Delays
      in
      the Introduction of Our Products





The
      Company may be subject to regulation by numerous governmental authorities.
      Failure to obtain regulatory approvals or delays in obtaining regulatory
      approvals by the Company, its collaborators or licensees would adversely affect
      the marketing of products developed by the Company, as well as hinder the
      Company's ability to generate product revenues. Further, there can be no
      assurance that the Company, its collaborators or licensees will be able to
      obtain the necessary regulatory approvals. Although the Company does not
      anticipate problems satisfying any of the regulations involved, the Company
      cannot foresee the possibility of new regulations that could adversely affect
      the business of the Company.





Dependence
      on Independent Parties to Produce our Products





The
      Company may be dependent upon current and future collaborations with and among
      independent parties to research, develop, test, manufacture, sell, or distribute
      our products. The Company intends to continue to rely on such collaborative
      arrangements. Some of the risks and uncertainties related to the reliance on
      such collaborations include, but are not limited to 1) the ability to negotiate
      acceptable collaborative arrangements, 2) the fact that future or existing
      collaborative arrangements may not be successful or may not result in products
      that are marketed or sold, 3) such collaborative relationships may actually
      act
      to limit or restrict the Company, 4) collaborative partners are free to pursue
      alternative technologies or products either on their own or with others,
      including the Company's competitors 5) the Company's partners may terminate
      a
      collaborative relationship and such termination may require the Company to
      seek
      other partners, or expend substantial additional resources to pursue these
      activities independently. These efforts may not be successful and may interfere
      with the Company's ability to manage, interact and coordinate its timelines
      and
      objectives with its strategic partners.





Government
      Regulation





Our
      products and technologies and our ongoing research and development activities
      are subject to regulation for safety, efficacy and quality by numerous
      governmental authorities in the United States and other countries. Depending
      on
      the technology, regulatory approvals and certification may be necessary from
      the
      Department of Transportation, Department of Energy, Nuclear Regulatory
      Commission, Environmental Protection Agency, Department of Defense, and other
      federal, state, or local facilities. Failures or delays by the company or its
      affiliates or licensees in obtaining the required regulatory approvals would
      adversely affect the marketing of products that the company develops and our
      ability to receive product revenues or royalties.


14


Limited
      Market Due To Penny Stock





The
      Company's stock differs from many stocks, in that it is a "penny stock." The
      Securities and Exchange Commission has adopted a number of rules to regulate
      "penny stocks." These rules include, but are not limited to, Rules 3a5l-l,
      15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and
      Exchange Act of 1934, as amended. Because our securities probably constitute
      "penny stock" within the meaning of the rules, the rules would apply to us
      and
      our securities. The rules may further affect the ability of owners of our stock
      to sell their securities in any market that may develop for them. There may
      be a
      limited market for penny stocks, due to the regulatory burdens on
      broker-dealers. The market among dealers may not be active. Investors in penny
      stock often are unable to sell stock back to the dealer that sold them the
      stock. The mark-ups or commissions charged by the broker-dealers may be greater
      than any profit a seller may make. Because of large dealer spreads, investors
      may be unable to sell the stock immediately back to the dealer at the same
      price
      the dealer sold the stock to the investor. In some cases, the stock may fall
      quickly in value. Investors may be unable to reap any profit from any sale
      of
      the stock, if they can sell it at all. Stockholders should be aware that,
      according to the Securities and Exchange Commission Release No. 34- 29093,
      the
      market for penny stocks has suffered in recent years from patterns of fraud
      and
      abuse. These patterns include: - Control of the market for the security by
      one
      or a few broker- dealers that are often related to the promoter or issuer;
      -
      Manipulation of prices through prearranged matching of purchases and sales
      and
      false and misleading press releases; - "Boiler room" practices involving high
      pressure sales tactics and unrealistic price projections by inexperienced sales
      persons; - Excessive and undisclosed bid-ask differentials and markups by
      selling broker- dealers; and - The wholesale dumping of the same securities
      by
      promoters and broker- dealers after prices have been manipulated to a desired
      level, along with the inevitable collapse of those prices with consequent
      investor losses. Furthermore, the "penny stock" designation may adversely affect
      the development of any public market for the Company's shares of common stock
      or, if such a market develops, its continuation. Broker-dealers are required
      to
      personally determine whether an investment in "penny stock" is suitable for
      customers. Penny stocks are securities (i) with a price of less than five
      dollars per share; (ii) that are not traded on a "recognized" national exchange;
      (iii) whose prices are not quoted on the NASDAQ automated quotation system
      (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an
      issuer with net tangible assets less than $2,000,000 (if the issuer has been
      in
      continuous operation for at least three years) or $5,000,000 (if in continuous
      operation for less than three years), or with average annual revenues of less
      than $6,000,000 for the last three years. Section 15(g) of the Exchange Act,
      and
      Rule 15g-2 of the Commission require broker-dealers dealing in penny stocks
      to
      provide potential investors with a document disclosing the risks of penny stocks
      and to obtain a manually signed and dated written receipt of the document before
      effecting any transaction in a penny stock for the investor's account. Potential
      investors in the Company's common stock are urged to obtain and read such
      disclosure carefully before purchasing any shares that are deemed to be "penny
      stock." Rule 15g-9 of the Commission requires broker- dealers in penny stocks
      to
      approve the account of any investor for transactions in such stocks before
      selling any penny stock to that investor. This procedure requires the
      broker-dealer to (i) obtain from the investor information concerning his or
      her
      financial situation, investment experience and investment objectives; (ii)
      reasonably determine, based on that information, that transactions in penny
      stocks are suitable for the investor and that the investor has sufficient
      knowledge and experience as to be reasonably capable of evaluating the risks
      of
      penny stock transactions; (iii) provide the investor with a written statement
      setting forth the basis on which the broker-dealer made the determination in
      (ii) above; and (iv) receive a signed and dated copy of such statement from
      the
      investor, confirming that it accurately reflects the investor's financial
      situation, investment experience and investment objectives. Compliance with
      these requirements may make it more difficult for the Company's stockholders
      to
      resell their shares to third parties or to otherwise dispose of
      them.





Potential
      Inability of Officers to Devote Sufficient Time to the Operations of the
      Business





Our
      officers are not currently being paid all of their salaries. In some cases,
      officers are not paid at all. Unless we are able to secure additional funding
      for operations, we cannot guarantee that they will be able to continue to devote
      sufficient time to the operations of the business.





Sarbanes-Oxley
      Act of 2002


We
        will
        be required to evaluate our internal controls under Section 404 of the
        Sarbanes-Oxley Act of 2002 (SOX), and any adverse results from such evaluation
        could result in a loss of investor confidence in our financial reports and
        have
        an adverse effect on the price of our shares of common stock. Pursuant to
        Section 404 of SOX, beginning with our annual report on Form 10-K for the
        fiscal
        year ended December 31, 2007, we will be required to furnish a report by
        management on our internal controls over financial reporting.  This report
        will contain among other matters, an assessment of the effectiveness of our
        internal control over financial reporting, including a statement as to whether
        or not our internal control over financial reporting is effective.  This
        assessment must include disclosure of any material weaknesses in our internal
        control over financial reporting identified by our management.  This report
        must also contain a statement that our auditors have issued an attestation
        report on our management’s assessment of these internal controls.  Public
        Company Accounting Oversight Board Auditing Standard No. 5 provides the
        professional standards for auditors to attest to, and report on, our
        management’s assessment of the effectiveness of internal control over financial
        reporting under Section 404.


15





We
      cannot
      be certain that we will be able to complete our assessment, testing and any
      required remediation in a timely fashion.  During the evaluation and
      testing process, if we identify one or more material weaknesses in our internal
      control over financial reporting, we will be unable to assert that such internal
      control is effective.  If we are unable to assert that our internal control
      over financial reporting is effective (or if our auditors are unable to attest
      that our managements report is fairly stated or they are unable to express
      an
      opinion on the effectiveness of our internal controls), we could lose investor
      confidence in the accuracy and completeness of our financial reports, which
      could have a material adverse effect on our stock price.





Failure
      to comply with the new rules may make it more difficult for us to obtain certain
      types of insurance, including director and officer liability insurance.  We
      may be forced to accept reduced policy limits and coverage and/or incur
      substantially higher costs to obtain the same or similar coverage.  The
      impact of these events could also make it more difficult for us to attract
      and
      retain qualified persons to serve on our board of directors, on committees
      of
      our board of directors, or as executive officers.




The
      SEC
      has proposed yet
      another one-year delay in implementation of an independent auditor’s attestation
      report on the internal controls for the smallest public companies. Chairman
      Cox
      had promised this delay in his testimony before the House Committee on Small
      Business in December 2007.




Under
      the
      proposal, non-accelerated filers would be required to provide auditor’s
      attestation reports beginning with their annual reports filed for fiscal years
      ending on or after December 15, 2009. The proposal does not affect the
      requirement that management complete its own assessment of internal control
      over
      financial reporting - which is now required for all filers, regardless of size.





**Item 1B.**
            **Unresolved
                Staff Comments.**Not
                Applicable to a Smaller Reporting
                Company





**Item
      2.**   **Description
      of Property.**





Our
      principal business address is 1025 Connecticut Ave NW, Suite 1000 Washington,
      DC
      20036 and our principal mailing address is 5505 Connecticut Ave NW, #191,
      Washington, DC 20015.





We
      have
      arranged for office facilities on a month-to month agreement whereby we can
      utilize office space, conference rooms, and other facilities on an ad-hoc basis.
      The square footage of the facility is approximately 8,000 Sq ft. and
      approximately 1,500 is shared. The annual cost is approximately $50,255. We
      anticipate requiring additional office space over the next 12
      months.





**Item
      3.**  **Legal
      Proceedings.**





The
      Company is not a party to any pending legal proceeding.





**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 fourth quarter of the fiscal year covered
      by
      this report.





PART
      II





**Item 5.**
            **Market
                for Common Equity, Related Stockholder Matters and Issuer Purchases
                of
                Equity Securities.**





Market
      For Common Equity And Related Stockholder Matters


Our
      common stock is traded on the OTC Electronic Bulletin Board. The following
      table
      sets forth the high and low bid prices of our common stock for each quarter
      for
      the years 2007 and 2006, including the first quarter of 2008. The quotations
      set
      forth below reflect inter-dealer prices, without retail mark-up, mark-down
      or
      commission and may not represent actual transactions.


16





Table
      1.





Bid
      Information





Fiscal
                Quarter Ended
            
            Low
            
            HighMarch
                31, 2008
            
            
            0.29
            
            
            0.33December
                31, 2007
            
            
            0.54
            
            
            0.62September
                30, 2007
            
            
            0.40
            
            
            0.43June
                30, 2007
            
            
            0.53
            
            
            0.60March
                31, 2007
            
            
            0.68
            
            
            0.73December
                31, 2006
            
            
            0.80
            
            
            0.87September
                30, 2006
            
            
            0.99
            
            
            1.13June
                30, 2006
            
            
            1.14
            
            
            1.19March
                31, 2006
            
            
            0.80
            
            
            0.85





(a)
            Holders.




Our
      company has approximately 530 shareholders of its common stock as of December
      31, 2007 holding 73,734,095 common shares.





(b)
            Dividends.





There
      are
      no restrictions imposed on the Company which limit its ability to declare or
      pay
      dividends on its common stock, except for corporate state law limitations.
      No
      cash dividends have been declared or paid to date and none are expected to
      be
      paid in the foreseeable future.





(c)
            Recent
                Sales of Unregistered Securities





During
      the fourth quarter of 2007, the Company offered and sold the following
      securities pursuant to a securities transaction exemption from the registration
      requirements of the Securities Act of 1933, as amended.





On
      October 24, 2007, we issued Denise Barbato 2,550,000 common shares valued at
      $214,200 as a partial payment on the January 8, 2004 debt consolidation
      agreement.





On
      December 6, 2007, we issued Frank Howard 200,000 common shares valued at $45,000
      for public relations services.





On
      December 7, 2007, we issued 1,000,000 common shares to Fred Frisco under the
      terms of a Consulting and Legal Services Agreement valued at
      $240,000.





On
      December 12, 2007, we issued 1,187,001 common shares as payment in full to
      Long
      Lane Capital, Inc. for our outstanding loan. The outstanding loan principal
      balance is $100,000 plus $7,423.62 accrued interest. The loan conversion price
      was pre-determined by contractual agreement.





The
      securities issued above were issued in a private transaction pursuant to Section
      4(2) of the Securities Act of 1933, as amended, (the “Securities Act”). These
      shares are considered restricted securities and may not be publicly resold
      unless registered for resale with appropriate governmental agencies or unless
      exempt from any applicable registration requirements.





(d)
            Securities
                Authorized for Issuance under Equity Compensation
                Plans





The
      following table summarizes our equity compensation plan information as of
      December 31, 2007. Information is included for equity compensation plans not
      approved by our security holders.


17





Table
      1.





Equity
      Compensation Plan Information





Plan
                Category
            
            Number of Securities to be issued upon exercise of outstanding options,warrants and rights(a)
            
            Weighted-averageExercise price ofoutstanding options,
              warrants, and rights(b)
            
            Number of Securitiesremaining availablefor future issuance under equity compensation plans(excluding securities reflected in column (a)
              (c)Equity
                Compensation Plans approved by security holders
            
            
            None
            
            
            None
            
            
            NoneEquity
                Compensation Plans not approved by security holders
            
            
            5,500,000
            (1)
            $
            0.62
            
            
            -0-5,000,000
            (2)
            $
            0.625
            
            
            -0-5,000,000
            (3)
            $
            0.52
            
            
            3,156,281Total
            
            
            15,500,000
            
            
            
            
            
            3,156,281





(1)
      On
      August, 17, 2005, the company adopted a Stock Grant Plan. The plan reserved
      5,500,000 shares. The Plan was registered on a Form S-8 registration statement
      filed on November 16, 2004. The Plan is administered by our Board of Directors. Directors,
      officers, employees, consultants, attorneys, and others who provide services
      to
      our Company are eligible participants. Participants are eligible to be granted
      warrants, options, common stock as compensation. During
      2007, we issued 1,367,307 shares from this Plan.


(2)
      On
      March 7, 2007, the company adopted a Stock Grant Plan. The plan reserved
      5,000,000 shares. The Plan was registered on Form S-8 Registration Statement
      filed on March 9, 2007. Directors, officers, employees, consultants, attorneys,
      and others who provide services to our Company are eligible participants.
      Participants are eligible to be granted warrants, options, common stock as
      compensation. During 2007, we issued 5,000,000 shares from this
      Plan.


(3)
      On
      November 28, 2007, the company adopted a Stock Grant Plan. The plan reserved
      5,000,000 shares. The Plan was registered on Form S-8 Registration Statement
      filed on December 6, 2007. Directors, officers, employees, consultants,
      attorneys, and others who provide services to our Company are eligible
      participants. Participants are eligible to be granted warrants, options, common
      stock as compensation. During 2007, we issued 1,843,719 shares from this
      Plan.





**Item 6.**
            **Selected
                Financial Data.**Not
                Applicable to Smaller Reporting
                Companies





**Item 7.**
            **Management’s
                Discussion and Analysis.**





When
      used
      in this Form 10-K 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**





Nuclear
      Solutions, Inc. is engaged in the research, development, and commercialization
      of innovative product 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 advanced product technologies
      to
      address emerging market opportunities in the fields of nuclear technology and
      synthetic and bio-fuels. The company, through its subsidiaries Fuel Frontiers,
      Inc. is also engaged in the development of facilities to produce synthetic
      ultra-clean diesel from waste materials and coal.


18





When
      used
      in this Form 10-K 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.





Plan
      of
      Operation





We
      will
      need to raise additional money to fund our operations. We intend to use debt,
      equity or a combination thereof to fund this project. There is no guarantee
      that
      we will be able to successfully raise the required funds for operations, or
      that
      such funds will be available on terms satisfactory to us. Any inability to
      raise
      additional funds would require that we significantly scale back our planned
      operations and would lengthen the period of time required to bring the
      technology to the marketplace.





Since
      our
      products and technologies are still in development and there can be no
      assurances as to when and whether we will be able to commercialize our products
      and technologies. Our technologies have never been utilized on a large-scale
      commercial basis.





Over
      the
      next 12 months we expect that we will continue to generate losses until at
      least
      such time as we can generate additional revenue. No assurance can be given
      that
      we can complete the development of any technology or that, if any technology
      is
      fully developed, it can be manufactured and marketed on a commercially viable
      basis. Furthermore, no assurance can be given that any technology will receive
      market acceptance. Until commercial operations are established, no assurance
      can
      be given that the Company's technologies will be commercially successful. Being
      a company with limited resources, we are subject to all risks inherent with
      the
      establishment of a developing or new business. The technologies we are
      developing may be regulated now or in the future by the United States Government
      and may subject to regulatory requirements or export restrictions. We are also
      subject to additional regulations concerning nuclear technologies. Some of
      the
      technologies we develop may be subject to the Atomic Energy Act of
      1954.





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.




Comparison
      of Results of Operations for the year
      ended December 31, 2007 to the year ended December 31, 2006





REVENUES





During
      the year ended December 31, 2007, we recognized revenues of $100,000 resulting
      from our license sale to I.P. Technology Holding, Inc. This compares to $223,000
      in revenues for the same period ended December 31, 2006.





On
      March
      15, 2005, we entered into a License Agreement with I.P. Technology Holding,
      Inc.(IPTH), a New Jersey corporation. We granted I.P. Technology a limited
      license for the right to the purchase and resell products based on our patent
      pending technology for the detection of shielded fissile nuclear materials
      to
      all non-federal police and fire agencies in the United States for the
      patent life of the technology.





Additionally,
      IPTH has the right to sub-license their rights under the terms of the license
      with the approval of the company. IPTH has agreed to pay Nuclear Solutions
      the
      sum of Nine Million Seven Hundred Thousand ($9,700,000) Dollars over a ten
      (10)
      year period, payable on a Bi-annual basis in the amount of $485,000 Dollars,
      or
      more, until paid in full. To the extent this technology is commercialized,
      we
      will be entitled to an Eight(8%) percent royalty payment on all I.P. Technology
      Holding gross revenue related to this technology. On January 10, 2006 we
      modified the March 15, 2005 licensing agreement with I.P. Technology Holding,
      Inc. Wherein license fees totaling $465,416 on December 31, 2005 were deferred
      until April 2006 and IPTH's payment schedule was changed to
      bi-annual.


19





While
      the
      total revenue under the License Agreement is $9.7 Million over a ten-year
      period, management has elected to recognize the license revenue on a cash basis.
      We have made this election because IPTH is a start-up enterprise and this raises
      the level of risk and uncertainty regarding the ultimate collectability of
      the
      $9.7 million Dollars over a ten-year period. At this time, we believe this
      conservative approach is prudent. Management will re-evaluate this financial
      treatment on a quarterly basis.





Business
      Concentration





For
      the
      year ended December 31, 2006, and December 31, 2007 the balance of all accounts
      receivables was from one customer.





OPERATING
      EXPENSES





Operating
      expenses for the period ended December 31, 2007 were $ 4,895,729 and compares
      to
      3,973,934 for the same period ended December 31, 2006. Included in the year
      ended December 31, 2007 are $2,856,713 and $917,996 in expenses for consulting
      fees and legal fees respectively. This compares to $2,635,488 in consulting
      fees
      and $1,023,392 in legal fees for the year ended December 31, 2006. Legal fees
      decreased due to decreased activity in the development of intellectual property
      and filing of patent applications.





During
      the year ended December 31, 2007 we incurred losses of $5,509,400. This compares
      to losses of $3,885,078 for the year ended December 31, 2006. These expenses
      were associated principally with equity-based
      compensation to employees and consultants, product development costs and
      professional services. As a
      result of limited capital resources from its inception, the Company has relied
      on the issuance of equity securities to non-employees in exchange for
      services.





The
      Company's management enters into equity compensation agreements with
      non-employees if it is in the best interest of the Company under terms and
      conditions consistent with the requirements of Financial Accounting Standards
      No. 123, Accounting for Stock Based Compensation. In order conserve its limited
      operating capital resources, the Company anticipates continuing to compensate
      non-employees for services during the next twelve months. This policy may have
      a
      material effect on the Company's results of operations during the next twelve
      months.





Liquidity
      and Capital Resources


As
        of
        December 31, 2007, we had a working capital deficit of $5,172,133 which compares
        to a working capital deficit of $5,114,819 as of December 31, 2006. As a
        result
        of our operating losses for the year ended December 31, 2007, we generated
        a
        cash flow deficit of $615,950 from operating activities. Cash flows used
        in
        investing activities was $0 during the period. Cash flows provided by financing
        activities were $777,480 on proceeds from short-term notes payable and from
        the
        sale of common stock in the year ended December 31, 2007.


In
      addition to the revenue provided by the license agreement with IPTH, additional
      financing is 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 in order to provide the necessary working capital. We currently have
      no commitments for financing. 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. By adjusting our operations
      and
      development to the level of capitalization, we believe that the annual expected
      license revenue of $970,000 if collected will be sufficient to sustain the
      basic
      company operations over the next 12 months.





Management
      is uncertain if it will have sufficient capital resources to meet projected
      cash
      flow deficits through the next twelve months. If we are not successful in
      generating sufficient liquidity from operations or in raising sufficient capital
      resources during the next twelve months, on terms acceptable to us, this could
      have a material adverse effect on our business, results of operations liquidity
      and financial condition.





Auditors'
      opinion expresses doubt about the Company's ability to continue as a going
      concern. The independent auditors report on the company's December 31, 2007
      financial statements included in this Form states that the Company's recurring
      losses raise substantial doubts about the Company's ability to continue as
      a
      going concern.


20





Product
      Research and Development





We
      anticipate continuing to incur research and development expenditures in
      connection with the development of nuclear micro-battery technology, weapon
      detection technology, Tritiated water remediation technology during the next
      twelve months. This includes, but is not limited to: $500,000 to $1,000,000
      for
      micro-battery technology, approximately $500,000 for Tritiated water remediation
      technology, and approximately $1,500,000 for the shielded nuclear material
      detector technology.





These
      projected expenditures are dependent upon our generating revenues and obtaining
      sources of financing in excess of our existing capital resources. There is
      no
      guarantee that we will be successful in raising the funds required or generating
      revenues sufficient to fund the projected costs of research and development
      during the next twelve months.





Acquisition
      or Disposition of Plant and Equipment





We
      do not
      anticipate the sale of any significant property, plant or equipment during
      the
      next twelve months. We do not anticipate the acquisition of any significant
      property, plant or equipment during the next 12 months.





From
      our
      inception through the period ended December 31, 2007, we have relied on the
      services of outside consultants for services and currently have one full time
      and one part time employee. In order for us to attract and retain quality
      personnel, we anticipate we will have to offer competitive salaries to future
      employees. We do anticipate our employment base will increase to approximately
      5
      full time employees as some contractors convert to employee status during the
      next 12 months. As we continue to expand, we will incur additional cost for
      personnel. This projected increase in personnel is dependent upon our generating
      revenues and obtaining sources of financing. There is no guarantee that we
      will
      be successful in raising the funds required or generating revenues sufficient
      to
      fund the projected increase in the number of employees.





Inflation





The
      effect of inflation on our operating results was not significant. Our operations
      are located in North America and there are no seasonal aspects that would have
      a
      material effect on our financial condition or results of
      operations.





Off-Balance
      Sheet Arrangements





We
      do not
      have any off-balance sheet arrangements.





**Item 7A.
      Quantitative and Qualitative Disclosure 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 December 31, 2007, we
      had
      cash and cash equivalents aggregated $192,981.





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.


21





**Item
      8. Financial Statements and Supplementary Data.**




**Item
      9.**  **Changes
      In and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





We
      have
      had no disagreements on any matter of accounting principles or practices,
      financial statement disclosure, or auditing scope or procedures with any of
      our
      accountants for the year ended December 31, 2007 or any interim period. We
      have not had any other changes in nor have we had any disagreements, whether
      or
      not resolved, with our accountants on accounting and financial disclosures
      during our recent fiscal year or any later interim period.





**Item 9A.**
            **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 December 31, 2007 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 December
        31, 2007 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 December
        31, 2007, 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.


22




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.




**ITEM
        8B.** **Other
        Information**
 
 In
        our
        Quarterly Report on Form 10-Q for the period ending September 30, 2007, under
        Item 5, titled “Other Information”, we disclosed that Nuclear Solutions had
        received $200,000 as a partial payment associated with a Development Agreement
        with Kentucky Fuel Associates, Inc. (“KFA”) The
        Company received a deposit from KFA for the $200,000 however, the funds were
        dishonored. To
        date,
        KFA has not delivered good funds on this Development Agreement. KFA has
        indicated that they are working to rectify the situation as soon as possible
        and
        management has deferred the receipt of these funds pending further discussions
        and progress in this matter.





PART
      III





**Item 10.**
            **Directors,
                Executive Officers and Corporate
                Governance**





The
      following table sets forth the officers and directors of the Nuclear Solutions,
      Inc.





(a)
            Directors
                and Executive Officers





The
      following persons are the Directors and Executive Officers of Nuclear Solutions,
      Inc.





Name
            Age
            Position(s)Patrick
                Herda
            38
            President,
                CEO, Chairman Board DirectorsKenneth
                Faith
            38
            CFO,
                Principal Accounting Officer,Member
                Board of DirectorsJohn
                Powers, Ph.D.
            73
            Member
                Board of DirectorsJack
                Young
            78
            Vice
                President





PATRICK
      HERDA, President, CEO, Chairman, Board of Directors





Patrick
      Herda, Joined Nuclear Solutions, Inc. in September 2001. He became the company's
      President and CEO on June 19, 2003. As a full time officer, Herda provides
      the
      company with a portfolio of skills that blends business experience with
      scientific and technical aptitude developed in the course of working with
      technology companies over the last ten years. Herda's business background
      includes operations management, strategic planning, marketing, communications,
      business development, and fiscal planning. He has aptitude and experience in
      business, science, and technology that includes nuclear science, management
      of
      R&D, and industrial process control systems. From September 2001 to June
      2003, he served as Vice President of Business Development for Nuclear Solutions,
      Assistant Secretary, and Chief Financial Officer. During that time, he was
      responsible for creating and managing strategic alliances with government and
      industrial partners, as well as identifying and developing new business
      opportunities for the company. From 1997 to 2001, Mr. Herda held the following
      concurrent positions: From 1997 to 2001, Herda was a managing member Particle
      Power Systems, LLC., a private nuclear R&D company. As a managing member, he
      was responsible for general operations concerning the development of innovative
      nuclear micro-battery power technologies for military and aerospace applications.
      From 1993 to 1995, Herda served as Vice President for Butler Audio, a Start-Up
      design and manufacturing firm for audio consumer electronics products. He
      successfully managed new product introduction, manufacturing, and strategic
      planning. Mr. Herda attended Drexel University in Philadelphia, PA, where he
      studied Commerce and Engineering, and Regis University in Denver, CO. where
      he
      studied business finance. Mr. Herda currently holds memberships in the American
      Nuclear Society, International Association for Energy Economics, and the
      Institute of Nuclear Materials Management.




23




KENNETH
      A. FAITH, Chief Financial Officer, Principal Accounting Officer, Member of
      the
      Board of Directors.





On
      October 9, 2006, Mr. Faith was appointed Chief Financial Officer and Principal
      Accounting Officer. On December 7, 2006, the Board of Directors nominated
      Kenneth Faith to the Company's board of directors.





Mr.
      Faith
      holds a Bachelor of Science Degree in Accounting from Drexel University,
      Philadelphia, Pennsylvania.





During
      the past five years, Mr. Faith has held a variety of executive level positions
      as outlined below:





PFPC,Inc.,
      Wilmington, DE. February 2006-Present. Title: Fund Accounting and Administration
      Director. Mr. Faith is responsible for financial reporting, budget analysis
      and
      client relations for one of the firm's five largest clients, 92 mutual funds,
      with a combined net assets of $50 billion.





Citco
      Mutual Fund Services, Inc., Malvern, PA. March 2003-November 2005. Title: Chief
      Operating Officer. Mr. Faith was responsible for daily operations, responses
      to
      requests for proposal, business planning and client relations of a start up
      mutual fund service provider. During Mr. Faith's tenure at Citco he was
      responsible for tripling service assets and firm revenues.





JP
      Morgan
      Fleming Asset Management, New York, NY & Wilmington, DE. March 2002-March
      2003. Title: Vice President, Fund Financial Intermediaries Operations Quality
      & Analysis. Mr. Faith's responsibilities included creating analytical
      reporting for business monitoring, evaluating process flows for efficiency,
      coordinating with internal and external auditors and performing consulting
      services for the entire Fund organization. His additional responsibilities
      included establishing infrastructure to support launch and distribution of
      new
      products, improving operational workflows, insuring effective project
      implementation focused on reducing operational risk.





JOHN
      POWERS, Ph.D, Member Board of Directors





John
      Powers is the Chairman of the FirTH Alliance, LLC. The Alliance, created to
      respond to the emerging terrorist threat, includes senior executives and public
      safety leaders who helped formulate the nation’s contingency planning,
      continuity of operations, emergency preparedness and infrastructure assurance
      programs.





John’s
      approach to Managing the Response to a Major Terrorist Event was highlighted
      in
      McGraw Hill’s 2004/2005 Annual Review of Homeland Security. It is based on an
“automated game plan” across a region that will enable participating
      jurisdictions to respond decisively following a catastrophic incident.





John
      is
      concurrently serving as a principal in a DTRA effort to prevent the infiltration
      of a nuclear weapon into the US and is developing a comprehensive
      countermeasures architecture that will move detection and interdiction as close
      to the source as possible. The centerpiece of this proposed architecture will
      be
      a rigorous indications and warning system with levels of awareness and graduated
      response actions.





From
      1996
      to 1998, Dr. Powers served as a Commissioner and the Executive Director of
      the
      President’s Commission on Critical Infrastructure Protection. There, he managed
      the research, provided overall direction to the Commission’s deliberations and
      led the formulation of the “national structures” recommendations adopted by the
      President in PDD 63.


24




Dr.
      Powers joined the Federal Emergency Management Agency in 1983 and served as
      the
      head of its Office of Civil Preparedness and then its Office of Federal
      Preparedness. From 1993 to 1995, he served as the Director of Region V in
      Chicago, Illinois, and had responsibility for the Federal response to the "Great
      Midwest Flood" in those states.





From
      1978
      to 1983, he served as the Director of Research and Technical Assessment for
      the
      Department of Energy. His first assignment was as Executive Director for the
      Interagency Review Group on Nuclear Waste Management reporting to President
      Jimmy Carter and then as Executive Director of the DOE precursor to the
      Synthetic Fuels Corporation in which he managed the award of seven billion
      dollars to stimulate new alternative energy projects.





Previously,
      he created one of the early pattern recognition programs, developed the skin
      friction law used in the Polaris nose cone, projected, stochastically, the
      commercial value of the proposed new energy technologies (contributing to the
      cancellation of two $2 billion demo projects), created a safeguards and security
      design methodology for nuclear facilities (parts of which are still in use)
      and
      managed development of the National Coal Model.





In
      1954,
      at the age of 19, he entered the U.S. Naval Flight Training program and upon
      completion was commissioned in the United States Marine Corps. After leaving
      active duty in 1958, he continued in the Marine Corps Reserve. As a reservist,
      he commanded an A4 squadron at Willow Grove, PA, and later, in Washington
      developed the concept and managed preparation of the Marine Corps Mobilization
      Management Plan and the DOD Master Mobilization Plan.





Dr.
      Powers holds a B.S. degree from Columbia University, an M. Div. degree from
      Princeton Theological Seminary, and a Ph.D. in physics from the University
      of
      Pennsylvania.





JOHN
      C.
      (JACK) YOUNG, Vice President of Corporate Development and President of Fuel
      Frontiers, Inc.





Jack
      Young, is the Vice President of Development for Nuclear Solutions, Inc.,
      appointed October 2003. Mr. Young's role is to develop and refine the corporate
      business strategy as well as marketing and business development activities.
      From
      1998 to the present, in addition to his duties with Nuclear Solutions, Inc.,
      Mr.
      Young has been a Consultant to Star Teks, Inc., an executive search firm, and
      Corporate Communication Resources Incorporated of Princeton, New Jersey (CCRI),
      an emergency planning firm. From 1987 to 2001, Jack Young was the Acting United
      States Commissioner and Deputy Commissioner of the Commission to Study
      Alternatives to the Panama Canal, appointed by Presidents Reagan and Bush (1987
      - 2001). He was a Member of the Reagan Administration Transition Team,
      responsible for the Nuclear Regulatory Commission transition activities between
      the Carter and Reagan Administrations. From 1988-1994 he was the Vice Chairman of
      Holifield Exploration Corporation and President of the Computer Systems Group.
      From 1975-1986 he served as President of International Energy Associates,
      Limited. From 1973-1975 during the Nixon-Ford Administration, he served as
      the
      Commissioner of Public Services Administration at the U. S. Department of
      Health, Education and Welfare. From 1971-1973 Young was President of the
      Computer Systems Group of Computer Science Corporation (NYSE). From 1968-1971
      he
      was Chairman and President of Time Sharing Terminals, Inc. From 1961 - 1968
      he
      served as Vice President of NUS Corporation, a nuclear energy consulting firm.
      Mr. Young spends fifty percent of his time on business development work for
      Nuclear Solutions, Inc. Jack Young is a graduate of the U. S. Naval Academy,
      having served in both diesel and nuclear submarines. He was also an early member of
      the
      Rickover nuclear power program





(b)
      Identify Significant Employees.





BORIS
      MUCHNIK, TECHNICAL CONSULTANT





Boris
      Muchnik brings high-technology commercialization expertise full time to Nuclear
      Solutions. He joined the team in 2002. Muchnik holds over two dozen U.S. and
      international patents, which are the intellectual property basis for products
      used worldwide. Previously, as the founder, technology inventor and CEO of
      KerDix, Muchnik conceived, patented, and commercialized the recordable/erasable
      CD technology, which is utilized today in multiple audio and data
      storage/retrieval applications such as the Sony mini-disc and computer data
      devices. Subsequently, he constructed the world's first manufacturing plant
      for
      recordable/erasable CDs in Wiesbaden, Germany. Muchnik has held executive
      technical leadership positions with Fortune 500 companies, developing and
      manufacturing high-performance laser data storage systems. He has invented
      core
      technologies for other successful entrepreneurial companies, including MemArray,
      Inc., which developed VCSEL laser array technology for high-performance CD
      applications; MOST Corporation, and CaliPer, Inc. From 2002-present, Muchnik
      is
      technical and scientific Consultant to Nuclear Solutions, Inc. From 2001-2002
      Muchnik served as Vice President, Manufacturing Operations, at ColorLink, Inc.
      Boulder, Colorado. He developed and manufactured optical assemblies for
      High-Definition TV applications. From 1999-2001 Muchnik worked at Laser Program
      Coordinator, CoorsTek, Inc., Golden, Colorado. There, he designed, developed,
      and fabricated hardware/equipment for laser micro-machining of ceramic
      materials. From 1967 to 1970 Muchnik performed graduate research at Kurchatov's
      Institute of Atomic Energy, Russia's leading nuclear weapons lab. He
      participated in pioneering research for the Laser Isotope Isolation Project.
      Muchnik received his degree of engineer-physicist, specializing in nuclear
      physics, from Moscow Institute of Physics and Technology, Russia's most
      prestigious technology school. He received the equivalent of a doctorate in
      nuclear chemistry from the Institute of Physical Chemistry, Laboratory of
      Chemistry of Transuranium Elements of the Russian Academy of Sciences. Muchnik
      spent two years performing post-graduate research in Laser Raman Spectroscopy
      at
      Polytechnic Institute of New York upon arrival in the U.S. in 1976. He is a
      naturalized U.S. citizen who has been a Colorado resident since
      1980.


25


(c)
      Family Relationships. None known.





(d)
      Involvement in Certain Legal Proceedings. None of the Company's directors,
      officers, promoters or control persons, if any, during the past five years
      was,
      to the best of the Company's knowledge:





1.
      A
      general partner or executive officer of a business that had a bankruptcy
      petition filed by or against it either at the time of the bankruptcy or within
      the two years before the bankruptcy;





2.
      Convicted in a criminal proceeding or been subject to a pending criminal
      proceeding (excluding traffic violations and other minor offenses);





3.
      Subject to any order, judgment, or decree, not subsequently reversed, suspended
      or vacated, of any court of competent jurisdiction, permanently or temporarily
      enjoining, barring, suspending or otherwise limiting his or her involvement
      in
      any type of business, securities or banking activities; and





4.
      Found
      by a court of competent jurisdiction (in a civil action), the Securities and
      Exchange Commission or the Commodity Futures Trading Commission to have violated
      a federal or state securities or commodities law, and the judgment has not
      been
      reversed, suspended or vacated.





Compliance
      with Section 16(a) of the Securities Exchange Act of 1934





Section
      16(a) of the Securities Exchange Act of 1934 requires the Company's directors
      and executive officers, and persons who own more than 10% of the Company's
      Common Stock, to file with the Securities and Exchange Commission initial
      reports of beneficial ownership and reports of changes in beneficial ownership
      of Common Stock of the Company. Officers, directors and greater than 10%
      shareholders are required by the Securities and Exchange Commission to furnish
      the Company with copies of all section 16(a) reports they file.





We
      received no reports covering purchase and sale transactions in our common stock
      during 2007, and we believe that each person who, at any time during 2007,
      was a
      director, executive officer, or beneficial owner of more than 10% of our common
      stock complied with all Section 16(a) filing requirements during 2007, except
      as
      follows: (1) Jack Young did not file a Form 5.





CODE
      OF
      ETHICAL CONDUCT.





On
      March
      20, 2003, our board of directors adopted our code of ethical conduct that
      applies to all of our employees and directors, including our principal executive
      officer, principal financial officer, principal accounting officer or
      controller, and persons performing similar functions.





We
      believe the adoption of our Code of Ethical Conduct is consistent with the
      requirements of the Sarbanes-Oxley Act of 2002.





Our
      Code
      of Ethical Conduct is designed to deter wrongdoing and to
      promote:


26




o
      Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;





o
      Full,
      fair, accurate, timely and understandable disclosure in reports and documents
      that we file or submit to the Securities & Exchange Commission and in other
      public communications made by us;





o
      Compliance with applicable governmental laws, rules and
      regulations,





o
      The
      prompt internal reporting to an appropriate person or persons identified in
      the
      code of violations of our Code of Ethical Conduct;


and





o
      Accountability for adherence to the Code.





**Item
      11. Executive Compensation**





The
      following information is provided concerning the compensation of the named
      executive officers for the last two fiscal years:





Table
      1.





SUMMARY
      COMPENSATION





Name
            
            
            
            
            
            
            
            
            
            
            
            Non-Equity
              Incentive Plan
            
            Nonqualified
              Deferred
            
            All
              Otherand
            
            
            
            
            
            
            
            Stock
            
            Option
            
            Compensa-
            
            Compensation
            
            Compensa-Principal
            
            
            
            Salary
            
            Bonus
            
            Awards
            
            Awards
            
            tion
            
            Earnings
            
            tion
            
            TotalPosition
            
            Year
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)
            
            ($)(a)
            
            (b)
            
            (c)
            
            (d)
            
            (e)
            
            (f)
            
            (g)
            
            (h)
            
            (i)
            
            (j)Patrick
                Herda,
            
            
            2006
            
            
            110,000
            (1)
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            110,000Pres.,
                CEO and
            
            
            2007
            
            
            55,000
            (1)
            
            16,196
            
            
            630,000
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            701,196Director
                (1)Ken
                Faith, CFO
            
            
            2006
            
            
            -0-
            
            
            -0-
            
            
            44,250
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            44,250and
                Director (2)
            
            
            2007
            
            
            -0-
            
            
            -0-
            
            
            108,000
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            108,000Jack
                Young, V.P
            
            
            2006
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-2007
            
            
            -0-
            
            
            -0-
            
            
            72,000
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            72,000




(1)
      Patrick Herda, Nuclear Solutions,Inc. President and Chief Executive Officer’s
      base salary for the fiscal year ending December 31, 2007 was $55,000. During
      2007, the board of directors authorized the issuance of 3,500,000 shares of
      common stock valued at $630,000. As of the date of this report the shares have
      not been issued. The board authorized increasing Mr. Herda’s base annual salary
      to $250,000 commencing March 2, 2008. For the year ended 2007, Mr. Herda was
      paid $71,196 of which $55,000 was salary and $16,196 bonus. The Company paid
      him
      $17,500 of his unpaid and accured salary for prior year. All unpaid salary
      has
      been accrued. As of December 31, 2007, Mr. Herda's accrued unpaid executive
      compensation was $523,646.





(2)
      Kenneth Faith joined the Company in the last quarter of fiscal year 2006. Kenneth
      Faith, is Nuclear Solutions, Inc. Chief Financial and Principal Accounting
      Officer did not receive a salary during fiscal year ending December 31, 2007.
      During 2007, the board of directors did authorize the issuance of 600,000 shares
      common stock valued at $108,000. The shares have not been issued. The board
      authorized setting Mr. Faith’s annual base salary at $225,000 commencing March
      2, 2008.





(3) Jack
      Young, Vice President of Nuclear Solutions, Inc. and President of Fuel
      Frontiers, Inc., a company subsidiary, did not receive a salary during fiscal
      year ending December 31, 2007. During 2007, the board of directors authorized
      the issuance of 400,000 shares to Mr. Young valued at $72,000. The board of
      directors authorized setting Mr. Young’s annual base salary at $185,000 as
      President of Future Fuels, Inc. commencing March 2, 2008.





GRANTS
      OF
      PLAN-BASED AWARDS We made no grants from plans to any executive officer during
      the fiscal year ended December 31, 2007.


27


OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END There were no outstanding equity awards to
      any
      executive officer at the end of the fiscal year ended December 31, 2007. The
      grants had been awarded, however, the shares had not been issued and delivered
      as of December 31, 2007.





**Grants
      of Plan-Based Awards**





We
      made
      three common stock grants of restricted stock to Patrick Herda, Kenneth Faith
      and Jack Young during the fiscal year ending December 31, 2007.





**Outstanding
      Equity Awards at Fiscal Year-End**





There
      were no outstanding equity awards to any executive officer at the end of the
      fiscal year ended December 31, 2007.


**Director
        Compensation**
 
 The
        Company has not established any policy concerning director compensation.
        However, the board of directors authorized paying John Powers, a member of
        our
        board of directors, 150,000 shares,
        valued at $26,250 as
        annual
        director compensation. Presently, Mr. Powers is the only director who will
        receive annual director compensation.
 
 **DIRECTOR
        INDEPENDENCE**
 
 ***Director
        Independence***
 
 The
        Board
        has determined that we do not have a majority of independent directors as
        that
        term is defined under Rule 4200(a) (15) of the Nasdaq Marketplace Rules,
        even
        though such definition does not currently apply to us, because we are not
        listed
        on Nasdaq.
 
 **MEETINGS
        AND COMMITTEES OF THE BOARD OF DIRECTORS**
 
 We
        presently have no Board committees. Until further determination, the full
        Board
        will undertake the duties of the audit committee, compensation committee
        and
        nominating committee. We do not currently have an “audit committee financial
        expert” since we currently do not have an audit committee in place.
  The
        Company does not currently have a process for security holders to send
        communications to the Board.


**Item
      12. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





Table
      1
      lists the persons who are known to the Company to be the owners of more than
      five percent of the Company’s equity shares according to the Company’s records
      as of December 31, 2007. Beneficial Ownership of more than 5% based on
      73,734,095 common shares.





Beneficial
      Ownership of 5%.


28


(a)
      Our
      stock transfer agency records do not list any shareholders owning five percent
      or more of our common stock.





(b)
      Security Ownership of Management. Based on 73,734,095 shares as set forth in
      (a)
      above as of December 31, 2007.





Table
      2.





(1)
            
            (2)
            
            (3)
            
            (4)Title
                of Class
            
            Address
            
            Amount and Nature
            
            Percent of
              ClassCommon
                StockPatrick
                Herda
            
            
            5505
                Connecticut Ave NW
            
            
            4,135,000
            (1)
            
            4.88
            %Suite
                191Washington,
                DC 20015Kenneth
                Faith
            
            
            5505
                Connecticut Ave., NW
            
            
            775,000
            (2)
            
            0.91
            %Suite
                191Washington,
                D.C. 20015John
                Powers
            
            
            5505
                Connecticut Ave NW
            
            
            420,000
            (3)
            
            0.50
            %Suite
                191Washington,
                DC 20015Jack
                Young
            
            
            5505
                Connecticut Ave NW
            
            
            400,000
            (4)
            
            0.47
            %Suite
                191Washington,
                DC 20015Total
            
            
            
            
            
            5,730,000
            
            
            6.76
            %




(1)
        3,500,000 shares have been authorized for issuance, but have not yet been
        issued.
 (2)
        600,000 shares have been authorized for issuance, but have not yet been
        issued.
 (3)
        150,000 shares have been authorized for issuance, but have not yet been
        issued.
 (4)
        400,000 shares have been authorized for issuance, but have not yet been
        issued.


(c)
      Changes in Control. To management’s knowledge, there are no arrangements which
      may result in a change in control.





**Item
      13. Certain Relationships and Related Transactions and Director
      Independence.**





(a)
            Transactions
                with Management and Others.





Except
      as
      otherwise set forth in this report, no member of management, executive officer,
      director, nominee for a director or security holder who is known to the Company
      to own of record or beneficially more than five percent of any class of the
      Company’s voting securities, nor any member of the immediate family of any of
      the foregoing persons, has had any direct or indirect material interest in
      any
      transaction to which the Company was or is to be a party.





On
      March
      2, 2008, the board of directors established the following annual base salaries
      for its principal executive officers. There are no employment agreements between
      the company and any of its officers.





Patrick
      Herda, Nuclear Solutions,Inc. President and Chief Executive Officer’s base
      salary for the fiscal year ending December 31, 2007 was $55,000. During 2007,
      the board of directors authorized the issuance of 3,500,000 shares of common
      stock valued at $630,000. The shares have not been issued. The board authorized
      increasing Mr. Herda’s base annual salary to $250,000 commencing March 2, 2008.





Kenneth
      Faith, Nuclear Solutions, Inc. Chief Financial and Principal Accounting Officer
      did not receive a salary during fiscal year ending December 31, 2007. During
      2007, the board of directors did authorize the issuance of 600,000 shares common
      stock valued at $108,000. The shares have not been issued. The board authorized
      setting Mr. Faith’s annual base salary at $225,000 commencing March 2,
      2008.


29


Jack
      Young, Vice President of Nuclear Solutions, Inc. and President of Fuel
      Frontiers, Inc., a company subsidiary, did not receive a salary during fiscal
      year ending December 31, 2007. During 2007, the board of directors authorized
      the issuance of 400,000 shares to Mr. Young valued at $72,000. The board of
      directors authorized setting Mr. Young’s annual base salary at $185,000 as
      President of Future Fuels, Inc. commencing March 2, 2008.





During
      2007, the board of directors authorized the issuance of 150,000 shares to John
      Powers, member of the board of directors, valued at $27,000. The shares have
      not
      been issued.


On
        March
        2, 2008, the Board of Directors authorized paying John Powers, a member of
        our
        board of directors, 150,000 shares valued at $26,250 as annual director
        compensation.
 On
        June
        4, 2007 the Company received $12,000 pursuant to a promissory note payable
        to
        John Powers, a director, bearing interest at 12% per year and maturing on
        June
        4, 2008. The note is convertible into common stock at the rate of 50% of
        market
        value. We have recorded a beneficial conversion feature in the amount of
        $12,000. The discount is being amortized over the term of the debt, through
        June
        4, 2008. Amortization of debt discount for the year ended December 31, 2007
        was
        $6,884.





(b)
            Certain
                Business Relationships.





Except
      as
      set forth in (a) above, and to the knowledge of management, or as previously
      filed in the Company’s periodic reports, no director or nominee for director is
      or has been related to any person who has been a party to any transaction with
      the Company.





(c)
            Indebtedness
                of Management.





No
      member
      of the Company’s management is or has been indebted to the Company since the
      beginning of its last fiscal year.





(d)
            Transactions
                with Promoters.None.




**Item
      14.**  **Principal
      Accounting Fees and Services.**




The
        Company paid or accrued the following fees in each of the prior two fiscal
        years
        to its principal accountant during 2007 and 2006, RBSM, LLP as our auditor
        for
        our fiscal year ending December 31, 2007.


Year End 12-31-07
            
            Year End
                12-31-06Audit
                Fees
            
            $
            52,622
            
            $
            57,040Audit-related
                Fees
            
            
            -0-
            
            
            -0-Tax
                Fees
            
            
            -0-
            
            
            -0-All
                other fees
            
            
            -0-
            
            
            -0-Total
                Fees
            
            $
            52,622
            
            $
            57,040





AUDIT
      FEES. Audit fees consist of fees billed for professional services rendered
      for
      the audit of the Company's consolidated financial statements and review of
      the
      interim consolidated financial statements included in quarterly reports and
      services that are normally provided by the Company's principal accountants
      in
      connection with statutory and regulatory filings or engagements.





AUDIT-RELATED
      FEES. Audit related fees consist of fees billed for assurance and related
      services that are reasonably related to the performance of the audit or review
      of the Company's consolidated financial statements and are not reported under
      "Audit Fees." There were no Audit-Related services provided in fiscal 2007
      or
      2006.





TAX
      FEES.
      Tax fees are fees billed for professional services for tax compliance, tax
      advice and tax planning.





ALL
      OTHER
      FEES. All other fees include fees for products and services other than the
      services reported above. There were no management consulting services provided
      in fiscal 2007 or 2006.


Policy
      on
      Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
      Independent Auditors


30


The
      Company currently does not have a designated Audit Committee, and accordingly,
      the Company's Board of Directors' policy is to pre-approve all audit and
      permissible non-audit services provided by the independent auditors. These
      services may include audit services, audit-related services, tax services and
      other services. Pre-approval is generally provided for up to one year and any
      pre-approval is detailed as to the particular service or category of services
      and is generally subject to a specific budget. The independent auditors and
      management are required to periodically report to the Company's Board of
      Directors regarding the extent of services provided by the independent auditors
      in accordance with this pre-approval, and the fees for the services performed
      to
      date. The Board of Directors may also pre-approve particular services on a
      case-by-case basis.





To
      our
      knowledge, the Company's principal accountant during 2007 did not engage any
      other persons or firms other than the principal accountant's full-time,
      permanent employees.




**Item
      15.**  **Exhibits
      and Financial Statement Schedules**





(a)
                Exhibits*3.1
            Certificate
                of Amendment of Articles of Incorporation of Stock Watch Man, Inc.
                filed
                Secretary of State Nevada on September 12, 2001 changing corporate
                name to
                Nuclear Solutions, Inc.*3.2
            Articles
                of Incorporation of Stock Watch Man, Inc.*3.3
            Bylaws
                of Nuclear Solutions, aka, Stock Watch Man, Inc.*20.1
            Code
                of Ethical Conduct21
            List
                of subsidiaries23.1
            Consent
                of RBSM LLP31.1
            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.





*
      Previously filed.




31




SIGNATURES





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




Dated:
      April 15, 2008





Nuclear
      Solutions, Inc.




/s/
                Patrick Herda
            
            /s/
                Kenneth FaithBy:
                Patrick Herda
            
            By:
                Kenneth FaithTitle:
                CEO
            
            Title:
                CFO





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





/s/
                Patrick Herda
            
            April
                15, 2008By:
                Patrick HerdaTitle:
                CEO, Director/s/
                  Kenneth Faith
            
            April
                15, 2008By:
                Kenneth FaithTitle:
                Director




32






SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
          D.C. 20549
 
 FINANCIAL
          STATEMENTS AND SCHEDULES
 DECEMBER
          31, 2007
 NUCLEAR
          SOLUTIONS, INC.AND SUBSIDIARIES
 
 Index
          to
          Financial Statements
 
 Page
                    No.Report
                    of Independent Registered Public Accounting Firm
                F-2Consolidated
                    Balance Sheet at December 31, 2007 and 2006
                F-3Consolidated
                    Statements of Losses for the years ended December 31, 2007, 2006
                    and
                    2005
                F-4Consolidated
                    Statements of Deficiency in Stockholders' Equity for the years
                    ended
                    December 31, 2007, 2006 and 2005
                F-5Consolidated
                    Statements of Cash Flows for the years ended December 31, 2007,
                    2006 and
                    2005
                F-6Notes
                    to Consolidated Financial Statements
                F-7
                    to F-19
   F-1
 RBSM
              LLP
 Certified
              Public Accountants
 
 REPORT
              OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
              the Board of Directors
 Nuclear
              Solutions, Inc.
 Washington,
              D.C.
 
 We
              have audited the accompanying consolidated balance sheets of Nuclear Solutions,
              Inc. and subsidiary (the "Company"), as of December 31, 2007 and 2006
              and the
              related consolidated statements of losses, deficiency in stockholders'
              equity,
              and cash flows for each of the three years in the period ended December
              31,
              2007. These financial statements are the responsibility of the company's
              management. Our responsibility is to express an opinion on these financial
              statements based upon our audits.
 
 We
              conducted our audits in accordance with standards of the Public Company Accounting
              Oversight Board (United States of America). Those standards require that
              we plan and perform the audit to obtain reasonable assurance about
              whether the
              financial statements are free of material misstatements. An audit includes examining,
              on a test basis, evidence supporting the amounts and disclosures in the
              financial statements. An audit also includes assessing the accounting principles
              used and significant estimates made by management, as well as evaluating
              the overall financial statement presentation. We believe our audits provide
              a reasonable basis for our opinion.
 
 In
              our opinion, the consolidated financial statements referred to above
              present fairly,
              in all material respects, the consolidated financial position of the Company
              as of December 31, 2007 and 2006, and the results of its operations
              and its cash
              flows for each of the three years in the period ended December 31,
              2007,
              inconformity with accounting principles generally accepted in the United
              States
              of America.
 
 The
              accompanying consolidated financial statements have been prepared assuming the
              Company will continue as a going concern. As discussed in Note 3 to
              the consolidated
              financial statements, the Company has suffered recurring losses from
              operations. This raises substantial doubt about its ability to continue
              as a
              going concern. Management's plans in regard to these matters are also described
              in Note 3. The financial statements do not include any adjustments that
              might result from the outcome of this uncertainty.
 
 /s/ RBSM
                      LLPRBSM
                      LLPCertified
                      Public
                      Accountants
  New
              York, NY
 April
              11, 2008
  F-2
 NUCLEAR
            SOLUTIONS ,INC
 AND
            SUBSIDIARIES
 CONSOLIDATED
            BALANCE SHEETS
  December 31,
                  
                  December 31,2007
                  
                  2006ASSETSCurrent
                      assets:Cash
                  
                  $
                  192,981
                  
                  $
                  31,451Prepaid
                      expenses
                  
                  
                  112,900
                  
                  
                  9,200Total
                      current assets
                  
                  
                  305,881
                  
                  
                  40,651Property
                      and equipment, net of accumulated depreciation of $28,019 and
                      $21,718,
                      respectively (Note 5)
                  
                  
                  7,625
                  
                  
                  13,926Other
                      assets
                  
                  
                  1,800
                  
                  
                  9,300Total
                      assets
                  
                  $
                  315,306
                  
                  $
                  63,877LIABILITIES
                      AND DEFICIENCY IN STOCKHOLDERS' EQUITYCurrent
                      liabilities:Accounts
                      payable and accrued expenses
                  
                  $
                  3,938,962
                  
                  $
                  3,179,366Accrued
                      executive compensation (Note 6)
                  
                  
                  995,112
                  
                  
                  1,033,392Convertible
                      notes payable - related parties, net of discount of $5,115
                      and $0,
                      respectively (Note 8)
                  
                  
                  45,885
                  
                  
                  39,000Convertible
                      notes payable - other, net of discount of $233,168 and and
                      $0,
                      respectively (Note 7)
                  
                  
                  498,055
                  
                  
                  903,711Total
                      current liabilities
                  
                  
                  5,478,014
                  
                  
                  5,155,469Derivative
                      liability (Note 7)
                  
                  
                  13,311
                  
                  
                  -Total
                      liabilities
                  
                  
                  5,491,325
                  
                  
                  5,155,469Commitments
                      and contingenciesDeficiency
                      in stockholders' equity (Note 9)Preferred
                      stock, $0.0001 par value; 10,000,000 shares authorized, no
                      shares issued
                      and outstanding
                  
                  
                  -
                  
                  
                  -Common
                      stock, $0.0001 par value; 100,000,000 shares authorized, 73,734,095
                      and
                      53,665,644 issued and outstanding, respectively
                  
                  
                  7,374
                  
                  
                  5,367Additional
                      paid-in capital
                  
                  
                  16,802,581
                  
                  
                  10,927,066Deferred
                      equity based expense
                  
                  
                  (1,058,503
                  )
                  
                  (605,954
                  )Accumulated
                      deficit
                  
                  
                  (20,927,471
                  )
                  
                  (15,418,071
                  )Total
                      deficiency in stockholders' equity
                  
                  
                  (5,176,019
                  )
                  
                  (5,091,592
                  )Total
                      liabilities and deficiency in stockholders' equity
                  
                  $
                  315,306
                  
                  $
                  63,877
 
 The
            accompanying notes are an integral part of the consolidated financial
            statements.
 
 F-3
 NUCLEAR
          SOLUTIONS, INC.


AND
      SUBSIDIARIES


CONSOLIDATED
      STATEMENTS OF LOSSES





For
                the Years Ended December 31,2007
            
            2006
            
            2005Revenue
            
            $
            100,000
            
            $
            223,000
            
            $
            302,500Executive
                compensation
            
            
            892,000
            
            
            110,000
            
            
            432,500Consulting
            
            
            2,856,713
            
            
            2,635,488
            
            
            2,917,791Legal
                and professional fees
            
            
            975,419
            
            
            1,085,157
            
            
            551,565General
                and administrative expenses
            
            
            165,296
            
            
            137,477
            
            
            104,817Depreciation
                and amortization
            
            
            6,301
            
            
            5,812
            
            
            5,4834,895,729
            
            
            3,973,934
            
            
            4,012,156Loss
                from operations
            
            
            (4,795,729
            )
            
            (3,750,934
            )
            
            (3,709,656
            )Other
                expenseInterest
                expense
            
            
            (634,082
            )
            
            (134,144
            )
            
            (110,614
            )Finance
                costs
            
            
            -
            
            
            -
            
            
            (60,000
            )Change
                in fair value of derivative liability
            
            
            (79,589
            )
            
            -
            
            
            -Loss
                before provision for income taxes
            
            
            (5,509,400
            )
            
            (3,885,078
            )
            
            (3,880,270
            )Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            -Net
                loss
            
            $
            (5,509,400
            )
            $
            (3,885,078
            )
            $
            (3,880,270
            )Basic
                and diluted loss per share
            
            $
            (0.09
            )
            $
            (0.08
            )
            $
            (0.10
            )Weighted
                average number of common shares outstanding, basic and
                diluted
            
            
            61,999,349
            
            
            49,474,808
            
            
            40,542,060





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


F-4


NUCLEAR
      SOLUTIONS, INC


AND
      SUBSIDIARIES


CONSOLIDATED
      STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY


FOR
      THE
      PERIOD JANUARY 1, 2005 TO DECEMBER 31, 2007


Total DeficiencyCommon Stock
              
              Additional
              
              Deferred Equity
              
              Accumulated
              
              in Stockholders'Shares
              
              Amount
              
              Paid - In Capital
              
              Based Expense
              
              Deficit
              
              EquityBalance,
                  January 1, 2005
              
              
              36,598,646
              
              $
              3,660
              
              $
              4,786,346
              
              $
              (385,287
              )
              $
              (7,652,723
              )
              $
              (3,248,004
              )Shares
                  issued for services
              
              
              4,402,940
              
              
              440
              
              
              2,689,467
              
              
              (930,245
              )
              
              -
              
              
              1,759,662Beneficial
                  conversion discount- convertible note and warrants
              
              
              -
              
              
              -
              
              
              60,000
              
              
              -
              
              
              -
              
              
              60,000Amortization
                  of deferred compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              951,642
              
              
              -
              
              
              951,642Shares
                  issued for accrued expenses
              
              
              2,510,223
              
              
              251
              
              
              463,189
              
              
              -
              
              
              -
              
              
              463,440Intrinsic
                  value of options issued to a director
              
              
              -
              
              
              -
              
              
              162,500
              
              
              -
              
              
              -
              
              
              162,500Shares
                  issued for payment of debt
              
              
              454,054
              
              
              46
              
              
              67,154
              
              
              -
              
              
              -
              
              
              67,200Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,880,270
              )
              
              (3,880,270
              )Balance,
                  December 31, 2005
              
              
              43,965,863
              
              
              4,397
              
              
              8,228,656
              
              
              (363,890
              )
              
              (11,532,993
              )
              
              (3,663,830
              )Shares
                  issued for services
              
              
              1,446,099
              
              
              145
              
              
              1,104,570
              
              
              -
              
              
              -
              
              
              1,104,715Shares
                  issued for accrued expenses
              
              
              2,192,779
              
              
              219
              
              
              1,077,226
              
              
              -
              
              
              -
              
              
              1,077,445Shares
                  issued for payment of debt
              
              
              4,989,545
              
              
              499
              
              
              460,721
              
              
              -
              
              
              -
              
              
              461,220Stock
                  issued upon exercise of options
              
              
              250,000
              
              
              25
              
              
              24,975
              
              
              -
              
              
              -
              
              
              25,000Stock
                  issued upon cashless exercise of warants
              
              
              821,358
              
              
              82
              
              
              (82
              )
              
              -
              
              
              -
              
              
              -Beneficial
                  conversion feature
              
              
              -
              
              
              -
              
              
              31,000
              
              
              -
              
              
              -
              
              
              31,000Deferred
                  compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,562,525
              )
              
              -
              
              
              (1,562,525
              )Amortization
                  of deferred compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              1,320,461
              
              
              -
              
              
              1,320,461Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,885,078
              )
              
              (3,885,078
              )Balance
                  December 31, 2006
              
              
              53,665,644
              
              
              5,367
              
              
              10,927,066
              
              
              (605,954
              )
              
              (15,418,071
              )
              
              (5,091,592
              )Shares
                  issued for services
              
              
              5,813,762
              
              
              581
              
              
              2,611,838
              
              
              -
              
              
              -
              
              
              2,612,419Shares
                  issued for accrued expenses
              
              
              2,087,688
              
              
              209
              
              
              1,382,097
              
              
              -
              
              
              -
              
              
              1,382,306Shares
                  issued for payment of debt and Interest
              
              
              12,167,001
              
              
              1,217
              
              
              1,037,822
              
              
              -
              
              
              -
              
              
              1,039,039Beneficial
                  conversion feature
              
              
              -
              
              
              -
              
              
              736,371
              
              
              -
              
              
              -
              
              
              736,371Reclassification
                  of derivative liability
              
              
              
              
              
              
              
              
              107,387
              
              
              
              
              
              
              
              
              107,387Deferred
                  compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,589,255
              )
              
              -
              
              
              (2,589,255
              )Amortization
                  of deferred compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              2,136,706
              
              
              -
              
              
              2,136,706Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (5,509,400
              )
              
              (5,509,400
              )Balance
                  December 31, 2007
              
              
              73,734,095
              
              $
              7,374
              
              $
              16,802,581
              
              $
              (1,058,503
              )
              $
              (20,927,471
              )
              $
              (5,176,019
              )





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


F-5


NUCLEAR
      SOLUTIONS ,INC


AND
      SUBSIDIARIES


CONSOLIDATED
      STATEMENT OF CASH FLOWS





For
                the Years Ended December 31,2007
            
            2006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (5,509,400
            )
            $
            (3,885,078
            )
            $
            (3,880,270
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            6,302
            
            
            5,812
            
            
            5,483Amortization
                  of debt discount - beneficial conversion feature ofconvertible
                  note and warrants
            
            
            539,197
            
            
            31,000
            
            
            60,000Change
                in fair value of derivative liability
            
            
            79,589
            
            
            -Stock
                and warrants issued for services
            
            
            4,749,125
            
            
            2,425,176
            
            
            3,337,244Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            -
            
            
            60,000
            
            
            (60,000
            )Prepaid
                Expenses
            
            
            (103,700
            )
            
            (9,200
            )
            
            -Other
                Assets
            
            
            7,500
            
            
            (7,500
            )
            
            -Accounts
                payable and accrued expenses
            
            
            (346,283
            )
            
            1,349,368
            
            
            241,408Accrued
                executive compensation
            
            
            (38,280
            )
            
            (19,393
            )
            
            195,236Net
                cash used in operating activities
            
            
            (615,950
            )
            
            (49,815
            )
            
            (100,899
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Purchases
                of property and equipment
            
            
            -
            
            
            (7,430
            )
            
            -Net
                cash used in investing activities
            
            
            -
            
            
            (7,430
            )
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from issuance of debt
            
            
            777,480
            
            
            41,000
            
            
            (12,425
            )Proceeds
                fro sale of common stock
            
            
            -
            
            
            25,000
            
            
            60,000Net
                cash provided by financing activities
            
            
            777,480
            
            
            66,000
            
            
            47,575Net
                increase (decrease) in cash
            
            
            161,530
            
            
            8,755
            
            
            (53,324
            )Cash,
                beginning of period
            
            
            31,451
            
            
            22,696
            
            
            76,020Cash,
                end of period
            
            $
            192,981
            
            $
            31,451
            
            $
            22,696Supplemental
                disclosures:Cash
                paid for:InterestIncome
                taxesNon-cash
                investing and financial activities:Amortization
                  of debt discount - beneficial conversion feature ofconvertible
                  note and warrants
            
            $
            522,866
            
            $
            31,000
            
            $
            60,000Payment
                of debt and interest with common stock
            
            $
            1,039,039
            
            $
            461,220Beneficial
                conversion discount
            
            $
            777,480
            
            $
            31,000Payment
                of accrued expenses with common stock
            
            $
            1,382,306
            
            $
            1,077,445
            
            $
            67,200





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


F-6




**NUCLEAR
      SOLUTIONS, INC.**


AND
      SUBSIDIARIES




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


DECEMBER
      31, 2007




**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. Prior to April 1, 2005 the Company was considered to be a
      development stage enterprise. During the second quarter of 2005, planned
      operations commenced and the Company began generating significant
      revenue.




On
      September 2, 2005 the Company formed a wholly owned subsidiary, Fuel Frontiers
      Inc., formally, Future Fuels, Inc., which has had minimal operations through
      December 31, 2007.




On
      July
      31, 2006 the company formed a wholly owned subsidiary, Liquidyne Fuels, which
      has had no activity through December 31, 2007.




The
      consolidated financial statements include the accounts of the Company and its
      subsidiaries. All significant intercompany transactions and balances have been
      eliminated in the 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.




**Business
      Concentration**




For
      the
      years ended December 31, 2007, 2006 and 2005, we earned all of our revenue
      from
      one customer.




**NOTE
      2 - ACCOUNTING POLICIES AND PROCEDURES**




**Cash
      and Cash Equivalents**




For
      the
      purpose of the statements of cash flows, all highly liquid investments with
      an
      original maturity of three months or less are considered to be cash equivalents.
      There are no cash equivalents as of December 31, 2007 or 2006.




**Concentrations
      of Credit Risk**




Financial
      instruments and related items which potentially subject the Company to
      concentrations of credit risk consist primarily of cash. The Company places
      its
      cash and temporary cash investments with credit quality institutions and has
      not
      experienced any losses in its accounts. At December 31, 2007, deposits exceeded
      federally insured limits by approximately $93,000.




**Property
      and Equipment**




The
      cost
      of furniture and equipment is depreciated over the estimated useful life of
      the
      assets utilizing the straight-line method of depreciation based on estimated
      useful lives of five years.


F-7




When
      assets are retired or otherwise disposed of, the cost and related accumulated
      depreciation are removed and any resulting gain or loss is
      recognized.




**Intangible
      and Long-lived Assets**




The
      Company follows Statement of Financial Accounting Standards ("SFAS") No. 144,
      "Accounting for Impairment of Disposal of Long-Lived Assets", which established
      a "primary asset" approach to determine the cash flow estimation period for
      a
      group of assets and liabilities that represents the unit of accounting for
      a
      long lived asset to be held and used. Long-lived assets to be held and used
      are
      reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of an asset may not be recoverable. The carrying amount
      of a long-lived asset is not recoverable if it exceeds the sum of the
      undiscounted cash flows expected to result from the use and eventual disposition
      of the asset. Long-lived assets to be disposed of are reported at the lower
      of
      carrying amount or fair value less cost to sell. There was no of impairment
      expense related to long-lived assets during the years ended December 31, 2007,
      2006 or 2005.




**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 superceded
      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.




**Advertising
      Costs**




The
      Company expenses all costs of advertising as incurred. There were no advertising
      costs included in general and administrative expenses for the years ended
      December 31, 2007, 2006 or 2005.




**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.


F-8




**Fair
      Value of Financial Instruments**




The
      carrying amounts of certain financial instruments, including cash, accounts
      payable and accrued expenses and notes payable approximate their fair value
      as
      of December 31, 2007 and 2006 because of the relatively short-term maturity
      of
      these instruments.




**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
      December 31, 2007, 2006 and 2005, the Company had 9,324,983, 10,806,455 and
      15,498,865 potentially dilutive securities, respectively.




**Income
      Taxes**




The
      Company accounts for income taxes under SFAS No. 109, "Accounting for Income
      Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and
      liabilities are recognized for the future tax consequences attributable to
      differences between the financial statement carrying amounts of existing assets
      and liabilities and their respective tax basis. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled. Under Statement 109, the effect on deferred tax assets
      and
      liabilities of a change in tax rates is recognized in income in the period
      that
      includes the enactment date.




In
      July
      2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes-an
      interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
      recognition threshold and measurement of a tax position taken on a tax return.
      FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN
      48
      also requires expanded disclosure with respect to the uncertainty in income
      taxes.




**Stock
      Based Compensation**




On
      January 1, 2006, we adopted the fair value recognition provisions of Financial
      Accounting Standards Board ("FASB") Statement of Financial Accounting Standards
      ("SFAS") No. 123(R), Accounting for Stock-Based Compensation, to account for
      compensation costs under our stock option plans. We previously utilized the
      intrinsic value method under Accounting Principles Board Opinion No. 25,
      Accounting for Stock Issued to Employees (as amended) ("APB 25"). Under the
      intrinsic value method prescribed by APB 25, no compensation costs were
      recognized for our employee stock options because the option exercise price
      equaled the market price on the date of grant. Prior to January 1, 2006, we
      only
      disclosed the pro forma effects on net income and earnings per share as if
      the
      fair value recognition provisions of SFAS 123(R) had been utilized.




In
      adopting SFAS No. 123(R), we elected to use the modified prospective method
      to
      account for the transition from the intrinsic value method to the fair value
      recognition method. Under the modified prospective method, compensation cost
      is
      recognized from the adoption date forward for all new stock options granted
      and
      for any outstanding unvested awards as if the fair value method had been applied
      to those awards as of the date of grant. We had no outstanding unvested awards
      at the adoption date and we had no outstanding unvested awards during the 2005
      comparative period.




The
      Company uses the fair value method for equity instruments granted to
      non-employees and uses the Black Scholes model for measuring the fair value.
      The
      stock based fair value compensation is determined as of the date of the grant
      or
      the date at which the performance of the services is completed (measurement
      date) and is recognized over the periods in which the related services are
      rendered.


F-9




**Pro
      Forma Information**




EMPLOYEE
      AND DIRECTOR COMMON SHARE PURCHASE OPTIONS--Pro forma information regarding
      the
      effects on operations of employee and director common share purchase options
      as
      required by SFAS No. 123, "Accounting for Stock-Based Compensation" and SFAS
      No.
      148, "Accounting for Stock-Based Compensation--Transition and Disclosure--an
      amendment of FASB Statement No. 123" has been determined as if the Company
      had
      accounted for those options under the fair value method. Pro forma information
      is computed using the Black-Scholes method at the date of grant of the options
      based on the following assumptions: (1) risk free interest rate of 3.75%; (2)
      dividend yield of 0%; (3) volatility factor of the expected market price of
      our
      common stock of 103%; and (4) an expected life of the options of 1 year. The
      foregoing option valuation model requires input of highly subjective
      assumptions. Because common share purchase options granted to employees and
      directors have characteristics significantly different from those of traded
      options, and because changes in the subjective input assumptions can materially
      affect the fair value of estimate, the existing model does not in the opinion
      of
      our management necessarily provide a reliable single measure of fair value
      of
      common share purchase options we have granted to our employees and
      directors.




Pro
      forma
      information relating to employee and director common share purchase options
      for
      the year ended December 31, 2005 is as follows:





Net
                loss as reported
            
            $
            (3,880,269
            )Current
                period expense calculated under APB 25
            
            
            162,500Stock
                compensation calculated under SFAS 123
            
            
            (163,953
            )Pro
                forma net loss
            
            $
            (3,881,722
            )Basic
                and diluted historical loss per share
            
            $
            (0.09
            )Pro
                forma basic and diluted loss per share
            
            $
            (0.09
            )




**Liquidity**




As
      shown
      in the accompanying financial statements, the Company has incurred net losses
      of
      $5,509,400, $3,885,078 and $3,880,270 during the years ended December 31, 2007,
      2006 and 2005, respectively. The Company's current liabilities exceeded its
      current assets by $5,172,133 as of December 31, 2007. Consequently, its
      operations are subject to all risks inherent in the establishment of a new
      business enterprise.




**New
      Accounting Pronouncements**





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose
      to measure many financial instruments, and certain other items, at fair value. SFAS
      159
      applies to reporting periods beginning after November 15, 2007. The adoption
      of
      SFAS 159 is not expected to have a material impact on the Company’s financial
      condition or results of operations.





In
      December 2007, the FASB issued SFAS No. 141(R) “ *Business
      Combinations* ”,
      (“SFAS
      141(R)”). This Statement replaces the original FASB Statement No. 141. This
      Statement retains a fundamental requirements in Statement 141 that the
      acquisition method of accounting (which Statement 141 called the purchase
      method) be used for all business combinations and for an acquirer to be
      identified for each business combination. The objective of this SFAS 141(R)
      is
      to improve the relevance, and comparability of the information that a reporting
      entity provides in its financial reports about a business combination and its
      effects. To accomplish that, SFAS 141(R) establishes principles and requirements
      for how the acquirer: (1) Recognizes and measurers in its financial statements
      the identifiable assets acquired, the liabilities assumed, and any
      noncontrolling interest in the acquiree. (2) Recognized and measurer the
      goodwill acquired in the business combination or a gain from a bargain purchase.
      (3) Determines what information to disclose to enable users of the financial
      statements to evaluate the nature and financial effects of the business
      combination. This Statement apples prospectively to business combinations for
      which the acquisition date is on of after the beginning of the first annual
      reporting period beginning on or after December 15, 2008 and may not be applied
      before that date. We do not expect the new standard to have any material impact
      on our financial statements.


F-10





In
      December 2007, the FASB issued SFAS No. 160 “ *Noncontrolling
      Interests in Consolidated Financial Statements - an amendment of ARB No. 51”.* (“SFAS
      160”). This Statement amends the original Accounting Review Board (ARB) NO. 51
      “Consolidated Financial Statements” to establish accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. It clarifies that a noncontrolling interest
      in
      a subsidiary is an ownership interest in the consolidated entity that should
      be
      reported as equity in the consolidated financial statements. This Statement
      is
      effective for fiscal years and interim periods within those fiscal years,
      beginning on or after December 15, 2008 and may not be applied before that
      date.
      We do not currently expect the new standard to have any material impact on
      our
      financial statements.




**Reclassifications**




Certain
      items in the 2006 financial statements have been reclassified to conform to
      the
      current period presentation. The reclassifications had no effect on results
      of
      operations or cash flow.




**NOTE
      3 - GOING CONCERN**




The
      accompanying 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 financial statements, the Company has a net loss of $5,509,400
      for the year ended December 31, 2007, and a working capital deficiency of
      $5,172,133 and a stockholders' deficiency of $5,176,019 at December 31, 2007.
      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 financial statements do not include any adjustments
      that
      might be necessary if the Company is unable to continue as a going
      concern.




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. The accompanying financial statements do
      not
      include any adjustments that might result should the Company be unable to
      continue as a going concern.




**NOTE
      4 - INCOME TAXES**




The
      Company accounts for income taxes under SFAS No. 109, which requires use of
      the
      liability method. SFAS No. 109 provides that deferred tax assets and liabilities
      are recorded based on the differences between the tax bases of assets and
      liabilities and their carrying amounts for financial reporting purposes,
      referred to as temporary differences. Deferred tax assets and liabilities at
      the
      end of each period are determined using the currently enacted tax rates applied
      to taxable income in the periods in which the deferred tax assets and
      liabilities are expected to be settled or realized.


F-11




During
      the year ended December 31, 2007, the Company adopted Financial Accounting
      Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in
      Income Taxes" (FIN 48), which supplements SFAS No. 109, "Accounting for Income
      Taxes," by defining the confidence level that a tax position must meet in order
      to be recognized in the financial statements. The Interpretation requires that
      the tax effects of a position be recognized only if it is "more-likely-than-not"
      to be sustained based solely on its technical merits as of the reporting date.
      The more-likely-than-not threshold represents a positive assertion by management
      that a company is entitled to the economic benefits of a tax position. If a
      tax
      position is not considered more-likely- than-not to be sustained based solely
      on
      its technical merits no benefits of the tax position are to be recognized.
      Moreover, the more-likely-than-not threshold must continue to be met in each
      reporting period to support continued recognition of a benefit. With the
      adoption of FIN 48, companies are required to adjust their financial statements
      to reflect only those tax positions that are more-likely-than-not to be
      sustained. Any necessary adjustment would be recorded directly to retained
      earnings and reported as a change in accounting principle.





As
      of
      December 31, 2007 we have fully allowed for any deferred tax assets as
      management has determined that it is more-likely-than-not that we will no
      sustain the use of our net operating loss carryforwards and have established
      a
      valuation allowance for them. The valuation allowance increased by $797,000
      and
      $919,000 during the years ended December 31, 2007 and 2006,
      respectively.





Significant
      components of the Company's deferred income tax assets at December 31, 2007
      and
      2006 are as follows:





2007
            
            2006Deferred
                income tax asset:Net
                operating loss carryforward
            
            $
            4,954,000
            
            $
            4,157,000Valuation
                allowance
            
            
            (4,954,000
            )
            
            (4,157,000
            )Net
                deferred tax asset
            
            $
            -
            
            $
            -





The
      provision for income taxes differs from the amount computed by applying the
      statutory federal income tax rate to income before provision for income taxes.
      The sources and tax effects of the differences are as follows:





2007
            
            2006
            
            2005U.S.
                federal statutory rate
            
            
            -35
            %
            
            -35
            %
            
            -35
            %Valuation
                allowance
            
            
            35
            %
            
            35
            %
            
            35
            %Total
            
            
            -
            
            
            -
            
            
            -




F-12





As
      of
      December 31, 2007, the Company has a net operating loss carry forward, subject
      to limitations of Section 382 of the Internal Revenue Code, as amended, as
      follows:





Year
            
            Amount
            
            Expiration2000
            
            
            28,719
            
            
            20202001
            
            
            710,858
            
            
            20212002
            
            
            1,902,582
            
            
            20222003
            
            
            1,663,209
            
            
            20232004
            
            
            1,474,681
            
            
            20242005
            
            
            3,471,737
            
            
            20252006
            
            
            2,625,635
            
            
            20262007
            
            
            2,278,195
            
            
            2027




Upon
      adoption of FIN 48 as of January 1, 2007, the Company had no gross unrecognized
      tax benefits that, if recognized, would favorably affect the effective income
      tax rate in future periods. At December 31, 2007 the amount of gross
      unrecognized tax benefits before valuation allowances and the amount that would
      favorably affect the effective income tax rate in future periods after valuation
      allowances were $0. These amounts consider the guidance in FIN 48-1, "Definition
      of Settlement in FASB Interpretation No. 48". The Company has not accrued any
      additional interest or penalties as a result of the adoption of FIN
      48.




The
      Company files income tax returns in the United States federal jurisdiction
      and
      certain states in the United States. The Company is in the process of preparing
      and filing its US federal returns. The 2000 through 2007 federal returns are
      considered open tax years as of the date of these consolidated financial
      statements. No tax returns are currently under examination by any tax
      authorities.




**NOTE
      5 - PROPERTY AND EQUIPMENT**




Property
      and equipment at December 31, 2007 and 2006 consists of the
      following:





2007
            
            2006Office
                equipment
            
            $
            26,021
            
            $
            26,021Computer
                equipment and software
            
            
            7,173
            
            
            7,173Furniture
                and fixtures
            
            
            2,450
            
            
            2,45035,644
            
            
            35,644Less:
                accumulated depreciation
            
            
            (28,019
            )
            
            (21,718
            )Net
                property and equipment
            
            $
            7,625
            
            $
            13,926




Depreciation
      expense totaled $6,301, $5,812 and $5,483 for the years ended December 31,
      2007,
      2006 and 2005, respectively.




**NOTE
      6 - ACCRUED EXECUTIVE COMPENSATION**




The
      Company had an Employment Agreement with Paul M. Brown, its former president,
      whereby the Company was to pay Mr. Brown an annual base salary of $250,000.
      For
      the year ended December 31, 2002, the amount accrued until Mr. Brown's death
      was
      $142,667. As of December 31, 2007, no payments have been made and the balance
      is
      $142,667.




On
      September 13, 2001, the Company hired Patrick Herda as the vice president of
      business development whereby the Company is to pay Mr. Herda an annual base
      salary of $150,000. For the year 2006, Mr. Herda's salary was $110,000 and
      for
      the year 2007 Mr. Herda's salary is $55,000. The Company has been unable to
      pay
      Mr. Herda's his full salary in past years and these unpaid sums have been
      accrued. As of December 31, 2007, the balance of accrued executive compensation
      was $523,646.


F-13




On
      January 23, 2002, the Company hired John Dempsey as the vice president at an
      annual base salary of $120,000. Mr. Dempsey resigned effective September 5,
      2005. The Company has been unable to pay Mr. Dempsey's full salary in past
      years
      and these unpaid sums have been accrued. As of December 31, 2007, the amount
      accrued was $328,799 and at Mr. Dempsey's discretion will be paid back either
      in
      cash or common stock at a price of $1 per share.




**NOTE
      7 - CONVERTIBLE DEBT**




Notes
      payable at December 31, 2007 and 2006 are as follows:


December 31,
              
              December 31,2007
              
              2006Denise
                  Barbato, bearing interest at 10% per year, convertible into common
                  stockat
                  $0.084 per share. The note is payable on December 31, 2008
              
              $
              34,723
              
              $
              862,711Denise
                  Barbato, bearing interest at 10% per year, convertible into common
                  stockat
                  $0.084 per share. The notes are payable on December 31, 2008
              
              
              696,500
              
              
              31,000Global
                  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
              
              
              20,000Long
                  Lane Capital demand note at 12 % per year
              
              
              —
              
              
              10,000John
                  Powers note, convertible into common stockAt
                  a 50% discount to market; interest rate 12%; maturity June 4,
                  2008
              
              
              12,000
              
              
              —Total
                  notes payable
              
              
              782,223
              
              
              942,711Less:
                  current portion
              
              
              (782,223
              )
              
              (942,711
              )Balance
                  notes payable (long term portion)
              
              $
              —
              
              $
              —





During
      the year ended December 31, 2007 the Company received advances from Denise
      Barbato in the amount of $665,500. The advances are convertible into common
      stock at the rate of $0.084 per share and the due date has been extended to
      December 31, 2008. Since the advances are convertible at a discount to market,
      the Company has recorded a debt discount related to the beneficial conversion
      feature in the amount of $665,500, based on the proceeds received. The discount
      is being amortized over the term of the debt, through December 31, 2008.
      Amortization of debt discount for the year ended December 31, 2007 was
      $432,333.





During
      2007 the Company issued an aggregate of 10,955,000 shares of common stock as
      payment of $827,988 of principle and $92,232 of accrued interest to Denise
      Barbato.





In
      March
      and April, 2007 the Company received an advance from Long Lane Capital in the
      amount of $99,980, pursuant to a $100,000 credit facility. The advance is
      convertible into common stock at the rate of 50% of market value and is due
      in
      March 2008. In connection with the total credit facility we have issued a common
      stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35
      per share. In accordance with EITF 00-27, a portion of the proceeds of the
      current advance was allocated to the warrant associated with the current debt
      based on its relative fair value, which totaled $70,871 using the Black-Scholes
      option pricing model. The assumptions used in the Black-Scholes model are as
      follows: (1) dividend yield of 0%; (2) expected volatility of 100%, (3)
      risk-free interest rate of 4.5%, and (4) expected life of 2 years. We have
      also
      recorded a beneficial conversion feature in the amount of $29,109, based on
      the
      proceeds allocated to the debt. The aggregate discount is being amortized over
      the term of the debt, through March 28, 2008. Amortization of debt discount
      for
      the year December 31, 2007 was $99,980.


F-14





During
      December, 2007 we issued 1,187,001 shares of common stock upon conversion of
      the
      Long Lane Capital advances of $99,980, plus accrued interest of $7,444.




The
      embedded conversion option related to the Long Lane Capital credit facility
      is
      accounted for under EITF issue No. 00-19 "Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own Stock".
      We
      have determined that the embedded conversion option is a derivative liability.
      Accordingly, the embedded conversion option will be marked to market through
      earnings at the end of each reporting period. The conversion option is valued
      using the Black-Scholes valuation model. For the year ended December 31, 2007,
      the Company reflected a charge of $78,279 representing the change in the value
      of the embedded conversion option. As a result of the conversion of the debt,
      we
      have reclassified an aggregate of $107,387 of our derivative liability to
      additional paid in capital. This amount represents the fair value of the
      derivative liability on the date of conversion.




On
      June
      4, 2007 the Company received $12,000 pursuant to a promissory note payable
      to
      John Powers, a director, bearing interest at 12% per year and maturing on June
      4, 2008. The note is convertible into common stock at the rate of 50% of market
      value. We have recorded a beneficial conversion feature in the amount of
      $12,000. The discount is being amortized over the term of the debt, through
      June
      4, 2008. Amortization of debt discount for the year ended December 31, 2007
      was
      $6,884.




The
      embedded conversion option related to the Powers note is accounted for under
      EITF issue No. 00-19. We have determined that the embedded conversion option
      is
      a derivative liability. Accordingly, the embedded conversion option will be
      marked to market through earnings at the end of each reporting period. The
      conversion option is valued using the Black-Scholes valuation model. For the
      year ended December 31, 2007, the Company reflected a charge of $1,310
      representing the change in the value of the embedded conversion
      option.




On
      March
      16, 2007 the Company issued 25,000 shares of common stock as payment of $10,000
      of principle and $1,395 of accrued interest to Long Lane Capital. During
      February, 2006, the Company had received $10,000 pursuant to a demand promissory
      note bearing interest at 12% per year.





In
      March
      31, 2006 the Company received advances from Denise Barbato in the amount of
      $31,000. The advances are convertible into common stock at the rate of $0.084
      per share and are due December 31, 2008. Since the notes are convertible at
      a
      discount to market, the Company has recorded a debt discount related to the
      beneficial conversion feature in the amount of $31,000, based on the proceeds
      received. The discount is being amortized over the term of the debt, through
      August 31, 2006. Amortization of debt discount for the year ended December
      31,
      2006 was $31,000.





During
      October and November 2006 the Company issued 1,880,000 shares of common stock
      as
      payment of $110,424 of principal and $47,495 of accrued interest to Denise
      Barbato.




In
      April
      2006 the company issued 309,545 shares to Long Lane capital as payment for
      a
      February 2005 note of $60,000 plus accrued interest of $8,100.




**NOTE
      8 - CONVERTIBLE DEBT - RELATED PARTY**




On
      November 24, 2001 the Company executed a promissory note with Global Atomics,
      Inc. (GAI), a company controlled by Paul M. Brown, the Company's former
      president, in the amount of $14,000. The note bears an interest rate of 10%
      per
      annum and is due upon demand. At the request of GAI, any unpaid balance of
      principal and interest due will be converted in common stock at a rate of $1
      per
      share. During the year ended December 31, 2002, the Company paid GAI $10,000.
      As
      of December 31, 2007 and 2006, the amount due is $4,000. Accrued interest was
      $2,600 and $2,200 at December 31, 2007 and 2006, respectively.


F-15




On
      December 11, 2001 the Company executed a promissory note with International
      Fission Fuels, Inc. (IFFI), a company controlled by Paul M. Brown, the Company's
      former president, in the amount of $15,000. The note bears an interest rate
      of
      10% per annum and is due upon demand. At the request of IFFI, any unpaid balance
      of principal and interest due will be converted in common stock at a rate of
      $1
      per share. As of December 31, 2007 and 2006, the amount due is $15,000. Accrued
      interest was $9,125 and $7,625 at December 31, 2007 and 2006,
      respectively.




On
      April
      16, 2002, the Company received $20,000 from Jackie Brown, the wife of the
      Company's former president. The note bears no interest and is due upon demand.
      At the request of Ms. Brown, any unpaid balance of principal due will be
      converted in common stock at a rate of $1 per share.




**NOTE
      9 - STOCKHOLDER'S EQUITY**




The
      Company is authorized to issue 100,000,000 shares of common stock with $0.0001
      par value per share. As of December 31, 2007 and 2006, the Company has issued
      and outstanding 73,734,095 and 53,665,644 shares of common stock,
      respectively.





During
      the year ended December 31, 2007 the Company issued an aggregate of 5,813,762
      shares of common stock, valued at $2,612,419, for consulting
      services.




During
      the year ended December 31, 2007 the Company issued 2,087,688 shares as payment
      of expenses accrued at December 31, 2006 in the amount of
      $1,382,306.




During
      the year ended December 31, 2007 the Company issued an aggregate of 10,955,000
      shares of common stock as payment of $827,988 of principle and $92,232 of
      accrued interest to Denise Barbato.




During
      December, 2007 we issued 1,187,001 shares of common stock upon conversion of
      the
      Long Lane Capital advances of $99,980, plus accrued interest of $7,444.





During
      March 2007 the Company issued 25,000 shares of common stock as payment of
      $11,395 of principle and interest due to Long Lane Capital.




In
      connection with the Long Lane Capital credit facility we have issued a common
      stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35
      per share.




During
      the year ended December 31, 2006 the Company issued an aggregate of 1,446,099
      shares of common stock, valued at $1,104,715 for consulting
      services.




During
      the year ended December 31, 2006 the Company issued an aggregate of 2,192,779
      shares as payment of expenses accrued at December 31, 2005 in the amount of
      $1,077,445.




During
      January 2006 the Company issued 2,000,000 shares of common stock as payment
      of
      $168,000 of interest accrued to Denise Barbato.




In
      April
      2006 the company issued 309,545 shares to Long Lane capital valued at $68,100
      as
      a payment for the February 2005 note of $60,000 plus accrued interest of
      $8,100.




During
      September 2006 the Company issued 800,000 shares of common stock as payment
      of
      $67,200 of interest accrued to Denise Barbato.


F-16




On
      August
      30, 2006, Long Lane Capital, Inc. exercised its two common stock warrants,
      aggregating 1,000,000 shares, under the cashless exercise provisions of the
      warrant agreements dated October 5, 2004 and February 26, 2005 and received
      428,155 and 393,203 shares respectively.




During
      October and November 2006 the Company issued 1,880,000 shares of common stock
      as
      payment of $110,424.63 of principal and $47,495.37 of interest accrued to Denise
      Barbato.




During
      the quarter ended September 30, 2006 the Company received $25,000 and issued
      250,000 shares of common stock upon the exercise of options.




During
      2005 the Company issued an aggregate of 4,402,940 shares of common stock, valued
      at $2,689,907, for consulting services.




During
      April 2005 the Company issued 2,510,223 shares as payment of expenses accrued
      at
      December 31, 2004 in the amount of $463,440.




In
      February, 2005, the Company issued a warrant to purchase 500,000 shares of
      common stock, as described in Note 8.




On
      July
      22, 2005 the Company granted options to a director for the purchase of 250,000
      shares of common stock. The options have an exercise price of $0.10 per share,
      are exercisable immediately and expire in three years. The Company has recorded
      an expense for the intrinsic value of the option at the date of grant of
      $162,500. The options have been valued at $163,953 using the Black-Scholes
      method at the date of grant of the options based on the following
      assumptions:(1) risk free interest rate of 3.75% ; (2) dividend yield of 0%;
      (3)
      volatility factor of the expected market price of our common stock of 103%;
      and
      (4) an expected life of the options of 1 year.




During
      October 2005, the Company issued 454,054 shares of common stock in settlement
      of
      debt of $60,000, plus accrued interest of $7,200.




In
      February, 2005, the Company issued Long Lane Capital a warrant to purchase
      500,000 shares of common stock in connection with a financing transaction.
      In
      accordance with EITF 00-27, a portion of the proceeds was allocated to the
      warrant based on its relative fair value, which totaled $53,552 using the
      Black-Scholes option pricing model. The assumptions used in the Black-Scholes
      model are as follows: (1) dividend yield of 0%; (2) expected volatility of
      215%,(3) risk-free interest rate of 4.9%, and (4) expected life of 2 years.
      The
      Company recorded a financing expense attributable to the warrants and the
      beneficial conversion feature of $60,000.




**NOTE
      10 - COMMITMENTS**




November
      3, 2005, FFI entered into a fifteen-year land lease with Venture III Associates,
      renewable for up to 90 years, for an approximate six-acre site in Toms River,
      New Jersey to build a proposed 52 million gallon waste-to-ethanol production
      facility in exchange for 1,000,000 shares of FFI common stock. When the facility
      commences operations FFI will pay Venture III $240,000 dollars annually in
      equal
      monthly installments, plus three (3%) percent of the net operating profit of
      the
      waste-to-ethanol facility when the facility begins operations. The payment
      of
      the 1,000,000 shares of FFI common stock was deferred by Venture III until
      groundbreaking occurs for the waste to fuel facility on said
      property.




For
      the
      years ended December 31, 2007, 2006 and 2005 the company paid $63,293, $59,714
      and $56,095 in rent expense respectively. The Company does not currently have
      any long-term lease commitments except as noted above.




F-17




**NOTE
      11 -OPTIONS AND WARRANTS**




The
      following table summarizes the changes in options and warrants outstanding
      and
      the related exercise prices for the shares of the Company's common stock issued
      by the Company as of December 31, 2007





Number of Shares
            
            Weighted Average Exercise
              PriceOutstanding
                at January 1, 2005
            
            
            750,000
            
            $
            0.34Granted
            
            
            750,000
            
            
            0.18Exercised
            
            
            —
            
            
            —Canceled
                or expired
            
            
            (250,000
            )
            
            0.75Outstanding
                at December 31, 2005
            
            
            1,250,000
            
            
            0.34Granted
            
            
            —
            
            
            —Exercised
            
            
            (1,250,000
            )
            
            0.34Canceled
                or expired
            
            
            —
            
            
            —Outstanding
                at December 31, 2006
            
            
            —
            
            
            —Granted
            
            
            500,000
            
            
            0.35Exercised
            
            
            —
            
            
            —Canceled
                or expired
            
            
            —
            
            
            —Outstanding
                at December 31, 2007
            
            
            500,000
            
            $
            0.35





In
      April
      2007, in connection with the total credit facility, we issued Long Lane Capital
      a warrant to purchase 500,000 shares of common stock, exercisable at $0.35
      per
      share. In accordance with EITF 00-27, a portion of the proceeds of the current
      advance was allocated to the warrant associated with the current debt based
      on
      its relative fair value, which totaled $70,871 using the Black-Scholes option
      pricing model. The assumptions used in the Black-Scholes model are as follows:
      (1) dividend yield of 0%; (2) expected volatility of 100%, (3) risk-free
      interest rate of 4.5%, and (4) expected life of 2 years.




In
      February, 2005, in connection with a financing arrangement, the Company issued
      Long Lane Capital a warrant to purchase 500,000 shares of common stock at the
      same price as the conversion price of the note for a period of 24 months. In
      accordance with EITF 00-27, a portion of the proceeds was allocated to the
      warrant based on its relative fair value, which totaled $53,552 using the
      Black-Scholes option pricing model. The assumptions used in the Black-Scholes
      model are as follows: (1) dividend yield of 0%; (2) expected volatility of
      215%,
      (3) risk-free interest rate of 4.9%, and (4) expected life of 2
      years.




On
      July
      22, 2005 the Company granted options to a director for the purchase of 250,000
      shares of common stock. The options have an exercise price of $0.10 per share,
      are exercisable immediately and expire in three years. The Company has recorded
      an expense for the intrinsic value of the option at the date of grant of
      $162,500. The options have been valued at $163,953 using the Black-Scholes
      method at the date of grant of the options based on the following assumptions:
      (1) risk free interest rate of 3.75%; (2) dividend yield of 0%; (3) volatility
      factor of the expected market price of our common stock of 103%; and (4) an
      expected life of the options of 1 year.




**NOTE
      12 - NON-QUALIFIED STOCK GRANT AND OPTION PLAN**




The
      Company has adopted Non-Qualified Stock Grant and Option Plan. The Plan is
      administered by the Company's Board of Directors. Directors, officers,
      employees, consultants, attorneys, and others who provide services to Company
      are eligible participants. Participants are eligible to be granted warrants,
      options, common stock as compensation.




On
      June
      30, 2003, the Company adopted the 2003 Non-Qualified Stock Grant and Option
      Plan. The Plan reserved 5,000,000 shares. The Plan was registered on a Form
      S-8
      registration statement on July 28, 2003. On March 30 2004, the Company adopted
      the 2004 Non-Qualified Stock Grant and Option Plan. The Plan reserved 5,000,000
      shares. The Plan was registered on a Form S-8 registration statement on March
      30, 2004. The Company issued 5,000,000 shares to thirteen individual comprised
      of consultants, attorneys and others who provided services to Company during
      2004. On November 10, 2004, the Company adopted the 2005 Non-Qualified Stock
      Grant and Option Plan. The Plan reserved 4,000,000 shares. The Plan was
      registered on a Form S-8 registration statement filed on November 16, 2004.
      The
      Company issued 2,071,601 shares to six individuals comprised of consultants,
      attorneys and others who provided services to the Company during 2004. On August
      5, 2005, the Company adopted another 2005 Non-Qualified Stock Grant and Option
      Plan. The Plan reserved 5,500,000 shares. The Plan was registered on a Form
      S-8
      registration statement filed on August 17, 2005.


F-18




On
      March
      9, 2007, the Company registered 5,000,000 common shares under a new Stock Grant
      Plan. The Stock Grant Plan is intended to serve as an incentive to and to
      encourage stock ownership by certain directors, officers, employees of and
      certain persons rendering contract services to the Company, so that they may
      acquire or increase their proprietary interest in the success of the
      Corporation, and to encourage them to remain in the Corporation's
      service.


On
        November 28, 2007, the company adopted a Stock Grant Plan. The plan reserved
        5,000,000 shares. The Plan was registered on Form S-8 Registration Statement
        filed on December 6, 2007. Directors, officers, employees, consultants,
        attorneys, and others who provide services to our Company are eligible
        participants. Participants are eligible to be granted warrants, options,
        common
        stock as compensation.




**NOTE
      13 - SUBSEQUENT EVENTS**





Subsequent
      to December 31, 2007, the company issued 8,887,000 restricted shares to
      Denis Barbato as a partial payment on the January 8, 2004 debt consolidated
      agreement.





Subsequent
      to December 31, 2007, the company issued 1,752,715 shares valued at
      $648,918 for consulting services and 426,136 shares valued at $150,000 for
      legal
      fees.


F-19