U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 For the fiscal year ended December 31, 2006.

      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
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   (State of Incorporation)                   (IRS Employer Identification No.)


  5505 Connecticut Ave., N.W. Ste.191.                     20015
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(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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the 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 |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will 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-KSB or any amendment of
this Form 10-KSB. |_|

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

The issuer had operating revenues of $223,000 for the year ended December 31,
2006.

This report contains a total of 52 pages. The Exhibit Index appears on page 23.

As of March 27, 2007, there were 57,309,999 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 $44,205,999 based on the average of the bid and ask price as
quoted on the OTC Electronic Bulletin Board on March 27, 2007. The sum excludes
the shares held by officers, directors, and stockholders whose ownership
exceeded 10% of the outstanding shares at March 27, 2007, 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.

<PAGE>

                             Nuclear Solutions, Inc.
                                   FORM 10-KSB
                                December 31, 2006

                                                                            Page

PART I......................................................................   1

ITEM 1.  Description of Business............................................   1

ITEM 2.  Description of Properties..........................................  14


ITEM 3.  Legal Proceedings..................................................  14

ITEM 4.  Submission of Matters to Vote of Security Holders..................  14

PART II.....................................................................  14

ITEM 5.  Market for Common Equity, Related Stockholder Matters and Small
         Business Issuer Purchases of Equity Securities.....................  14

ITEM 6.  Management's Discussion and Analysis or Plan of Operation..........  15

ITEM 7.  Financial Statements...............................................  17

ITEM 8.  Changes In and Disagreements With Accounting and Financial
         Disclosure.........................................................  17

ITEM 8A. Controls and Procedures............................................  17

ITEM 8B. Other Information..................................................  18

PART III....................................................................  18

ITEM 9.  Directors, Executive Officers, Promoters, and Control
         Persons: Compliance with Section 16(a) of the Exchange Act.........  18

ITEM 10. Executive Compensation.............................................  21

ITEM 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters........................................  22

ITEM 12. Certain Relationships and Related Transactions.....................  22

ITEM 13. Exhibits...........................................................  23

ITEM 14. Principal Accounting Fees and Services.............................  23

SIGNATURES..................................................................  25

EXHIBIT INDEX...............................................................  23

<PAGE>

PART I

ITEM 1.  Description of Business.

                        FORWARD-LOOKING STATEMENT NOTICE:

This annual report on Form 10-KSB 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-KSB 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
fromthe 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-KSB. 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.

      (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
commercial product technologies for homeland security and defense,
nano-technolology applications, nuclear remediation and synthetic ethanol
production.

      (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, and nuclear remediation. The company, through its
subsidiaries Fuel Frontiers, Inc. and Liquidyne fuels, Inc. is also engaged in
the development of facilities to produce alternative fuels from waste materials
and Bioethanol through conventional and commercially available fermentation
processes.

The company operates its 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.

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 except in the case of
our subsidiaries that are involved in the production of alternative and
renewable fuels. Nor do we intend to establish extensive marketing and
distribution operations of our own. 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.


                                       1
<PAGE>

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.

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, we
have filed three U.S. patent applications for our Nuclear Weapons Detection
Technology. 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 2006 to present, we continued our strategic relationship with
Multipartner, LLC, for consulting and developmental services in Europe; and as a
result of this relationship, we now have access to offices in Rome, Italy. Our
offices in Rome will serve as a base for our European operations from which we
intend to market our technologies, explore technologies being developed in
Europe, and utilize European technical resources for technology development
where applicable.

We have access to technical and scientific personnel in Russia consisting of
approximately Twenty-four selected scientists from a wide spectrum of
disciplines and areas of expertise. The prominent scientists come from
organizations such as the Russian Academy of Sciences, the Russian Defense
Industrial complex, and private and state owned R&D companies. The advisory
board was established to assist us by exploring and presenting technology and
developmental opportunities within the Russian scientific establishment. The
scientists have agreed to remain in standby mode until presented with a specific
Project. The terms and conditions of a contractual consulting arrangement with a
selected scientist or group of scientists will be negotiated at that time.
Currently, do not have any formal engagements with individuals of our Russian
Scientific Advisory Board. However, technologies related to the production of
alternative and renewable fuels are currently being investigated in Russia.


                                       2
<PAGE>

Beginning in 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 technology license agreement with IP
Technology Holding, Inc. Our portfolio of intellectual property which includes
trade secrets and know-how in the areas of nuclear weapon detection via
gravitational anomaly, detritiation of nuclear wastewater; and our license
option agreement for nuclear micro battery technology covered by U.S. Patents
Nos. 5,087,533; 6,118,204; 6,238,812, 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, as well as our contractual relationship with our
technical consultant Boris Muchnik.

NUCLEAR TECHNOLOGIES:

GRAVIMETRIC SHIELDED NUCLEAR MATERIAL/PORTABLE NUCLEAR WEAPON DETECTOR (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).

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.


                                       3
<PAGE>

      -     Build and demonstrate a proof-of principle prototype.

      -     Seek additional licensees.

NUCLEAR MICRO-BATTERIES

This program is aimed at developing embeddable nuclear micro-batteries that can
supply long-lasting power for computer chips, micromotors, remote sensors,
implantable medical devices, and other defense and aerospace applications. This
technology is also known as nuclear 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 nuclear micro battery technology may solve this problem by drawing energy
from an embedded radioactive isotope due to the fact that nuclear batteries are
known to have power densities up to 1,000 times greater than achievable with
conventional chemical battery technology.

In November 2003, the Company entered into a licensing option agreement for
three issued U.S. patents for nuclear micro-battery technology (Pat. Nos.
5,087,533; 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 2006, the company extended the license option rights under the
terms of the agreement until January 2007 in exchange for the payment of all
outstanding maintenance fees. 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.

Two of the three nuclear micro-battery patents the we hold a license option
for(Pat. Nos. 5,087,533; and 6,118,204) have expired as a result of non-payment
of patent maintenance fees by the prior assignee; however, the company has
engaged the law firm of Greenberg and Lieberman, P.C. to make application for
the revival of those patents and has paid all outstanding maintenance fees. The
patent revivals are currently in process and we anticipate receiving further
information from the USPTO within the next twelve months. We are currently
developing the next generation of nuclear micro-battery technology that could
render the previous patents obsolete. However, the reinstatement of the expired
patents could offer an additional opportunity to block our competition from this
market.On Novemeber 3, 2006 we recived notice from the U.S. Patent and Trademark
Office that Patent #6,118,204 was succesfully reinstated and is now fully
enforcable.

Subsequent to entering the licensing option agreement in November of 2003, we
began efforts to form development partnerships to assist in the development of
and to secure government funding for this technology. We have initiated the
process of forming a teaming arrangement with Lawrence Livermore National
Laboratories to further develop this technology. Previously, we anticipated
finalizing a teaming relationship with Lawrence Livermore National Laboratories
in 2005. This was not accomplished, due to lack of working capital to fund this
development program in 2005. Management anticipates funding and launching this
teaming relationship within the next eighteen months, subject to availability of
working capital.

Our nuclear micro battery technology relies on the application of tritiated
amorphous silicon as a betavoltaic, thin-film, intrinsic energy conversion
device. A betavoltaic battery is a nuclear battery that converts energy from
beta particles released by a beta emitting radioactive source, such as tritium,
into electrical power. Common semiconductor designs of betavoltaic 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 betavoltaic
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 betavoltaic
batteries and P-N junction devices is the self-absorption of beta energy in the
radioactive source itself. In order to reduce the self-absorption of beta energy
we incorporate the radioactive 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 nuclear 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 radiation degradation, our competitors have greater access
to capital and resources.

The operation of our nuclear 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 we plan on raising capital in the amount of $500,000 to
$1,000,000 to fund the development of our nuclear micro-battery technology. We
also plan on funding a development program with Lawrence Livermore National
Laboratory to build new battery prototypes intended for Micro-Electro-Mechanical
Systems(MEMS) applications. We anticipate raising the money to fund this project
through a combination of debt and equity financing.


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<PAGE>

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.

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 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 $2,000,000 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 and synthetic ethanol.

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 use of virtually cost free waste materials some of which are
renewable, as opposed to other approaches which rely on purchasing feed stocks
such as natural gas or coal. 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 proximity of the east and gulf
coasts of the United States. Over the next twelve months, we anticipate
expanding our project development efforts internationally as opportunities arise
and as our capital and human resources permit.

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 are currently in
negotiations with Stone and Webster, LTD. Of Milton Keynes, England, a
subsidiary of the Shaw Group to retain them for services such as 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.

System Overview

The FFI approach for the production of ultra-clean diesel or synthetic ethanol
occurs in two stages. In the first stage the feedstock material is fed into a
plasma processing system such as the Startech Plasma Converter System (PCS)
which transforms the feedstock material into synthesis gas, which is composed of
carbon, hydrogen and oxygen. FFI entered into a global strategic alliance with
Startech Environmental Corporation that includes the use of this technology. The
heart of Startech's Plasma Converter System 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 ethanol or ultra-clean diesel though either a modified
Fischer-Tropsch gas-to-liquids synthesis process for diesel fuels or an approach
similar in nature to one Dow Chemical pioneered in the mid 1980s. The process
applies a metallic catalyst to chemically transform the Plasynthesis 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.


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<PAGE>

The FFI approach to ethanol and ultra-clean synthetic fuel production differs
from other approaches production mainly because our system can utilize feedstock
materials that are normally considered waste to society and typically have
negligible or no value. Since we can utilize feedstock virtually free of cost,
our feedstock economic model is highly immune to the uncertainties of weather,
seasonality and competing market forces. The ability to use waste materials is a
benefit of a plasma processing system. The Startech plasma processing system
system 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-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.

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-ethanol 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 ethanol.

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-ethanol
production facility located in Toms River, New Jersey.

On January 11, 2006, former Managing Director of the New Jersey Economic
Development Authority Frank Mancini joined FFI's team as a consultant to
complete the bond underwriting process for the Toms River facility and to assist
in raising capital through municipal bonds to launch additional waste-to-ethanol
production facilities at other potential sites in the northeast, midwest and on
the west coast. It is anticipated, but not guaranteed, that financing through
the issuance of the bonds will be secured and is among the major priorities
moving forward.

In addition to developments pertaining to financing, FFI entered into a contract
with Tennessee-based Eco-Energy, Inc. on December 15, 2005 for the sale of 50
million gallons of ethanol per year. The ethanol purchase contract between FFI
and Eco-Energy, Inc. was revised on February 27, 2006 to lock-in a 10-year
commitment. Eco-Energy would be purchasing approximately all of the annual
production or output of FFI's waste-to-ethanol facility once operational in Toms
River, New Jersey.

In terms of technology, FFI and Connecticut-based Startech Environmental
Corporation concluded a global strategic alliance on March 13, 2006 through
which FFI gains access to Startech's innovative, proven and proprietary Plasma
Converter System. Both FFI and Startech agreed to cooperate in identifying and
pursuing business opportunities in which Startech's products and equipment are
integrated with FFI's equipment and production process to operate
waste-to-ethanol conversion facilities not only within the U.S. ethanol market
but also internationally.


                                       6
<PAGE>

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 ethanol expert Douglas
A. Durante to provide information and data about the ethanol industry and advise
us on the challenges and opportunities we face as we develop and pursue options
for entering and supplying the ethanol market.

Within the framework of our business model to launch additional waste-to-fuel
production facilities at other potential sites in the northeast, midwest and on
the west coast, FFI announced on April 10, 2006 that it had entered into an
agreement with Ambient Energy Corporation (Ambient) to begin securing a
potential site with abundant waste coal feedstock in eastern Pennsylvania for a
250 million gallon per year waste-to-ethanol production facility. This facility
would be in addition to the one under development in Toms River, New Jersey. As
of the date of this report, this project is on hold pending further evaluation.
However, we are continuing to develop new projects in conjunction with Ambient
Energy Corporation.

As of the date of this report the FFI team is currently developing six
waste-to-fuel projects in the United States. The projected output of the
projects ranges 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 $110,000,000 to $200,000,000. 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.

On December 12, 2006, Fuel Frontiers, Inc., a subsidiary of Nuclear Solutions,
Inc., (the "Company") signed an agreement with Bear, Stearns & Co., Inc. ("Bear
Stearns"). Bear Stearns has conditionally agreed to act as the senior
underwriter for the Company's anticipated tax-exempt debt financing for the
Company's proposed waste-to-ethanol facility in Toms River, New Jersey, (the
"Project").

      Bear Stearns proposes to provide the Company with the following services:

      o     Bear Stearns will familiarize itself with the Project and its
            proposed implementation, financing, construction and operation.

      o     Bear Stearns will assist the Company in obtaining tax-exempt
            financing approvals.

      o     Bear Stearns will review existing documentation, assist in the
            development of the new documentation and make recommendations on the
            terms and conditions necessary to enhance the Project's ability to
            be financed.

      o     Bear Stearns will assist the Company, Bond counsel, Company counsel
            and Company financial advisor in preparing a disclosure document
            (the "Offering Memorandum") and related documentation for use in
            selling the Project's bonds to institutional investors.

      o     Bear Stearns will identify likely buyers and work with the Company
            and its team to structure and market a tax-exempt bond issue for the
            Project, subject to certain conditions described in the Agreement.

      o     At the request of the Company, should the Company wish to consider
            financing the Project on a taxable debt basis, Bear Stearns will
            advise the Company as to the feasibility of seeking funds in the
            144A debt market, including a briefing on disclosure and market
            terms and conditions.

      o     Should the Company elect to proceed with financing the Project on a
            taxable debt basis, Bear Stearns will, subject to the conditions
            described in Agreement, assist the Company, Bond counsel, Company
            counsel and Company advisors to prepare an Offering Memorandum and
            related documentation for use in selling the Project's bonds to
            institutional investors in the 144A debt market.

In consideration for Bear Stearns' services under the Agreement, the Company
agrees to pay the following compensation:

      o     On or before January 1, 2007, the Company will pay Bear Stearns a
            cash fee of $100,000 in order to initiate the engagement; and

      o     Upon the closing of any debt offering for the Project, based on the
            difficulty of the transaction and the final credit quality of the
            Project, an amount equal to not more than two percent (2%) and not
            less than one and one-quarter percent (1.25%) of the initial
            principal amount of such debt offering.


                                       7
<PAGE>

Additionally, the Company agrees to:

      o     Reimburse Bear Stearns for all reasonable out-of-pocket expenses
            incurred by Bear Stearns; and

      o     Indemnify Bear Stearns in accordance with the indemnification
            provisions attached to the Agreement.

The parties have agreed to certain performance conditions such as:

      o     The Agreement does not constitute an expressed or implied commitment
            or undertaking on the part of Bear Stearns to provide the financing
            and does not ensure the successful arrangement or completion of the
            Project financing;

      o     Bear Stearns willingness to underwrite, participate or arrange for
            any offering or placement of securities is subject to (a)
            satisfactory completion of due diligence as to the Company, the
            Project, the Project Participants and the Financing, (b) execution
            and delivery of satisfactory definitive documentation (including,
            but not limited to, the Offering Memorandum and a final, definitive
            underwriting agreement, purchase agreement or placement agency
            agreement, as the case may be, in Bear Stearns' standard form,
            containing customary representations, warranties, covenants,
            indemnification provisions and closing conditions), (c) the
            satisfaction of all conditions set forth in such documentation, as
            well as the absence of any events set forth therein which would
            constitute a default or potential default thereunder or permit the
            termination thereof, and (d) the receipt of (i) any required Bear
            Stearns' internal approvals and (ii) such legal opinions of Company
            counsel as may be deemed appropriate by Bear Stearns. The parties
            may terminate the agreement at any time with 10 days written notice,
            subject to conditions.

The preceding information concerning Bear Stearns was filed on a form 8K with
the Securities and Exchange Commission on December 20, 2006. This summary is
qualified in its entirety by the terms and conditions of the Agreement which is
attached to the 8K report dated December 20, 2006 as Exhibit 10. This Agreement
should be read in its entirety to gain a complete understanding of the details
of the agreement between the Company and Bear Stearns. In January 2007, the
engagement agreement was activated by the payment of the $100,000 cash fee.

Competition

Competition in the fields in which the company is endeavoring is complex. During
2006, 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 t 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 finalizing plant designs as well as securing financing and
additional locations. These two key 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
and synthetic ethanol 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.

Bio-ethanol Project Development with Liquidyne Fuels, Inc.

The company formed Liquidyne Fuels, Inc. (Liquidyne), in July 2006, as a wholly
owned subsidiary of Nuclear Solutions, Inc. (NSOL), for the purpose of building,
owning, and operating multiple fuel-grade bio-ethanol facilities in several
select locations initially targeting the Midwest and eastern United States.

Subject to site specifics, the Liquidyne Fuels business model proposes using a
plasma processing system as a key component of a waste-to-energy hybrid approach
for bio-ethanol production aimed at virtually eliminating the use of fossil
fuels such as natural gas and coal that are normally consumed during the
production of conventional fermentation-based ethanol. This approach to
bio-ethanol production is being pursued concurrently and in conjunction with
Nuclear Solutions' and Fuel Frontiers' ongoing plans for waste-to-ethanol
synthesis facilities.


                                       8
<PAGE>

In some cases a proposed Liquidyne Bio-ethanol facility would be constructed
initially as a conventional fermentation-based Bio-ethanol plant that would
consume fossil fuels in the ethanol manufacturing process. However, we intend
for all of our plant designs to be capable of being upgraded at a later date to
a plasma processing system for power production.

In August 2006, Nuclear Solutions, Inc. purchased an option on behalf of its
independent subsidiary Liquidyne Fuels, Inc. to acquire approximately 110 acres
in Union County, Iowa to build and operate a waste-to-energy hybrid bio-ethanol
production facility anticipated to produce about 50 million gallons per year.
The company paid $7,500 for a six-month option on the Iowa site, which allows it
to purchase the property for $824,550. The company chose not to exercise the
option due to the fact that an adjacent parcel of land appears to be more
desirable. The company is currently in negotiations with the landowner to
purchase the option for the preferred site.

During 2006, we assembled a team of ethanol industry professionals to identify
potential bio-ethanol sites, familiar with every aspect of ethanol plant siting
and development. We have and are continuing to assess and identify multiple
candidate sites for corn-based bio-ethanol production facilities.

Since we consider choosing and developing sites as one of the most critical
factors for a successful ethanol plant we have focused our efforts in an attempt
to secure the best possible site locations. Among the critical factors that we
consider when evaluating a site are: proximity to feedstock, rail and road
transportation, local energy supply, ensuring adequate distance between other
ethanol facilities, and community support. There has been intense competition
for potential bio-ethanol sites over the past two years as a number of
speculators and developers secured sites with little or no clear plan on how to
proceed. Consequently, there are many excellent sites being held with options
that are off the market, making it more difficult to secure good site locations.

Our team team has identified sites that were either previously unknown or in
some cases have come back on the market. Currently the company is evaluating and
profiling six potential Bio-ethanol sites to an Iowa and four in Nebraska.

Competition in the bio-ethanol business is intense. We have multiple competitors
to contend with that have greater access to resources such as capital and
personnel. Over the next twelve months, we anticipate that Liquidyne's
development efforts will continue to focus on securing the best site locations
possible and in developing the project so it is ready for turnkey financing. Our
goal is to successfully develop or purchase at least one developed ethanol site,
successfully finance the project, and begin construction within the next six
months. Over the next twelve months we anticipate that Liquidyne 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.

Previously, in 2006 the company mentioned the possibility of spinning off the
fuel frontiers, Inc. subsidiary. Management has elected to drop subsidiary spin
off considerations for now. In 2007, management anticipates shifting nuclear
solutions, Inc. into a holding company that would own three operating
subsidiaries. The three operating subsidiaries would be Fuel Frontiers, Inc,
targeting the production of ultraclean synthetic fuels, Liquidyne fuels, Inc.
for the production of bio-ethanol, and a new subsidiary that would specialize in
the continued development and marketing of our nuclear related technologies such
as nuclear weapon detection technology and nuclear micro-battery technology.

For the year ended December 31, 2006, 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 our Vice President for Corporate Development. In addition
to the named officers, we retain the following independent contractors and
consultants: 24- 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.

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.


                                       9
<PAGE>

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" below, 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;
parties 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

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.

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. 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.


                                       10
<PAGE>

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.

Risks associated with acquisitions

As a major component of its business strategy, the Company expects to acquire
assets and businesses relating to or complementary to its operations. 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 demand for 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, and economic conditions specific to the healthcare industry. 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.


                                       11
<PAGE>

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.

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. To further implement the permitted
indemnification, we have entered into Indemnity Agreements with our officers and
directors.

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 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.


                                       12
<PAGE>

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 February 29, 2008, 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. 2 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.

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 management's 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.


                                       13
<PAGE>

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 Small Business
        Issuer Purchases of Equity Securities.

(a) Market Information.

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 2006 and 2005, including the first quarter of 2007. The
quotations set forth below reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual transactions.
Table 1.

Bid Information

Fiscal Quarter Ended      Low       High

December 31, 2005         0.86      1.10
September 30, 2005        0.81      1.15
June 30, 2005             0.57      1.07
March 31, 2005            0.71      1.17

December 31, 2006         0.80      0.87
September 30, 2006        0.99      1.13
June 30, 2006             1.14      1.19
March 31, 2006            0.80      0.85

March 27, 2007            0.77      0.78

(a)   Holders.

      As of December 31, 2006 our stock transfer agent records indicate that our
company has approximately 530 shareholders holding 53,665,644 common shares. The
company believes that the actual number of shareholders is greater due to the
fact that the majority of the company's common stock is freely tradable in the
public marketplace wherein individual shareholder information is unavailable or
unreliable.

(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

      All sales of unregistered securities have been previously reported in our
filed periodic reports filed with the Securities & Exchange Commission on Forms
8-K and 10-QSB.

      On October 4, 2006 the company issued 1,000,000 shares to Denise Barbato
valued at $84,000 as a partial payment for the January 8th, 2004 debt
consolidation agreement.

(d)   Securities Authorized for Issuance under Equity Compensation Plans

The following table summarizes our equity compensation plan information as of
December 31, 2006. Information is included for equity compensation plans not
approved by our security holders.


                                       14
<PAGE>

Table 1.

Equity Compensation Plan Information

<TABLE>
<CAPTION>
Plan Category                    Number of Securities to      Weighted-average              Number of Securities
                                 be issued upon exercise      Exercise price of             remaining available for
                                 of outstanding options,      outstanding options,          future issuance under
                                 warrants and rights          warrants, and rights          equity compensation
                                                                                            plans (excluding
                                                                                            securities reflected in
                                                                                            column (a)
<S>                              <C>                          <C>                           <C>
                                          (a)                          (b)                            (c)
------------------------------   --------------------------   ---------------------------   --------------------------
Equity Compensation Plans
approved by security holders     None                         None                          None
------------------------------   --------------------------   ---------------------------   --------------------------
Equity Compensation Plans
not approved by security         5,500,000 (1)                $ 0.62                        1,367,307
holders
------------------------------   --------------------------   ---------------------------   --------------------------
Total                            5,500,000                                                  1,367,307
------------------------------   --------------------------   ---------------------------   --------------------------
</TABLE>

(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
2006 we issued 4,132,693 shares from this plan to individuals comprised of
employees, consultants, attorneys and others who provided services to our
company during 2006.

ITEM 6. Management's Discussion and Analysis or Plan of Operation.

When used in this Form 10-KSB 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.


                                       15
<PAGE>

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.

REVENUES

During the year ended December 31, 2006, we recognized revenues of $223,000
resulting from our license sale to I.P. Technology Holding, Inc. This compares
to $302,500 in revenues for the same period ended December 31, 2005.

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.

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, 2005, and December 31, 2006 the balance of all
accounts receivables was from one customer.

OPERATING EXPENSES

Operating expenses for the period ended December 31, 2006 were $3,973,934 and
compares to 4,012,156 for the same period ended December 31, 2005. Included in
the year ended December 31, 2006 are $2,635,488 and 1,023,392 in expenses for
consulting fees and legal fees respectively. This compares to $2,917,791 in
consulting fees and 515,140 in legal fees for the year ended December 31, 2005.
Legal fees increased due to increased activity in the development of
intellectual property and filing of patent applications.

During the year ended December 31, 2006 we incurred losses of $3,885,078 This
compares to losses of $3,880,270 for the year ended December 31, 2005. 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, 2006, we had a working capital deficit of $5,114,819 which
compares to a working capital deficit of $ 3,677,940 as of December 31, 2005. As
a result of our operating losses for the year ended December 31, 2006, we
generated a cash flow deficit of $49,815 from operating activities. Cash flows
used in investing activities was $7,430 during the period. Cash flows provided
by financing activities were $66,000 on proceeds from short-term notes payable
and from the sale of common stock in the year ended December 31, 2006.

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


                                       16
<PAGE>

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,
2006 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.

Product Research and Development

We anticipate continuing to incur research and development expenditures in
connection with the development of nuclear micro-battery technology, shielded
nuclear material detector technology, tritiated water remediation technology
during the next twelve months. This includes, but is not limited to: $500,000 to
$1,000,000 for nuclear 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, 2006, 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 7. Financial Statements.

Our Consolidated Financial Statements, together with the report of independent
auditors thereon are presented as a separate section of this Form 10-KSB.

ITEM 8. Changes In and Disagreements with Accountants on Accounting and
        Financial Disclosure.

        None.

ITEM 8A. Controls and Procedures.

(a)   Evaluation of Disclosure Controls and Procedures.

      As of the end of the reporting period, December 31, 2006, we carried out
an evaluation, under the supervision and with the participation of our
management, including the Company's Chairman and Chief Executive Officer and the
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities
Exchange Act of 1934 (the "Exchange Act"), which disclosure controls and
procedures are designed to insure that information required to be disclosed by a
company in the reports that it files under the Exchange Act is recorded,
processed, summarized and reported within required time periods specified by the
SEC's rules and forms. Based upon that evaluation, the Chairman and the Chief
Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company required to be included in the Company's period SEC filings.

(b)   Changes in Internal Control.

      Subsequent to the date of such evaluation as described in subparagraph (a)
above, there were no changes in our internal controls or other factors that
could significantly affect these controls, including any corrective action with
regard to significant deficiencies and material weaknesses.


                                       17
<PAGE>

(c)   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:

                                    PART III

ITEM 9. Directors, Executive Officers, Promoters and Control Persons and
        Corporate Governance; Compliance with Section 16(a) of the Exchange Act.

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               37          President, CEO, Chairman Board Directors
Kenneth Faith               37          CFO, Principal Accounting Officer,
                                        Member Board of Directors
John Powers, Ph.D.          72          Member Board of Directors
Jack Young                  77          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.

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.


                                       18
<PAGE>

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.

JP Morgan Fleming Asset Management, London, United Kingdom, February 2001-March
2002. Title: Vice President, United States Fund Transfer Agency. Mr. Faith was
responsible for the management of the Transfer Agent control and operations
units. These units processed shareholder transactions for pooled investment
product lines with assets in excess of $160 billion, including registered mutual
funds and private funds. He managed a 32 person staff and was responsible for
process model improvement, vendor management, measuring and controlling business
lines risks, and department budgets.

JP Morgan Asset Management, London, United Kingdom August 2000-February 2001.
Title: Assistant Vice President, Mutual Funds Division. Mr. Faith managed a
professional staff of 20 individuals from eight countries. His management duties
included the daily oversight of vendors performing fund accounting for seventeen
portfolios with net assets in excess of 35 billion Euros during liftout and
conversion of fund accounting and custody services. Oversight included general
accounting ledger activity and financial proofs for single/multiclass hedge
funds.

JOHN POWERS, Ph.D, Member Board of Directors

John R. Powers, was appointed to the Board of Directors in June 2002. He is also
the Chairman and CEO of Corporate Communication Resources Incorporated of
Princeton, New Jersey (CCRI) since 1990 to the present. CCRI is an alliance of
subject matter and process management experts created to address the emerging
terrorist threat. These include senior executives who played significant roles
in the development of the nation's contingency planning, continuity of
operations, emergency preparedness, mobilization, planning, and infrastructure
assurance programs. From 1996 to 1998, Dr. Powers served as a Commissioner and
the Executive Director of the President's Commission on Critical Infrastructure
Protection (PCCIP). He managed the research, provided overall direction to the
Commission's deliberations, and led the formulation of the National Structures
recommendations subsequently adopted by President Bill Clinton. From 1983-1996
Dr. Powers served at the Federal Emergency Management Agency (FEMA). From
January 1993 to January 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 Minnesota, Wisconsin and Illinois. From January 1995 to July 1996, he
organized the Alternative Dispute Resolution Program for the Agency. Earlier at
FEMA, he headed the Office of Civil Preparedness and then the Office of Federal
Preparedness. From 1978 to 1983, Dr. Powers was with the Department of Energy.
In 1978, as the Director of Research and Development Strategies, he served first
as the Executive Director for the Interagency Review Group on Nuclear Waste
management and prepared the report to President Jimmy Carter on that subject.
During 1980-81, Dr. Powers served as Executive Director of the "Interim"
Alternative Fuels Program and was responsible for the award of seven billion
dollars to stimulate new alternative energy projects. He later served as the
Director of Research and Technical Assessment in the Office of Energy Research.
From 1972 to 1978, Dr. Powers served as a consultant to the Department of
Defense (DOD), Department of Energy (DOE), the Federal Energy Administration,
and the Energy Research and Development Administration (ERDA). During this
period, he assessed the performance of advanced weapons systems, prepared the
ERDA Electric Utility Study and developed the National Coal Model. In 1954, at
the age of 19, Powers 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, Pennsylvania, 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


                                       19
<PAGE>

(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.

(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 2006, and we believe that each person who, at any time
during 2006, 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 2006, except as follows: (1) Jack Young did not file a Form 5; (2)
Patrick Herda did not file one Form 4 relating to the disposition the one
million shares , and (3) John Powers did not file a Form 4 relating to the
exercise of his 250,000 common stock options.

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:

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


                                       20
<PAGE>

      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 10. EXECUTIVE COMPENSATION

The following table shows compensation paid to our Executive Officers during the
two fiscal periods ended December 31, 2005 and December 31, 2006.

                              SUMMARY COMPENSATION

<TABLE>
<CAPTION>
                                                                                Non-Equity      Nonqualified       All
Name                                                                          Incentive Plan      Deferred        Other
and                                                  Stock        Option         Compensa-      Compensation    Compensa-
Principal                    Salary        Bonus    Awards        Awards           tion           Earnings         tion       Total
Position             Year      ($)          ($)       ($)          ($)              ($)              ($)           ($)         ($)
------------------   ----   ---------      ------   -------   -------------   ---------------   -------------   ----------   -------
(a)                  (b)       (c)          (d)       (e)          (f)               (g)              (h)           (i)         (j)
<S>                  <C>    <C>            <C>      <C>       <C>             <C>               <C>             <C>          <C>
Patrick Herda,       2006   110,000(1)      -0-       -0-          -0-               -0-              -0-           -0-      110,000
Pres., CEO and       2005   150,000(1)      -0-       -0-          -0-               -0-              -0-           -0-      110,000
Director (1)

Ken Faith, CFO       2006      -0-          -0-      44,250        -0-               -0-              -0-           -0-       44,250
and Director (2)

Jack Young, V.P      2006      -0-          -0-       -0-          -0-               -0-              -0-           -0-         -0-
                     2005      -0-          -0-       -0-          -0-               -0-              -0-           -0-         -0-

John Dempsey(3)      2005   120,000         -0-       -0-          -0-               -0-              -0-           -0-         -0-

</TABLE>

(1) Patrick Herda, as the President had a 2006 annual base salary of $110,000.
For the year ended 2006, he was paid $91,060. For the year ended 2005, Mr. Herda
was paid $53,263. For year 2007, Mr. Herda's base annual salary is $55,000. All
unpaid salary has been accrued. As of December 31, 2006, Mr. Herda's accrued
unpaid executive compensation was $561,927.

(2) Kenneth Faith joined the Company in the last quarter of fiscal year 2006.

(3) John Dempsey, former vice-president, had an annual base salary of $120,000.
During the year ended December 31, 2005, Mr. Dempsey was paid $21,500 of his
salary and the unpaid balance was accrued as a corporate obligation. As of
December 31, 2006, Mr. Dempsey's accrued unpaid compensation was $328,799. Mr.
Dempsey took an overseas assignment with the U.S. Dept. of State and temporarily
resigned his company positions effective September 5, 2005

GRANTS OF PLAN-BASED AWARDS We made no grants from plans to any executive
officer during the fiscal year ended December 31, 2006.

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,
2006.

DIRECTOR COMPENSATION

The Company has not established any policy concerning director compensation. No
directors received any compensation during the fiscal year ended December 31,
2006.


                                       21
<PAGE>

ITEM 11. Security Ownership of Certain Beneficial Owners and Management.

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, 2006. Beneficial Ownership of more than 5% based on
53,665,644 common shares.

Beneficial Ownership of 5%.

(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 53,665,644 shares as set forth in
(a) above as of December 31, 2006.

Table 2.

(1)                 (2)                        (3)                   (4)
Title of Class      Name and Address           Amount and Nature     Percent of
                                                                       Class

Common Stock

Patrick Herda       5505 Connecticut Ave NW           -0-               0.0%
                    Suite 191
                    Washington, DC 20015

John Powers         5505 Connecticut Ave NW         270,000             0.5%
                    Suite 191
                    Washington, DC 20015

Jack Young          5505 Connecticut Ave NW           -0-               0.0
                    Suite 191
                    Washington, DC 20015

Ken Faith           5505 Connecticut Ave NW         75,000(1)           0.14
                    Suite 191
                    Washington, DC 20015

         Total                                      345,000             0.64%

      (1)   On October 9, 2006, the board of directors authorized the issuance
            of 75,000 restricted shares as initial compensation for Mr. Faith's
            commitment to join the company as CFO.

(c) Changes in Control. None.

ITEM 12. Certain Relationships and Related Transactions.

(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 October 9, 2006, the board of directors authorized the issuance of
      75,000 restricted shares as initial compensation for Mr. Faith's
      commitment to join the company as CFO.

      On August 22, 2006, John Powers exercised his common stock option and
acquired 250,000 shares at an exercise price of $25,000.

      On July 22, 2005, we issued John Powers, a company officer and director,
250,000 common stock options. The options are immediately exercisable at Ten
($0.10) Cents per share. The option expires on July 22, 2007. We valued the
option grant at $162,500.

      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.


                                       22
<PAGE>

      The officers and directors are involved in other business activities and
may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts
except as may be required by our Code of Ethical Conduct.

(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 13. Exhibits

         (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 Conduct

         21       List of subsidiaries

         23.1     Consent of Russell Bedford Stefanou Mirchandani LLP

         31.1     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.

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 2005 and 2006, Russell Bedford
Stefanou Mirchandani, LLP as our auditor for our fiscal year ending December 31,
2004.

                        Year End 12-31-05       Year End 12-31-06
                        ------------------      ------------------

Audit Fees                         $40,000                 $57,040
Audit-related Fees                     -0-                     -0-
Tax Fees                               -0-                     -0-
All other fees                         -0-                     -0-
Total Fees                         $40,000                 $57,040


                                       23
<PAGE>

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 2006
or 2005.

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 2006 or 2005.

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

      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 2006 did not engage
any other persons or firms other than the principal accountant's full-time,
permanent employees.


                                       24
<PAGE>

                                   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: March 30, 2007

Nuclear Solutions, Inc.


/s/ Patrick Herda                                 /s/ Kenneth Faith
------------------------------                    ------------------------------
By: Patrick Herda                                 By: Kenneth Faith
Title: President, CEO, Director                   Title: CFO, Director


      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                                                 March 30, 2007
------------------------------
By: Patrick Herda
Title: President, CEO, Director


/s/ Kenneth Faith                                                 March 30, 2007
------------------------------
By: Kenneth Faith
Title: CFO, Director


                                       25
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                               DECEMBER 31, 2006

                             NUCLEAR SOLUTIONS, INC.


                                      F-1
<PAGE>

                             NUCLEAR SOLUTIONS, INC.

                          Index to Financial Statements

                                                                       Page No.
Report of Registered Independent Certified Public
   Accounting Firm                                                       F-3
Consolidated Balance Sheet at December 31, 2006                          F-4
Consolidated Statements of Losses for the years ended
   December 31, 2006 and 2005                                            F-5
Consolidated Statements of Deficiency in Stockholders'
   Equity for the two years ended December 31, 2006                      F-6
Consolidated Statements of Cash Flows for the years
   ended December 31, 2006 and 2005                                      F-7
Notes to Consolidated Financial Statements                           F-8 to F-19


                                      F-2
<PAGE>

                    RUSSELL BEDFORD Stefanou MIRCHANDANI LLP
                          Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTANTING 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, 2006 and the
related consolidated statements of losses, deficiency in stockholders' equity,
and cash flows for each of the two years in the period ended December 31, 2006.
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, 2006, and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 2006, in
conformity 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/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                      --------------------------------------------
                      Russell Bedford Stefanou Mirchandani LLP
                      Certified Public Accountants

New York, NY
March 28, 2007


                                      F-3
<PAGE>

                             NUCLEAR SOLUTIONS, INC.
                                 AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET

                                                             December 31,
                                                                 2006
                                                             ------------

ASSETS

Current assets:
     Cash                                                    $     31,451
     Prepaid Expenses                                               9,200
                                                             ------------

Total current assets                                               40,651

Property and equipment, net of accumulated depreciation
  of $21.718                                                       13,926

Other assets                                                        9,300

                                                             ------------
Total assets                                                 $     63,877
                                                             ============

LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses                   $  3,179,367
     Accrued executive compensation                             1,033,392
     Convertible notes payable - related parties (Note 8)          39,000
     Convertible notes payable - other                            903,711
                                                             ------------

Total current liabilities                                       5,155,470
                                                             ------------


Commitments and contingencies (Note 10)

Deficiency 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, 53,665,644 issued and
       outstanding                                                  5,367
     Additional paid-in capital                                10,927,066
     Deferred equity based expense                               (605,954)
     Accumulated deficit                                      (15,418,072)
                                                             ------------

Total deficiency in stockholders' equity                       (5,091,593)
                                                             ------------

Total liabilities and deficiency in stockholders' equity     $     63,877
                                                             ============

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


                                      F-4
<PAGE>

                             NUCLEAR SOLUTIONS, INC.
                                 AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF LOSSES

                                           For the Years Ended December 31,
                                                2006            2005
                                            ------------    ------------

Revenue                                     $    223,000    $    302,500
                                            ------------    ------------
Operating Expenses
Executive compensation                           110,000         432,500
Consulting                                     2,635,488       2,917,791
Legal and professional fees                    1,085,157         551,565
General and administrative expenses              137,477         104,817
Depreciation and amortization                      5,812           5,483

                                            ------------    ------------
Total Operating Expenses                       3,973,934       4,012,156
                                            ------------    ------------

Loss from operations                          (3,750,934)     (3,709,656)

Other Income(expenses)
      Interest expense                          (134,144)       (110,614)
      Finance costs                                    -         (60,000)
                                            ------------    ------------
Loss before provision for income taxes        (3,885,078)     (3,880,270)

Provision for income taxes                             -               -
                                            ------------    ------------
Net loss                                    $ (3,885,078)   $ (3,880,270)
                                            ============    ============

Basic and diluted loss per share            $      (0.08)   $      (0.10)
                                            ============    ============

Weighted average number of common shares
      outstanding, basic and diluted          49,474,808      40,542,060
                                            ============    ============

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


                                      F-5
<PAGE>

                             NUCLEAR SOLUTIONS, INC.
                                 AND SUBSIDIARY
          CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                    FOR THE TWO YEARS ENDED DECEMBER 31, 2006

<TABLE>
<CAPTION>
                                                                                        Deferred                          Total
                                                     Common Stock       Additional       Equity                       Deficiency in
                                                 --------------------     Paid-In         Based        Accumulated     Stockholders'
                                                   Shares      Amount     Capital        Expense         Deficit          Equity
                                                 -----------   ------   -----------    -----------    -------------    ------------
<S>                                              <C>           <C>      <C>            <C>            <C>              <C>
Balance, January 1, 2005                          36,598,646   $3,660   $ 4,786,346    $  (385,287)   $  (7,652,724)   $ (3,248,005)

Shares issued for services                         4,402,940      440     2,689,467       (930,245)               -       1,759,662


Beneficial conversion discount-
  convertible note and warrants                            -        -        60,000              -                -          60,000

Amortization of deferred compensation                      -        -             -        951,642                -         951,642

Shares issued for accrued expenses                 2,510,223      251       463,189              -                -         463,440

Intrinsic value of options issued to a director            -        -       162,500              -                -         162,500

Shares issued for payment of debt                    454,054       46        67,154              -                -          67,200

Net loss                                                   -        -             -              -       (3,880,269)     (3,880,269)
                                                 -----------   ------   -----------    -----------    -------------    ------------

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              -                -       1,104,715

Shares issued for accrued expenses                 2,192,779      219     1,077,226              -                -       1,077,445

Shares issued for payment of debt                  4,989,545      499       460,721              -                -         461,220

Stock issued upon exercise of options                250,000       25        24,975              -                -          25,000

Stock issued upon cashless exercise of warants       821,358       82           (82)             -                -               -

Beneficial conversion feature                              -        -        31,000              -                -          31,000

Deferred compensation                                      -        -             -     (1,562,525)               -      (1,562,525)

Amortization of deferred compensation                      -        -             -      1,320,461                -       1,320,461

Net 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)
                                                 ===========   ======   ===========    ===========    =============    ============
</TABLE>

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


                                      F-6
<PAGE>

                             NUCLEAR SOLUTIONS, INC.
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      For the Years Ended December 31,
                                                                           2006              2005
                                                                      --------------    --------------
<S>                                                                   <C>               <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                              $   (3,885,078)   $   (3,880,269)
Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation and amortization                                                5,812             5,483
  Amortization of debt discount - beneficial conversion feature of                                   -
  convertible note and warrants                                               31,000                 -
  Financing Cost attributable to warrants                                          -            60,000
  Stock and warrants issued for services                                   2,425,176         3,337,244
Changes in operating assets and liabilities:
  Accounts receivable                                                         60,000           (60,000)
  Prepaid Expenses                                                            (9,200)
  Other Assets                                                                (7,500)
  Accounts payable and accrued expenses                                    1,349,368           241,407
  Accrued executive compensation                                             (19,393)          195,236
                                                                      --------------    --------------

Net cash used in operating activities                                        (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:
Payments on debt                                                                   -           (12,425)
Proceeds from issuance of debt                                                41,000            60,000
Proceeds from sale of common stock                                            25,000                 -
                                                                      --------------    --------------

Net cash provided by financing activities                                     66,000            47,575
                                                                      --------------    --------------

Net increase in cash                                                           8,755           (53,324)

Cash, beginning of period                                                     22,696            76,020
                                                                      --------------    --------------

Cash, end of period                                                   $       31,451    $       22,696
                                                                      ==============    ==============

Supplemental disclosures:
Cash paid for:
  Interest                                                            $            -    $            -
  Income taxes                                                        $            -    $            -

Non-cash investing and financial activities:
Amortization of debt discount - beneficial conversion feature of
convertible note and warrants                                         $       31,000    $            -
Payment of debt and interest with common stock                        $      461,220    $       67,200
Beneficial conversion discount                                        $       31,000    $       60,000
Payment of accrued expenses with common stock                         $    1,077,445    $            -
</TABLE>

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


                                      F-7
<PAGE>

                             NUCLEAR SOLUTIONS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

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. 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 12, 2001, the Company amended its articles of incorporation to
change its name to Nuclear Solutions, Inc.

On September 2, 2005 the Company formed a wholly owned subsidiary, Fuel
Frontiers Inc., formally, Future Fuels, Inc., which has had minimal operations
through December 31, 2006.

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

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 Concentration

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

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.

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, 2006 or 2005.

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.

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-8
<PAGE>

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, 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, 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-9
<PAGE>

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, 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, 2006 and 2005, the Company had 10,806,455 and
15,498,865 potentially dilutive securities.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any items of comprehensive
income in any of the periods presented.

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.

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.


                                      F-10
<PAGE>


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.

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 is as follows:

                                                          FOR THE YEAR
                                                          DECEMBER 31,
                                                              2005
                                                          ------------
       Net loss as reported ...........................   $ (3,880,269)

       Current period expense calculated under APB 25 .        162,500


       Stock 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 a
net loss of $3,885,078 and $3,880,269 during the years ended December 31, 2006
and 2005, respectively. The Company's current liabilities exceeded its current
assets by $5,114,819 as of December 31, 2006. Consequently, its operations are
subject to all risks inherent in the establishment of a new business enterprise.


                                      F-11
<PAGE>

New Accounting Pronouncements

On February 16, 2006 the Financial Accounting Standards Board (FASB) issued SFAS
155, "Accounting for Certain Hybrid Instruments," which amends SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," and SFAS 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." SFAS 155 allows financial instruments that have embedded
derivatives to be accounted for as a whole (eliminating the need to bifurcate
the derivative from its host) if the holder elects to account for the whole
instrument on a fair value basis. SFAS 155 also clarifies and amends certain
other provisions of SFAS 133 and SFAS 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. The Company does not expect its adoption of this new
standard to have a material impact on its financial position, results of
operations or cash flows.

In July 2006, the FASB issued FASB Interpretation (FIN) No. 48, "Accounting for
Uncertainty in Income Taxes--An Interpretation of FASB Statement No. 109" (FIN
48). This Interpretation clarifies the accounting for uncertainty in income
taxes recognized in a company's financial statements. FIN 48 requires companies
to determine whether it is "more likely than not" that a tax position will be
sustained upon examination by the appropriate taxing authorities before any part
of the benefit can be recorded in the financial statements. It also provides
guidance on the recognition, measurement and classification of income tax
uncertainties, along with any related interest and penalties. FIN 48 will also
require significant additional disclosures. This Interpretation will be
effective for fiscal years beginning after December 15, 2006. We will implement
this Interpretation in the first quarter of 2007 on a prospective basis. We are
currently evaluating the potential impact this Interpretation will have on our
financial position and results of operations.

In September 2006 the Financial Account Standards Board (the "FASB") issued its
Statement of Financial Accounting Standards 157, Fair Value Measurements. This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practice. FAS 157 effective date is for fiscal
years beginning after November 15, 2007. The Company does not expect adoption of
this standard will have a material impact on its financial position, operations
or cash flows.

In September 2006, the SEC staff issued Staff Accounting Bulletin (SAB) No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 was
issued in order to eliminate the diversity of practice in how public companies
quantify misstatements of financial statements, including misstatements that
were not material to prior years' financial statements. We will initially apply
the provisions of SAB 108 in connection with the preparation of our annual
financial statements for the year ending December 31, 2006. We have evaluated
the potential impact SAB 108 may have on our financial position and results of
operations and do not believe the impact of the application of this guidance
will be material.

SFAS 157. In September 2006 the Financial Account Standards Board (the "FASB")
issued its Statement of Financial Accounting Standards 157, Fair Value
Measurements. This Statement defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. This Statement applies under
other accounting pronouncements that require or permit fair value measurements,
the Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this Statement
does not require any new fair value measurements. However, for some entities,
the application of this Statement will change current practice. FAS 157
effective date is for fiscal years beginning after November 15, 2007. The
Company does not expect adoption of this standard will have a material impact on
its financial position, operations or cash flows.


                                      F-12
<PAGE>

SFAS 158. In September 2006 the FASB issued its Statement of Financial
Accounting Standards 158 "Employers' Accounting for Defined Benefit Pension and
Other Postretirement Plans". This Statement improves financial reporting by
requiring an employer to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions. The effective date for an employer with publicly traded equity
securities is as of the end of the fiscal year ending after December 15, 2006.
The Company does not expect adoption of this standard will have a material
impact on its financial position, operations or cash flows.

Reclassifications

Certain items in the 2005 financial statements have been reclassified to conform
to the current period presentation.


                                      F-13
<PAGE>

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 $3,885,078
for the year ended December 31, 2006, and a working capital deficiency of
$5,114,819 and a stockholders' deficiency of $5,091,593 at December 31, 2006.
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.

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:

                       U.S federal statutory                 (35.0%)
                       rate
                       Valuation                              35.0%
                                                             -----
                       reserve
                       Total                                    --%
                                                             =====


As of December 31, 2006, 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          Expiration
                         ----            ------          ----------

                         1997                  $830           2017
                         1998                   $36           2018
                         1999                $1,366           2019
                         2000               $28,719           2020
                         2001            $1,318,403           2021
                         2002            $1,975,976           2022
                         2003            $1,938,928           2023
                         2004            $2,388,466           2024
                         2005            $3,880,269           2025
                         2006            $3,885,078           2026


                                      F-14
<PAGE>

NOTE 5 - PROPERTY AND EQUIPMENT

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

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


Depreciation expense totaled $5,812 and $5,483 for the years ended December 31,
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 is 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, 2006, 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, 2006, the balance of accrued executive compensation
was $561,926.

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, 2006, 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, 2006 are as follows:


<TABLE>
<CAPTION>
   <S>                                                                                <C>
    Denise Barbato,  bearing  interest at 10% per year,  convertible into common
    stock at $0.084 per share. The note is payable on August 30, 2007                  $    862,711
    Denise Barbato,  bearing interest at 10% per year, convertible into common stock
    at $0.084 per share. The note is payable on August 30, 2007                              31,000
    Global  Atomic Inc.  demand note  payable to related  party at 10% per year,
    convertible into common stock at $1.00 per share                                          4,000
    International  Fission demand note payable to related party at 10% per year,
    convertible into common stock at $1.00 per share                                         15,000
    Jackie Brown,  demand note payable to related party, non -interest  bearing,
    convertible into common stock at $1.00 per share                                         20,000
    Long Lane  Capital  demand  note at 12 % per year                                        10,000
                                                                                        -----------
    Total notes payable                                                                     942,711

    Less: current portion                                                                  (942,711)
                                                                                       ------------
    Balance notes payable (long term portion)                                          $         --
                                                                                       ============
</TABLE>


                                      F-15
<PAGE>

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 January 31, 2007. 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 $110,424.63 of principle and $47,495.37 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 February, 2006, the Company received $10,000 from Long Lane Capital
pursuant to a demand promissory note bearing interest at 12% per year.

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, 2006, the amount due is $4,000 in principal and $2,200 in
accrued interest.

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, 2006, the amount due is $15,000 in principal and
$7,625 in accrued interest.

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, 2006, the Company has issued and
outstanding 53,665,644 shares of common stock.

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
<PAGE>

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.

As a result of the above exercises, there are no outstanding options or warrants
at December 31, 2006.

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 2,514,723 shares as payment of expenses
accrued at December 31, 2004 in the amount of $467,940.

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

NOTE 11 -OPTIONS AND WARRANTS


                                      F-17
<PAGE>

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, 2006


<TABLE>
<CAPTION>
                                                     Number of Shares    Weighted Average Exercise
                                                                                  Price
                                                     ----------------    -------------------------
     <S>                                             <C>                 <C>
     Outstanding at January 1, 2005                           750,000    $                    0.34
       Granted                                                750,000                         0.18
       Exercised                                                   --                           --
       Canceled or expired                                   (250,000)                        0.75
                                                     ----------------    -------------------------
     Outstanding at December 31, 2005                       1,250,000                         0.34
       Granted                                                     --                           --
       Exercised                                           (1,250,000)                        0.34
       Canceled or expired                                         --                           --
                                                     ----------------    -------------------------
     Outstanding at December 31, 2006                              --    $                      --
                                                     ================    =========================
</TABLE>


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.

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.

NOTE 13 - SUBSEQUENT EVENTS

Subsequent to December 31, 2006 the Company issued 1,294,355 shares of common
stock valued at $832,639 for consulting services.


                                      F-18
<PAGE>

On January 10, 2007 the company issued 2,125,000 shares valued at $178,500 as a
partial payment for the January 8th, 2004 debt consolidation agreement.

On February 28, 2007, the Company entered into a settlment agreement resolving a
dispute with Randy Thomas werein the Company issued 200,000 restricted common
shares valued at $130,000 in full and final settlment of the dispute.

On March 16, 2007, the company issued Long Lane Capital, Inc., 25,000
restricted common shares as repayment for a loan includingthe shares were valued
at $11,395.

On March 22, 2007, the Company entered into a twelve month Revolving Line of
Credit Agreement (the "Agreement") with Long Lane Capital, Inc. ("LLC") . LLC
agreed to provide a $100,000 line of credit at 12% interest. On March 22, 2007,
LLC advanced the Company the sum of $37,060.52. All sums advanced, including
accrued interest, are convertible at LLC's option into Company restricted common
shares at a Fifty percent discount to the lowest closing bid price between March
22, 2007 and the conversion date, subject to a floor price of Ten Cents per
share. Additionally, in connection with the Agreement, the Company granted LLC a
common stock purchase warrant for 500,000 restricted common shares at the same
exercise pricing, including an option for cashless exercise.


                                      F-19