U.S.
Securities and Exchange Commission


Washington,
D.C. 20549





FORM
10-K





(Mark
One)


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


For the
fiscal year ended December 31, 2008.




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


For the
transition period from _________ to _________


Commission
file number 000-31959





Nuclear Solutions,
Inc.


(Name of
Small Business Issuer in its Charter)





Nevada
                
                88-0433815(State
      of Incorporation)
                
                (IRS
      Employer Identification
No.)





5505 Connecticut Ave., Ste. 5505, Washington,
      D.C.
                  
                  20015(Address
      of principal executive offices)
                  
                  (Zip
      Code)





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





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





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


Common
Stock, $0.0001 Par Value





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





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





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





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. Large accelerated filer o Accelerated filer  ̈
Non-accelerated filer  ̈
Smaller reporting company x





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




As of the
last business day of the registrant's most recently completed second fiscal
quarter, June 30, 2009, the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by the average of the bid and ask
price of the common equity was $15,689,051.









Nuclear
Solutions, Inc.


FORM
10-K


December
31, 2008




PagePART IITEM
      1.
                      Description
      of Business
                      
                      3ITEM
      1A.
                      Risk
      Factors
                      
                      10ITEM
      1B.
                      Unresolved
      Staff Comments.
                      
                      16ITEM
      2.
                      Description
      of Properties
                      
                      16ITEM
      3.
                      Legal
      Proceedings
                      
                      16ITEM
      4.
                      Submission
      of Matters to Vote of Security Holders
                      
                      16PART IIITEM
      5.
                      Market
      for Common Equity, Related Stockholder Matters and Issuer Purchases of
      Equity Securities
                      
                      16ITEM
      6.
                      Selected
      Financial Data
                      
                      18ITEM
      7.
                      Management's
      Discussion and Analysis or Plan of Operation
                      
                      18ITEM 7A.
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      
                      20ITEM
      8.
                      Financial
      Statements and Supplementary Data
                      
                      F-1ITEM
      9.
                      Changes
      In and Disagreements With Accounting and Financial
    Disclosure
                      
                      21ITEM 9A.
                      Controls
      and Procedures
                      
                      21ITEM 9B.
                      Other
      Information
                      
                      22PART IIIITEM
      10.
                      Directors,
      Executive Officers and Corporate Governance
                      
                      22ITEM
      11.
                      Executive
      Compensation
                      
                      26ITEM
      12.
                      Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                      
                      28ITEM
      13.
                      Certain
      Relationships and Related Transactions and Director
      Independence
                      
                      29ITEM
      14.
                      Principal
      Accounting Fees and Services
                      
                      29PART IVITEM 15.
                      Exhibits
      and Financial Statement Schedules
                      
                      30SIGNATURES
                      
                      31


2








CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This
annual report on Form 10-K contains many forward-looking statements, which
involve risks and uncertainties, such as our plans, objective, expectations and
intentions. You can identify these statements by our use of words such as "may,"
"expect," "believe," "anticipate," "intend," "could," "estimate," "continue,"
"plans," or other similar words or phrases. Some of these statements include
discussions regarding our future business strategy and our ability to generate
revenue, income, and cash flow. We wish to caution the reader that all
forward-looking statements contained in this Form 10-K are only estimates and
predictions. Our actual results could differ materially from those anticipated
as a result of risk facing us or actual events differing from the assumptions
underlying such forward-looking statements. Readers are cautioned not to place
undue reliance on any forward-looking statements contained in this Annual Report
on Form 10-K. Readers are cautioned not to place undue reliance on these
forward-looking statements. We undertake no obligation to update any of these
factors or to publicly announce any change to our forward-looking statements
made herein, whether as a result of new information, future events, changes in
expectations or otherwise.
 
 (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.
On September 12, 2001, the Company amended its articles of incorporation to
change its name to Nuclear Solutions, Inc. At that time, our primary business
was the development of a new type of nuclear reactor technology. As of the date
of this report, our business is now focused on the production of synthetic
diesel fuel from coal concentrating its efforts exclusively on coal-to-diesel
projects already underway in the state of Kentucky.
 
 (b) Business of the
Issuer.
 
 Nuclear
Solutions, Inc. and its wholly owned subsidiary, Fuel Frontiers, Inc. is engaged
in the research, development, and commercialization of innovative technologies
and processes, which are generally early-stage, theoretical or commercially
unproven. We operate a highly technical business and our primary mission is to
develop facilities to produce ultra-clean synthetic diesel from coal and other
materials using a plasma-based gasification system and a conventional synthesis
gas-to-fuel reforming system based upon Fisher-Tropsch technology.
 
 In 2008,
The Board of Directors elected to focus the company exclusively on the
production of synthetic fuels through the FFI subsidiary. Prior to that, the
company was developing nuclear technologies in the areas of shielded nuclear
material detection and nuclear micro-batteries in addition to the production of
synthetic fuels. Due to the difficulties encountered in raising capital in a
declining economic climate coupled with the limited resources of the company,
management made the decision to place all nuclear technology development
programs into a dormant state.  The company will continue to maintain
the intellectual property associated with the shielded nuclear detection
technology program and will seek a buyer or a master licensee for the
patents.  The company is discontinuing all further business
development associated with nuclear micro battery technology and other nuclear
legacy technologies.
 
 Production of Ultra-Clean
Synthetic Fuels through our subsidiary Fuel Frontiers, Inc.
 
 In 2005,
the company entered the ultra-clean synthetic fuels business through a new
subsidiary called Fuel Frontiers, Inc. (formerly known as Future Fuels, Inc.).
The primary business of Fuel Frontiers, Inc. (FFI) is to plan, design, finance,
construct, and operate multiple gas-to-liquid synthetic fuel synthesis
facilities worldwide to transform virtually cost-free waste materials such as
used tires, waste coal, solid and liquid municipal wastes, biomass, and other
similar low-value societal refuse into high-value gas-to-liquid fuels such as
ultra-clean diesel.
 
 Fuel
Frontiers, Inc. (FFI) is focused on the production of ultra-clean GTL Diesel
fuel.
 Management
made a decision to concentrate on the market for ultra-clean GTL Diesel fuel due
to the maturity and stability of the diesel market place and the greater
certainties associated with distribution, integration, production costs and
profit margins.
 
 Originally,
our approach to the production of ultra-clean synthetic fuel was highly focused
on the utilization of virtually cost free waste materials as feedstock for our
process.
 
 We
believe our approach to the production of ultra-clean synthetic fuels is
differentiated by our business model and technical approach. Our business model
focuses on the flexibility to use virtually cost free waste materials, some of
which are renewable, in combination with conventional feed stocks such as coal
or petroleum coke, as opposed to other approaches which must lock in a certain
type of homogeneous feedstock. Our technical approach involves the use of a
low-emission plasma processing (gasification) system to convert the waste
materials into synthesis gas which is then converted into ultra-clean synthetic
diesel.
 
 3
  System
Overview
 
 The FFI
approach for the production of ultra-clean diesel occurs in two stages. In the
first stage the feedstock material is fed into a plasma processing system such
as the Westinghouse Plasma Gasifier (WPG) which transforms the feedstock
material into synthesis gas, which is composed of carbon, hydrogen and oxygen.
The heart of Westinghouse’s Plasma Gasifier contains a plasma field that reaches
temperatures up to 30,000 degrees Centigrade. The plasma breaks down feedstock
materials--such as coal, used tires, wood wastes as well as petroleum coke and
other materials--to their core elements in a clean and efficient manner which
generates significant amounts of synthesis gas. Excess heat energy is removed
from the resulting synthesis gas and recovered to generate electricity on-site
which can be used to provide power to the system. The cooled synthesis gas is
then refined for purity and passed to the second stage. In the second stage, the
refined synthesis gas, which is composed primarily of carbon, hydrogen and
oxygen, is converted into ultra-clean diesel though a modified Fischer-Tropsch
gas-to-liquids synthesis process for diesel fuels. The process applies a
metallic catalyst to chemically transform the synthesis gas into a liquid fuel
which is then refined to fuel-grade standards. This approach is not entirely
new, as early as 1936 in Germany similar technology was used with coal-produced
synthesis gas to produce diesel and alcohols on a commercial scale. The FFI
approach to ultra-clean synthetic fuel production differs from other approaches
mainly because our system can utilize multiple feedstock materials that are
normally difficult to utilize in a conventional gasifier. The ability to use
heterogeneous materials is a benefit of a plasma processing system. The
Westinghouse Plasma Gasifier has the proven capability to transform a wide
variety of waste materials into the synthesis gas in an efficient and
environmentally friendly manner.
 
 Notable
Events
 
 On
November 3, 2005, FFI signed a land lease agreement with Venture III Associates,
a New Jersey General Partnership, and a permit and feedstock agreement with
Ocean County Recycling Center, Inc., a New Jersey corporation.
 
 FFI
entered into a fifteen-year land lease with Venture III Associates, renewable
for up to 90 years, for an approximate six-acre site in Toms River, New Jersey
to build a proposed 52 million gallon waste-to-fuel production facility in
exchange for 1,000,000 shares of FFI common stock. When the facility commences
operations FFI will pay Venture III $240,000 dollars annually in equal monthly
installments, plus three (3%) percent of the net operating profit of the
waste-to-fuel facility when the facility begins operations. The payment of the
1,000,000 shares of FFI common stock was deferred by Venture III until
groundbreaking occurs for the waste to fuel facility on said property.
Originally, this project was intended to produce synthetic ethanol. Due to
unfavorable market conditions for ethanol and local community concerns this
project is being reevaluated by management to determine an appropriate
technology and target product that will present a viable and attractive
opportunity to our shareholders and the local community.
 
 In 2007,
FFI and Connecticut-based Startech Environmental Corporation have mutually
terminated their global strategic alliance to utilize startech plasma
gasification systems, which was originally entered into on March 13,
2006.
 
 In 2007,
we paid $100,000 to Westinghouse Plasma Corporation (WPC) for engineering
services related to the design engineering of a Westinghouse Plasma Gasification
system intended for an FFI synthetic diesel facility.
 
 In
February 2008, FFI paid Shaw Stone & Webster (Shaw), a division of The Shaw
Group Inc., for engineering services that will provide a technical basis for a
400 Tonne per day Coal-To-Liquid (CTL) Ultra-Clean Diesel fuel production
facility in Muhlenberg County, Kentucky.
 
 On July
23, 2008, Jack Young, 79, Vice President of Nuclear Solutions, Inc. and
President of our subsidiary, Fuel Frontiers, Inc., tendered his resignation from
both executive officer positions. Subsequently, on July 24, 2008, the board of
directors appointed David C. Maland, 52, to succeed Mr. Young as President of
Future Fuels, Inc. (FFI). Prior to his appointment as president, Mr. Maland was
an independent business consultant for the last five years.
 
 4
  Development Agreement and
Amendments:
 
 In 2007,
Kentucky fuel Associates agreed to pay Fuel Frontiers, Inc. $2,000,000 per
facility as associated with a Development Agreement between FFI and Kentucky
Fuel Associates, Inc. (herein, KFA) which was originally signed on July 30, 2007
and subsequently amended twice.
 
 The
purpose of the Development Agreement is to initially explore development
opportunities for a coal-to-gas-to-liquid fuels (CTL) production facility in the
State of Kentucky. FFI has focused corporate efforts in the area of CTL
production technologies. KFA has expertise and business relationships in
Kentucky which may compliment FFI’s CTL efforts.
 
 FFI has
granted KFA the exclusive right to locate and develop CTL production projects in
the State of Kentucky and the non-exclusive right to perform the same functions
throughout the United States. KFA will also have the right to match any third
parties proposals for CTL production projects in the United States, subject to
FFI’s approval.
 
 In
consideration of the Development Agreement and for each site located by KFA and
accepted by FFI for development, FFI has agreed to pay KFA Seven (7%) percent of
the net pre-tax income for each CTL production facility for the life of each
facility. Additionally, in consideration for KFA’s $2,000,000 funding, FFI will
grant KFA a two and one-half (2.5%) percent equity interest in the first CTL
facility developed by KFA.
 
 The
Development Agreement has a ten (10) year term and is renewable, at the election
of the parties, for an additional five (5) year term. The Agreement may be
terminated for a breach of any material provision which remains uncured for more
than ninety (90) days following written notice of the breach.
 
 On
September 3, 2008, FFI received $625,000 from Kentucky Fuel Associates. These
funds were initially granted to KFA by Muhlenberg County, Kentucky for the
design, engineering and related development expenditures for a Coal-to-Liquids
(“CTL”) facility to be located in Muhlenberg county designated for the
production of ultra-clean synthetic diesel fuel from local coal. In May 2008,
KFA announced it would assign the $625,000 grant over to its development partner
Fuel Frontiers, Inc. The $625,000 received represents a partial payment
associated with this Development Agreement.
 
 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.
 
 Currently,
we are focusing our efforts in the state of Kentucky, Muhlenberg County for our
first coal to ultra-clean diesel production facility. The projected output of a
typical project can range from approximately 50,000,000 gallons per year to
200,000,000 gallons per year. We currently estimate that the inside battery
limits cost of an ultra-clean synthetic diesel waste-to-fuel facility producing
approximately 50,000,000 gallons per year could range from $300,000,000 to
$400,000,000. This estimate range is qualified by the fact that the actual cost
of any facility can be significantly affected by factors such as the exact
nature and terms of the project, the market price for engineering, labor and raw
construction materials and any environmental or regulatory costs which are
highly project dependent. We will require additional capital to develop these
projects. Over the next twelve months, we anticipate raising additional capital
through debt, grants or equity financing. The financing requirements for each
project can be substantially different from one another and may or may not
result in significant dilution and or increased indebtedness of the
company.
 
 We intend
to build our facilities with modular expansion capability to allow for increased
future production and/or gasification of additional or diverse feedstock (waste
materials). As of the date of this report, we have retained Stone and Webster,
LTD. Of Milton Keynes, England, a subsidiary of the Shaw Group for design
engineering, procurement, construction, and production operations for our
renewable fuel projects currently in the planning stages. As a matter of policy
and our business model, we intend to outsource engineering, procurement,
construction as well as daily facility management and operations of any future
facilities to qualified and experienced providers.
 
 Over the
next twelve months, we anticipate that FFI's development efforts will continue
to focus on engineering plant designs as well as project development and
financing. These elements will play critical roles in the establishment of FFI's
waste-to-fuel projects. While we believe that the appropriate technologies for
waste-to-synthetic fuels such as ultra-clean diesel are commercially available,
there is, however, no guarantee that commercially available technologies will be
appropriate in every instance for the production of fuels and any of FFI's
proposed facilities. Moreover, there could be unexpected problems or delays in
the funding, construction and operation of the facility. There is no guarantee
that FFI will be successful in raising the capital required for this project.
Over the next twelve months we anticipate that FFI will require a minimum of
approximately $500,000 to sustain operations. We anticipate raising this money
through debt and/or equity financing which may result in substantial dilution,
and/or increase the company's indebtedness.
 
 5
  About Our Nuclear Technology
Development Business:
 
 Please
note: The company’s nuclear technologies are no longer under active development.
This section is being provided as a matter of historical reference and as a
historical reference to provide a background into the previous business
development efforts of the company.
 
 The
company operates this business by hiring technical expertise to develop
innovative and emerging technologies that we believe have significant market
potential. We strive to develop technologies identified as viable to the point
that they may be licensed, joint-ventured or sold to an industrial or
governmental entity, or otherwise commercialized. We do not maintain technical
facilities or a laboratory of our own. Our business model is to utilize the
technical facilities and capabilities of appropriate outside laboratories under
contract to us when appropriate. By taking advantage of existing technology
infrastructures, this preferred method of technology development reduces capital
investment costs and the length of time required to develop technologies. This
is especially important in light of the extensive requirements for the
government approval and safe handling of nuclear materials. Any development
efforts contemplated or planned that involve nuclear materials are intended to
be carried out by an existing and already licensed scientific or technical
facility through the establishment of a contractual relationship. This approach
also mitigates the potential liability involved with the handling and use of
nuclear materials. We have identified several facilities in the United States
and abroad that have the capabilities we may require in the future. As an
example, we may contract with or establish a teaming relationship with a U.S.
national laboratory such as Los Alamos National Labs, Lawrence Livermore
National Labs, or others that have a history and willingness to perform work
under well-established contracting channels such as Cooperative Research and
Development Agreements (CRADA) and Work for Others (WFO) agreements. Although we
believe this is adequate for our development purposes and preferable in the case
of nuclear material handling, we may choose to operate our own laboratory
facility in the future, subject to available capital.
 
 When a
technology is deemed market ready, the company will offer it to potential
customers for commercial licensing. As an example, after the successful
prototype construction and operation of our shielded nuclear material detector,
we will offer the sensor system to companies that have the appropriate
experience to integrate the sensor into a working environment to meet the
performance criteria as required by the end user. We do not intend to establish
technology or product manufacturing operations of our own, nor do we intend to
establish extensive marketing and distribution operations of our own except in
the case of our subsidiaries that are involved in the production of synthetic
fuels. Our business model as it relates to product technology development is
centered on the sale and/or licensing of our technologies through strategic
partnerships with companies that have established manufacturing, sales and
marketing infrastructures. By way of example, companies that could be potential
partners for our shielded nuclear material detection technology may be:
Lockheed-Martin, General Atomics, Raytheon and other such companies. Currently
we do not have any partnership agreements or material contracts with the
aforementioned companies.
  Our
primary role, when developing a product technology, is to add value by initially
developing and providing the enabling core intellectual property to our
customers and partners. Typically, after licensing, we will remain involved as a
consultant for the customer to ensure appropriate technology transfer to the
customer and to assist with any improvements or modification that may be needed
during the course of commercialization. This is a highly leveraged business
model that is believed by management to offer the greatest advantages in terms
of corporate flexibility, and reduced capital requirements compared to a
traditional research and development operation. However, management is
opportunistic and may consider adopting a production model if the right
conditions are met. We will pursue all avenues that will lead to the
commercialization of our technologies.
 
 Since our
business model is to establish partnerships during development and ultimately as
production and marketing partners for our technologies, we are constantly
looking for and evaluating potential strategic partners. We especially require
partnerships to take advantage of the business opportunities available through
government agencies such as the Homeland Security Advanced Projects Agency
(HSARPA), The Defense Advanced Research Projects Agency (DARPA) and others. A
partnering relationship with experienced companies that have a positive track
record of providing products or services to the government agencies that are our
potential customers in the related field will probably increase the likelihood
that we could secure money from the government to develop one of our
technologies for a specific government need.
 
 6
  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
licensing, sale, and other usage agreements associated with our
technologies.
 
 NUCLEAR
TECHNOLOGIES:
 
 GRAVIMETRIC
SHIELDED NUCLEAR MATERIAL/PORTABLE NUCLEAR WEAPON DETECTOR (Patented, United
States Patents 7,298,469, 7,511,831 and 7,511,832)
 
 Please
note: The company’s nuclear technologies are no longer under active development.
This section is being provided as a matter of historical reference and as a
historical reference to provide a background into the previous business
development efforts of the company.
 
 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.
 
 The
company owns three issued United States Patents covering technology for the
detection of shielded nuclear materials (United States Patents 7,298,469,
7,511,831 and 7,511,832)
 
 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 biannual. Due to the
suspension of active development related to this technology, the company has no
expectation of further revenue being received under the terms of the licensing
agreement with IPTH.
 
 7
  Over the
next 12 months, subject to available resources, our development plan for our
gravimetric nuclear material detector is as follows:
 
 -
Maintain the related intellectual property.
 
 - Secure
a strategic commercial development partner.
  - Seek a
potential buyer or master licensee for the technology.
 
 Nuclear
Micro-Batteries
 
 Please
note: The company’s nuclear technologies are no longer under active development.
This section is being provided as a matter of historical reference and as a
historical reference to provide a background into the previous business
development efforts of the company.
 
 This
program is aimed at developing embeddable micro-batteries that can supply
long-lasting power for computer chips, micro motors, remote sensors, implantable
medical devices, and other defense and aerospace applications. This technology
is also known as radioisotope micro power generation or RIMS (radioisotope micro
power sources). The science of nanotechnology is the design of Electrical and
mechanical systems smaller than the width of a human hair. The field of
nanotechnology includes making functional microscopic mechanical devices like
motors, gear systems, and pumps. This field also includes making electronic
circuits on an atomic scale. An opportunity exists to address the problem of
providing reliable power to these devices for a long period of time. As
electronic circuits and nanomachines grow ever smaller, a problem is created by
the fact that conventional batteries cannot shrink to the same size and still
hold enough power for the device to function for a reasonable period of time.
Our micro battery technology may solve this problem by drawing energy from an
embedded radioactive isotope due to the fact that radioisotope batteries are
known to have power densities up to 1,000 times greater than achievable with
conventional chemical battery technology. In order to focus our limited
resources more effectively, management has elected to suspend this program until
further notice. In November 2003, the Company entered into a licensing option
agreement for three issued U.S. patents for nuclear micro-battery technology
(Pat. Nos. 6,118,204; 6,238,812) with Jackie Brown. The company purchased a
one-year option to exclusively license the technology, with an additional six
month first right of refusal, in exchange for 100,000 shares of our common
stock. In January 2008, the company renewed its exclusive license option
agreement with Jackie Brown in exchange for 300,000 shares of common stock and
the payment of all patent maintenance fees for the patents subject to the
license agreement. When the company does choose to exercise its rights under the
licensing option agreement, we will execute a license royalty agreement for 7%
of the after tax profits on the sale or licensing of the technology to be paid
to Ms. Brown. In January 2009, the License option agreement with Ms. Brown
expired. The company is not currently in discussions with Ms. Brown to renew the
license option agreement.
 
 Our micro
battery technology relies on the application of Tritiated amorphous silicon as a
beta voltaic, thin-film, intrinsic energy conversion device. A beta voltaic
battery is a radioisotope based battery that converts energy from beta particles
released by a beta emitting source, such as tritium, into electrical power.
Common semiconductor designs of beta voltaic batteries use a semiconductor p-n
junction device that is either directly exposed to beta decay (Lucent
Technologies, Betabatt) or is illuminated by photons created when betas strike a
phosphor(Trace Photonics, Inc.). These common beta voltaic batteries suffer from
technical problems in that the directly irradiated cells suffer material
degradation of the p-n junction limiting the operating life to days while the
photo conversion systems are indirect and limited by efficiency to less than 1%.
Furthermore, another limitation of conventional beta voltaic batteries and P-N
junction devices is the self-absorption of beta energy in the source itself. In
order to reduce the self-absorption of beta energy we incorporate the isotope
into the lattice of a semiconductor.
 
 Tritiated
amorphous silicon is a novel thin film material where a suitable radioisotope is
bonded with silicon in the amorphous network or adjacent to it. Thin-film
contact potential Tritiated amorphous silicon cells have been built and
operation verified by an independent laboratory.
 
 We are
aware of several types of radioisotope batteries in development by organizations
such as Lucent, The University of Wisconsin, and Trace Photonics, Inc. and
Betabatt, Inc. While we believe that our technology is superior due to higher
resistance to degradation, our competitors have greater access to capital and
resources.
 
 8
  The
operation of our micro battery was proven by an independent lab. However, it is
still considered a development stage technology. We cannot guarantee that this
technology will receive any additional patents or that the technology can be
successfully commercialized.
 
 The
company does not anticipate engaging in further development activities regarding
nuclear micro-battery technology over the next 12 months.
  TRITIATED WATER REMEDIATION
TECHNOLOGY (TWR)
 
 Please
note: The company’s nuclear technologies are no longer under active development.
This section is being provided as a matter of historical reference and as a
historical reference to provide a background into the previous business
development efforts of the company.
 
 The
company was previously developing a technique for Tritiated water remediation by
way of isotope separation. This was to be a method to reduce the volume of
stored water contaminated with tritium, the radioactive isotope of
hydrogen.
 
 The TWR
development program was 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.
 
 In 2004
we filed two patent applications with the United States Patent and Trademark
Office to secure the rights to the tritium remediation technology. Additionally
in 2005 we filed 2 international patent applications based on our previously
filed U.S. Patent Applications.  Due to the company’s shift to the
production of synthetic fuels the pending patents associated with this
technology have been abandoned.
 
 The
company does not anticipate engaging in further development activities regarding
TWR technology over the next 12 months.
 
 Competition
 
 Competition
in the fields in which the company is endeavoring is complex. During 2008, we
did not generate any revenues and we are competing against companies that have
significantly greater financial, technical, political and human resources. We
are competing with national laboratories, universities, and established
corporations, such as Lockheed-Martin, General Atomics, and Raytheon among other
similar companies. There are well-established organizations within our business
segments that have both name recognition and histories of implemented
technologies. In nuclear-related businesses, the competitive field is relatively
small but intense and can raise significant barriers to entry. Competition
usually stems from name recognition, price, marketing resources, and expertise.
Although we have retained marketing and consulting expertise, established
competitors could enter the market with new, competing technologies at any time.
Our ability to complete will depend on the capabilities of the market-ready
technologies and how well we will be able to market these technologies.
Additional methods of competition include prior track record of competing for
government contracts and experience, greater access to scientific and technical
personnel, greater access to capital, greater access to technical facilities,
and name or brand establishment.
 
 Plan for the next 12
months
 
 Over the
next 12 months, we plan on raising working capital to fund development of these
technological areas through private placements of debt or equity, using our
common stock in lieu of cash, and applying for government grants, where
appropriate. The implementation of Company's business development phases
outlined above will be dependent on successful financing. Financing options may
include a combination of debt and equity financing. Equity financing may result
in a substantial equity dilution to existing shareholders.
 
 Significant
Assets
 
 Our
significant assets include: Our portfolio of intellectual property which
includes trade secrets and know-how in the areas of weapon detection via
specific density detection (United States Patents 7,298,469, 7,511,831 and
7,511,832), project development work and engineering associated with the CTL
projects in Kentucky and our fifteen-year land lease with Venture III
Associates, renewable for up to 90 years, for an approximate six-acre site in
New Jersey.
 
 9
  Progress
 
 Progress
in the development of our technologies have been slower than expected due to the
lack of personnel and lack of working capital. We anticipate increasing staffing
levels over the next 12 months. We estimate a working capital requirement of at
least $500,000 dollars over the next 12 months to maintain operations at a
minimum level.
 
 For the
year ended December 31, 2008, we have relied on the services of outside
consultants. We 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 4 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 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.
 
 We have
two executive officers. Patrick Herda is the President and Chief Executive
Officer. Kenneth Faith, Chief Financial and Principle accounting officer. David
Maland is the president of our subsidiary Fuel Frontiers, Inc. In addition to
the named officers, we retain the following independent contractors and
consultants: 1- technical and scientific, 5-business consultants, 1-lobbyist,
3-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.
 
  Item
1A.Risk
Factors.
  The
Company is subject to a high degree of risk. The following risks, if any one or
more occurs, could materially harm the business, financial condition or future
results of operations of the Company. If that occurs, the trading price of the
Company’s common stock could decline.
  Cautionary
Factors that may Affect Future Results
 
 We
provide the following cautionary discussion of risks, uncertainties and possible
inaccurate assumptions relevant to our business and our products. These are
factors that we think could cause our actual results to differ materially from
expected results. Other factors besides those listed here could adversely affect
us.
 
 Trends,
Risks and Uncertainties
 
 The
Company has sought to identify what it believes to be the most significant risks
to its business as discussed in "Risk Factors" above, but cannot predict whether
or not or to what extent any of such risks may be realized nor can there be any
assurances that the Company has identified all possible risks that might arise.
Investors should carefully consider all of such risk factors before making an
investment decision with respect to the Company's common stock.
 
 Limited
operating history; anticipated losses; uncertainly of future
results
 
 The
Company has only a limited operating history upon which an evaluation of the
Company and its prospects can be based. The Company’s prospects must be
evaluated with a view to the risks encountered by a company in an early stage of
development, particularly in light of the uncertainties relating to the business
model that the Company intends to market and the potential acceptance of the
Company’s business model. The Company will be incurring costs to develop,
introduce and enhance its products, to establish marketing relationships, to
acquire and develop products that will complement each other, and to build an
administrative organization. To the extent that such expenses are not
subsequently followed by commensurate revenues, the Company's business, results
of operations and financial condition will be materially adversely affected.
There can be no assurance that the Company will be able to generate sufficient
revenues from the sale of its products and services. The Company expects that
negative cash flow from operations may exist for the next 12 months as it
continues to develop and market its products and services. If cash generated by
operations is insufficient to satisfy the Company's liquidity requirements, the
Company may be required to sell additional equity or debt securities. The sale
of additional equity or convertible debt securities would result in additional
dilution to the Company's shareholders.
 
 10
  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.
 
 We have
not been profitable since our inception. Although we believe that we may
recognize revenues during the next twelve months based on our license agreement
with IPTH, and expressions of interest from third parties, there can be no
assurances as to when and whether we will be able to commercialize our products
and technologies and realize any revenues. Our technologies have never been
utilized on a large-scale commercial basis.
 
 We expect
that we will continue to generate losses until at least such time as we can
commercialize our technologies. No assurance can be given that we can complete
the development of any technology or that, if any technology is fully developed,
it can be manufactured and marketed on a commercially viable basis. Furthermore,
no assurance can be given that any technology will receive market acceptance. We
are subject to all risks inherent in the establishment of a developing or new
business. Certain nuclear technologies we are developing may be regulated now or
in the future by the United States Government and may subject to regulatory
requirements or export restrictions.
 
 11
  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 it may acquire
assets, and businesses, and, or technologies relating to or complementary to its
business model. Any acquisitions by the Company would involve risks commonly
encountered in acquisitions of companies. These risks would include, among other
things, the following: the Company could be exposed to unknown liabilities of
the acquired companies; the Company could incur acquisition costs and expenses
higher than it anticipated; fluctuations in the Company's quarterly and annual
operating results could occur due to the costs and expenses of acquiring and
integrating new businesses or technologies; the Company could experience
difficulties and expenses in assimilating the operations and personnel of the
acquired businesses; the Company's ongoing business could be disrupted and its
management's time and attention diverted; the Company could be unable to
integrate successfully.
 
 Liquidity
and Working Capital Risks; Need for Additional Capital to Finance Growth and
Capital Requirements
 
 We have
had limited working capital and we are relying upon notes (borrowed funds) to
operate. We may seek to raise capital from public or private equity or debt
sources to provide working capital to meet our general and administrative costs
until net revenues make the business self-sustaining. We cannot guarantee that
we will be able to raise any such capital on terms acceptable to us or at all.
Such financing may be upon terms that are dilutive or potentially dilutive to
our stockholders. If alternative sources of financing are required, but are
insufficient or unavailable, we will be required to modify our growth and
operating plans in accordance with the extent of available funding.
 
 New
Business
 
 We are a
new business and you should consider factors which could adversely affect our
ability to generate revenues, which include, but are not limited to, maintenance
of positive cash flow, which depends on our ability both to raise capital and to
obtain additional financing as required, as well as the level of sales
revenues.
 
 12
  Potential
fluctuations in quarterly operating results -
 
 Our
quarterly operating results may fluctuate significantly in the future as a
result of a variety of factors, most of which are outside our control,
including: the interest in our products; seasonal trends in purchasing, the
amount and timing of capital expenditures and other costs relating to the
development of our products; price competition or pricing changes in the
industry; technical difficulties or system downtime; general economic
conditions. Our quarterly results may also be significantly impacted by the
impact of the accounting treatment of acquisitions, financing transactions or
other matters. Particularly at our early stage of development, such accounting
treatment can have a material impact on the results for any quarter. Due to the
foregoing factors, among others, it is likely that our operating results will
fall below our expectations or those of investors in some future
quarter.
 
 Dependence
Upon Management
 
 Our
future performance and success are dependent upon the efforts and abilities of
our management team, directors and key contractors. If we lost the services key
members of management or other key employees before we could get a qualified
replacement, that loss could materially adversely affect our business. We do not
maintain key man life insurance on any of our Management.
 
 Lack of
Independent Directors
 
 We cannot
guarantee that our Board of Directors will have a majority of independent
directors in the future. In the absence of a majority of independent directors,
our executive officers, who are also principal stockholders and directors, could
establish policies and enter into transactions without independent review and
approval thereof. This could present the potential for a conflict of interest
between the Company and its stockholders generally and the controlling officers,
stockholders, or directors.
 
 Limitation
of Liability and Indemnification of Officers and Directors
 
 Our
officers and directors are required to exercise good faith and high integrity in
our management affairs. Our Articles of Incorporation provide, however, that our
officers and directors shall have no liability to our shareholders for losses
sustained or liabilities incurred which arise from any transaction in their
respective managerial capacities unless they violated their duty of loyalty, did
not act in good faith, engaged in intentional misconduct or knowingly violated
the law, approved an improper dividend or stock repurchase, or derived an
improper benefit from the transaction. Our Articles and By-Laws also provide for
the indemnification by us of the officers and directors against any losses or
liabilities they may incur as a result of the manner in which they operate our
business or conduct the internal affairs, provided that in connection with these
activities they act in good faith and in a manner that they reasonably believe
to be in, or not opposed to, the best interests of the Company, and their
conduct does not constitute gross negligence, misconduct or breach of fiduciary
obligations.
 
 Audit's
Opinion Expresses Doubt About The Company's Ability To Continue As a "Going
Concern".
 
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring losses
from operations. This raises substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 3. The 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.
 
 13
  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.
 
 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.
 
 14
  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 managements report is fairly stated or they are unable to express an
opinion on the effectiveness of our internal controls), we could lose investor
confidence in the accuracy and completeness of our financial reports, which
could have a material adverse effect on our stock price.
 
 Failure
to comply with the new rules may make it more difficult for us to obtain certain
types of insurance, including director and officer liability insurance.  We
may be forced to accept reduced policy limits and coverage and/or incur
substantially higher costs to obtain the same or similar coverage.  The
impact of these events could also make it more difficult for us to attract and
retain qualified persons to serve on our board of directors, on committees of
our board of directors, or as executive officers.
 
 The SEC
has proposed
yet another one-year delay in implementation of an independent auditor’s
attestation report on the internal controls for the smallest public companies.
Chairman Cox had promised this delay in his testimony before the House Committee
on Small Business in December 2007.
  Under the
proposal, non-accelerated filers would be required to provide auditor’s
attestation reports beginning with their annual reports filed for fiscal years
ending on or after December 15, 2009. The proposal does not affect the
requirement that management complete its own assessment of internal control over
financial reporting – which is now required for all filers, regardless of
size.
 
 15
   Item
1B.Unresolved
Staff Comments.  Not
Applicable to a Smaller Reporting Company
   Item
2.Description
of Property.
  Our
principal business address is 1025 Connecticut Ave NW, Suite 1000 Washington, DC
20036 and our principal mailing address is 5505 Connecticut Ave NW, #191,
Washington, DC 20015.
 
 In
December 2008, we entered into a twelve-month lease for office space. The square
footage of the facility is approximately 1,200 Sq ft. The annual cost is
approximately $40,000. We anticipate requiring additional office space over the
next 12 months.
 
  Item
3.Legal
Proceedings.
  The
Company is not a party to any pending legal proceeding.
 
  Item
4.Submission
of Matters to a Vote of Security Holders.
 
 No matter was submitted to a vote of
the security holders, through the solicitation of proxies or otherwise, during
the fourth quarter of the fiscal year covered by this report.
 
 PART
II
   Item
5.Market for
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
  Market
For Common Equity And Related Stockholder Matters
 
 Our
common stock is traded on the OTC Electronic Bulletin Board.  The
following table  sets  forth  the high and low
bid  prices  of our  common  stock for
each quarter for the years 2007 and 2008, including the first quarter of
2009.  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
                  HighMarch
      31, 2009
                  0.016
                  0.025December
      31, 2008
                  0.0135
                  0.01September
      30, 2008
                  0.085
                  0.10June
      30, 2008
                  0.155
                  0.18March
      31, 2008
                  0.33
                  0.29December
      31, 2007
                  0.54
                  0.62September
      30, 2007
                  0.40
                  0.43June
      30, 2007
                  0.53
                  0.60March
      31, 2007
                  0.68
                  0.73




16


Holders.
 
 Our company has approximately 530
shareholders of its common stock as of December 31, 2008 holding 97,490,981
common shares.
 
 (b)           Dividends.
 
 There are no restrictions imposed on
the Company which limit its ability to declare or pay dividends on its common
stock, except for corporate state law limitations. No cash dividends have been
declared or paid to date and none are expected to be paid in the foreseeable
future.
 
 (c)           Recent
Sales of Unregistered Securities
 
 During the fourth quarter of 2008, the
Company offered and sold the following securities pursuant to a securities
transaction exemption from the registration requirements of the Securities Act
of 1933, as amended.
 
 [None.]
 
 The
securities issued above were issued in a private transaction pursuant to Section
4(2) of the Securities Act of 1933, as amended, (the “Securities
Act”).  These shares are considered restricted securities and may not
be publicly resold unless registered for resale with appropriate governmental
agencies or unless exempt from any applicable registration
requirements.
 
 (d)           Securities
Authorized for Issuance under Equity Compensation Plans
 
 The
following table summarizes our equity compensation plan information as of
December 31, 2008.  Information is included for equity compensation
plans not approved by our security holders.
 
 Table
1.
 
 Equity
Compensation Plan Information
 
 Plan
      Category
                Number
      of Securitiesto be issuedupon exercise ofoutstanding
      options,warrants and rights
                  
                  (a)
                Weighted-average
                  Exercise
      price ofoutstanding options,warrants, and rights
                  
                  (b)
                Number
      of Securitiesremaining available forfuture issuanceunder
      equitycompensation plans(excluding securitiesreflected in
      column (a)
                  
                  (c)Equity
      Compensation Plans approved by security holders
                None
                None
                NoneEquity
      Compensation Plans not approved by security holders
                5,500,000
      (1)
                $
      0.62
                -0-5,000,000(2)
                $0.625
                -0-5,000,000(3)
                $0.52
                513,447Total
                15,500,000
                
                513,447
 
 (1) On
August, 17, 2005, the company adopted a Stock Grant Plan.  The plan
reserved 5,500,000 shares.  The Plan was registered on a Form S-8
registration statement filed on November 16, 2004.  The Plan is
administered by our Board of Directors.   Directors, officers,
employees, consultants, attorneys, and others who provide services to our
Company are eligible participants.  Participants are eligible to be
granted warrants, options, common stock as compensation. During 2007, we issued
1,367,307 shares from this Plan.
  17
 (2) On
March 7, 2007, the company adopted a Stock Grant Plan.  The plan
reserved 5,000,000 shares.  The Plan was registered on Form S-8
Registration Statement filed on March 9, 2007. Directors, officers, employees,
consultants, attorneys, and others who provide services to our Company are
eligible participants.  Participants are eligible to be granted
warrants, options, common stock as compensation. During 2007, we issued
5,000,000 shares from this Plan.
 
 (3) On
November 28, 2007, the company adopted a Stock Grant Plan.  The plan
reserved 5,000,000 shares.  The Plan was registered on Form S-8
Registration Statement filed on December 6, 2007. Directors, officers,
employees, consultants, attorneys, and others who provide services to our
Company are eligible participants.  Participants are eligible to be
granted warrants, options, common stock as compensation. During 2007, we issued
470,957 shares from this Plan leaving a balance of 4,529,043 in the
Plan.  During 2008, we issued 4,019,886 shares from this Plan leaving
a balance of 513,447 at December 31, 2008
 
  Item
6.Selected
Financial Data.  Not
Applicable to Smaller Reporting Companies
  
 Item
7.Management’s Discussion and
Analysis or Plan of Operation.
  When used
in this Form 10-K and in our future filings with the Securities and Exchange
Commission, the words or phrases will likely result, management expects, or we
expect, will continue, is anticipated, estimated or similar expressions are
intended to identify forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Readers are cautioned not to
place undue reliance on any such forward-looking statements, each of which speak
only as of the date made. These statements are subject to risks and
uncertainties, some of which are described below. Actual results may differ
materially from historical earnings and those presently anticipated or
projected. We have no obligation to publicly release the result of any revisions
that may be made to any forward-looking statements to reflect anticipated events
or circumstances occurring after the date of such statements.
 
 Business
Overview
 
 Nuclear
Solutions, Inc. and its wholly owned subsidiary, Fuel Frontiers, Inc. is engaged
in the research, development, and commercialization of innovative technologies
and processes, which are generally early-stage, theoretical or commercially
unproven. We operate a highly technical business and our primary mission is to
develop facilities to produce ultra-clean synthetic diesel from coal and other
materials using a plasma-based gasification system and a conventional synthesis
gas-to-fuel reforming system based upon Fisher-Tropsch technology.
 
 In 2008,
The Board of Directors elected to focus the company exclusively on the
production of synthetic fuels through the FFI subsidiary. Prior to that, the
company was developing nuclear technologies in the areas of shielded nuclear
material detection and nuclear micro-batteries in addition to the production of
synthetic fuels. Due to the difficulties encountered in raising capital in a
declining economic climate coupled with the limited resources of the company,
management made the decision to place all nuclear technology development
programs into a dormant state.  The company will continue to maintain
the intellectual property associated with the shielded nuclear detection
technology program and will seek a buyer or a master licensee for the
patents.  The company is discontinuing all further business
development associated with nuclear micro-battery technology and other nuclear
legacy technologies.
 
 Plan
of Operation
 
 We will
need to raise additional money to fund our operations. Management estimates a
minimum capital requirement of $500,000 to maintain operations at a minimum
level. 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.
 
 18
  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 project or technology or that, if any
technology or project is fully developed, it can be manufactured and marketed on
a commercially viable basis. Furthermore, no assurance can be given that any
technology or product 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 and synthetic fuel projects we are
developing may be regulated now or in the future by the United States Government
and may subject to regulatory requirements or export restrictions. We are also
subject to additional regulations concerning nuclear technologies. Some of the
technologies we develop may be subject to the Atomic Energy Act of
1954.
 
 The
implementation of Company's business development phases outlined above will be
dependent on successful financing. Financing options may include a combination
of debt and equity financing. Equity financing may result in a substantial
equity dilution to existing shareholders.
 
 Comparison of Results of
Operations for the year ended December 31, 2008 to the year ended December 31,
2007
 
 Results
of Operations
 
 REVENUES:  The
Company reported  revenues of $0 from our existing technology license
agreement, for the year ended December 31, 2008 as compared with revenues from
continuing operations of $100,000 for the year  ended December 31,
2007. The decrease in revenues is attributable to Multiple factors which include
our policy of recognizing revenues on a cash basis and our suspension of nuclear
technology development.
 
 Business
Concentration
 
 For the
year ended December 31, 2007, and the year ended December 31, 2008, the balance
of all accounts receivables was from one customer.
 
 TOTAL
COSTS AND EXPENSES:  Total costs and expenses from continuing
operations decreased  from  $4,895,729 for  the
year ended  December  31,  2007 to $3,622,270 for
the year ended December 31, 2008. The principal reason for this decrease was due
to a decrease in consulting fees, executive compensation, legal, and
professional fees resulting from the concentration of the company’s efforts on
its synthetic fuel projects and suspension of nuclear technology
projects.
 
 OPERATING
EXPENSES: Operating expenses from continuing operations decreased from
$4,895,729 for the year ended  December 31,  2007 to
$3,622,270 for the year ended December  31,
2008.  This  decrease was primarily due to decreased
business development activities, as stated above.
Depreciation  expense  decreased for the year 2008 versus
the year 2007,  decreasing from $6,301 for the year ended December 31,
2007 to $3,687, for the year ended December 31, 2008. This decrease is due to
the write-down of office equipment that are no longer in use.
 
 INTEREST
EXPENSE: Interest expense decreased from $634,082 for the year ended December
31, 2007 to $457,891 for the year ended December 31, 2008. This decrease is due
primarily to a reduction in debt incurred to finance company
operations.
 
 SALES,  GENERAL
AND  ADMINISTRATIVE:  Sales,  General &
Administrative
 
 Expenses
increased by $164,174 during the year ended December 31, 2008 to a total amount
of $329,470 as compared to $165,296 for the year ended December 31,2007. The
increase was due to increased travel and general business expenses related to
the development of the company’s synthetic fuel projects.
 
 NET LOSS:
The Company incurred a net loss of ($4,048,086) for the year ended December 31,
2008, compared with a net loss of ($5,509,400) for the year ended December 31,
2007, which reflects a year-to-year decrease in the amount of loss for the
period of $1,461,314.  The principal reason for this decrease was due
to a decrease in consulting fees, executive compensation, legal and professional
fees and general business expenses resulting from the concentration of the
company’s efforts on its synthetic fuel projects and suspension of nuclear
technology projects.
 
 19
  LIQUIDITY  AND
CAPITAL  RESOURCES:
 
 As of
December 31, 2008, we had a working capital deficit of $5,557,940 which compares
to a working capital deficit of $ 5,172,133 as of December 31, 2007. As a result
of our operating losses for the year ended December 31, 2007, we generated a
cash flow deficit of $284,702 from operating activities. Cash flows used in
investing activities was $0 during the period. Cash flows provided by financing
activities were $268,000 on proceeds from short-term notes payable.
 
 Additional
financing will be required in order to meet our current and projected cash flow
deficits from operations and development. We are seeking financing in the form
of equity or debt in order to provide the necessary working capital. We are in
discussions with potential sources of funding, however we currently have no
fully executed 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, purchase land and continue development of our synthetic fuel projects
in Kentucky.  By adjusting our operations and development to the level
of capitalization, we believe that a working capital level of $500,000 minimum
will be sufficient to sustain the basic company operations over the next 12
months.
 
 Currently
management does not have sufficient capital resources to meet projected cash
flow deficits through the next twelve months. If we are not successful in
generating sufficient liquidity from operations or in raising sufficient capital
resources, on terms acceptable to us, this could have a material adverse effect
on our business, results of operations, liquidity and financial
condition.
 
 Auditors'
opinion expresses doubt about the Company's ability to continue as a going
concern. The independent auditors report on the company's December 31, 2008
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.
 
 
 Item
7A.Quantitative
and Qualitative Disclosures About Market Risk
 
 Cash and
Cash Equivalents
 
 We have
historically invested our cash and cash equivalents in short-term, fixed rate,
highly rated and highly liquid instruments which are reinvested when they mature
throughout the year.  Although our existing investments are not
considered at risk with respect to changes in interest rates or markets for
these instruments, our rate of return on short-term investments could be
affected at the time of reinvestment as a result of intervening events. As of
December 31, 2008, we had cash and cash equivalents aggregated
$176,279
 
 The
Company does not issue or invest in financial instruments or their derivatives
for trading or speculative purposes.  The operations of the Company
are conducted primarily in the United States, and, are not subject to material
foreign currency exchange risk. Although the Company has outstanding debt and
related interest expense, management believes that the market risk of its
interest rate exposure is currently not material.
 
 Debt
 
 The
interest rate on our outstanding debt obligations are fixed and are not subject
to market fluctuations.  Some of our convertible debt may have its
interest costs increased if the debt is converted into common stock because the
conversion price is a function of the market price of our common
stock.
 
 20
  Item
8.Financial
Statements and Supplementary Data.
 
 Index to
Financial Statements
  Page
      No.Report
      of Independent Registered Public Accounting Firm
                                  
                                  F-2Consolidated
      Balance Sheets at December 31, 2008 and 2007
                                  
                                  F-3Consolidated
      Statements of Losses for the years ended December 31, 2008, 2007 and
      2006
                                  
                                  F-4Consolidated
      Statements of Deficiency in Stockholders' Equity for the years ended
      December 31, 2008, 2007 and 2006
                                  
                                  F-5Consolidated
      Statements of Cash Flows for the years ended December 31, 2008, 2007 and
      2006
                                  
                                  F-6Notes
      to Consolidated Financial Statements
                                  
                                  F-7
      to
F-21
  F-1
  RBSM
LLP
 Certified
Public Accountants
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors
 Nuclear
Solutions, Inc.
 Washington,
D.C.
 
 We have
audited the accompanying consolidated balance sheets of Nuclear Solutions, Inc.
and subsidiary (the "Company"), as of December 31, 2008 and 2007 and the related
consolidated statements of losses, deficiency in stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2008. 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. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.An
audit 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, 2008 and 2007, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2008,
inconformity with accounting principles generally accepted in the United States
of America.
 
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring losses
from operations. This raises substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
  /s/ RBSM
      LLP
 New York,
NY
 April 14,
2009
  F-2
 NUCLEAR
SOLUTIONS, INC.
 AND
SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 December
      31,
                                                                                  
                                                                                  
                                                                                  December
      31,2008
                                                                                  
                                                                                  
                                                                                  2007ASSETSCurrent
      assets:Cash
                                                                                  
                                                                                  $
                                                                                  176,279
                                                                                  
                                                                                  
                                                                                  $
                                                                                  192,981Prepaid
      Expenses
                                                                                  
                                                                                  
                                                                                  12,900
                                                                                  
                                                                                  
                                                                                  
                                                                                  112,900Total
      current assets
                                                                                  
                                                                                  
                                                                                  189,179
                                                                                  
                                                                                  
                                                                                  
                                                                                  305,881Property
      and equipment, net of accumulated depreciationof  $3,492
      and $28,019 , respectively
                                                                                  
                                                                                  
                                                                                  3,938
                                                                                  
                                                                                  
                                                                                  
                                                                                  7,625Other
      assets
                                                                                  
                                                                                  
                                                                                  84,100
                                                                                  
                                                                                  
                                                                                  
                                                                                  1,800Total
      assets
                                                                                  
                                                                                  $
                                                                                  277,217
                                                                                  
                                                                                  
                                                                                  $
                                                                                  315,306LIABILITIES
      AND DEFICIENCY IN STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued expenses
                                                                                  
                                                                                  $
                                                                                  4,687,644
                                                                                  
                                                                                  
                                                                                  $
                                                                                  3,938,962Accrued
      executive compensation
                                                                                  
                                                                                  
                                                                                  846,583
                                                                                  
                                                                                  
                                                                                  
                                                                                  995,112Advance
      payments received
                                                                                  
                                                                                  
                                                                                  154,114Convertible
      notes payable - related parties, net of discount of $1,666and
      $5,115, as of December 31,2008 and December 31, 2007
      respectively
                                                                                  
                                                                                  
                                                                                  19,778
                                                                                  
                                                                                  
                                                                                  
                                                                                  45,885Convertible
      notes payable - other, net of discount of $0 andand
      $233,168, as of December 31, 2008 and December 21, 2007
      respectively
                                                                                  
                                                                                  
                                                                                  39,000
                                                                                  
                                                                                  
                                                                                  
                                                                                  498,055Total
      current liabilities
                                                                                  
                                                                                  
                                                                                  5,747,119
                                                                                  
                                                                                  
                                                                                  
                                                                                  5,478,014Derivative
      liability (Note 4)
                                                                                  
                                                                                  
                                                                                  1,660
                                                                                  
                                                                                  
                                                                                  
                                                                                  13,311Total
      liabilities
                                                                                  
                                                                                  
                                                                                  5,748,779
                                                                                  
                                                                                  
                                                                                  
                                                                                  5,491,325Commitments
      and contingencies (Note 10)Deficiency
      in stockholders' equity
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -Preferred
      stock, $0.0001 par value; 10,000,000 sharesauthorized,
      no shares issued and outstanding
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  -Common
      stock, $0.0001 par value; 100,000,000shares
      authorized,  97,490,981 and 73,734,095 issued
andoutstanding,
      as of December 31,2008 and December 31, 2007 respectively
                                                                                  
                                                                                  
                                                                                  9,749
                                                                                  
                                                                                  
                                                                                  
                                                                                  7,374Additional
      paid-in capital
                                                                                  
                                                                                  
                                                                                  19,931,944
                                                                                  
                                                                                  
                                                                                  
                                                                                  16,802,581Deferred
      equity based expense
                                                                                  
                                                                                  
                                                                                  (437,698
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (1,058,503
                                                                                  )Accumulated
      deficit
                                                                                  
                                                                                  
                                                                                  (24,975,557
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (20,927,471
                                                                                  )Total
      deficiency in stockholders' equity
                                                                                  
                                                                                  
                                                                                  (5,471,562
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (5,176,019
                                                                                  )Total
      liabilities and deficiency in stockholders' equity
                                                                                  
                                                                                  $
                                                                                  277,217
                                                                                  
                                                                                  
                                                                                  $
                                                                                  315,306
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-3
 NUCLEAR
SOLUTIONS, INC.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF LOSSES
 For
      the Years Ended December 31,2008
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              2007
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              2006Revenue
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              -
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              100,000
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              223,000Operating expensesExecutive
      compensation
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              581,042
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              892,000
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              110,000Consulting
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              2,548,508
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              2,856,713
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              2,635,488Legal
      and professional fees
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              630,449
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              975,419
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              1,085,157General
      and administrative expenses
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              329,470
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              165,296
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              137,477Depreciation
      and amortization
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              3,687
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              6,301
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              5,812Payments
      received pursuant to collaborative arrangement
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (470,886
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -Total operating expenses
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              3,622,270
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              4,895,729
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              3,973,934Loss
      from operations
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (3,622,270
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (4,795,729
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (3,750,934
                                                                                                                                                                                                                                                                                                                                                                                              )Other
      Income (expense)Interest
      expense
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (457,891
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (634,082
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (134,144
                                                                                                                                                                                                                                                                                                                                                                                              )Interest
      Income
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              478
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -Change
      in fair value of derivative liability
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              31,597
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (79,589
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -Loss
      before provision for income taxes
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (4,048,086
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (5,509,400
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              (3,885,078
                                                                                                                                                                                                                                                                                                                                                                                              )Provision
      for income taxes
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              -Net
      loss
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (4,048,086
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (5,509,400
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (3,885,078
                                                                                                                                                                                                                                                                                                                                                                                              )Basic
      and diluted loss per share
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (0.04
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (0.09
                                                                                                                                                                                                                                                                                                                                                                                              )
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              $
                                                                                                                                                                                                                                                                                                                                                                                              (0.08
                                                                                                                                                                                                                                                                                                                                                                                              )Weighted
      average number of common sharesoutstanding,
      basic and diluted
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              90,055,670
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              61,999,349
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                              49,474,808
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-4
 NUCLEAR
SOLUTIONS, INC
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
 FOR
THE THREE YEARS ENDED DECEMBER 31, 2008
 TotalDeficiency
      inCommon
      Stock
                                
                                
                                Additional
                                
                                
                                Deferred
      Equity
                                
                                
                                Accumulated
                                
                                
                                Stockholders'Shares
                                
                                
                                Amount
                                
                                
                                Paid
      - In Capital
                                
                                
                                Based
      Expense
                                
                                
                                Deficit
                                
                                
                                EquityBalance,
      January 1, 2006
                                
                                
                                43,965,863
                                
                                
                                $
                                4,397
                                
                                
                                $
                                8,228,656
                                
                                
                                $
                                (363,890
                                )
                                
                                $
                                (11,532,993
                                )
                                
                                $
                                (3,663,830
                                )Shares
      issued for services
                                
                                
                                1,446,099
                                
                                
                                
                                145
                                
                                
                                
                                1,104,570
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,104,715Shares
      issued for accrued expenses
                                
                                
                                2,192,779
                                
                                
                                
                                219
                                
                                
                                
                                1,077,226
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,077,445Shares
      issued for payment of debt
                                
                                
                                4,989,545
                                
                                
                                
                                499
                                
                                
                                
                                460,721
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                461,220Stock
      issued upon exercise of options
                                
                                
                                250,000
                                
                                
                                
                                25
                                
                                
                                
                                24,975
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                25,000Stock
      issued upon cashless exercise of  warants
                                
                                
                                821,358
                                
                                
                                
                                82
                                
                                
                                
                                (82
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Beneficial
      conversion feature
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                31,000
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                31,000Deferred
      compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,562,525
                                )
                                
                                
                                -
                                
                                
                                
                                (1,562,525
                                )Amortization
      of deferred compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,320,461
                                
                                
                                
                                -
                                
                                
                                
                                1,320,461Net
      loss
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (3,885,078
                                )
                                
                                
                                (3,885,078
                                )Balance
      December 31, 2006
                                
                                
                                53,665,644
                                
                                
                                $
                                5,367
                                
                                
                                $
                                10,927,066
                                
                                
                                $
                                (605,954
                                )
                                
                                $
                                (15,418,071
                                )
                                
                                $
                                (5,091,592
                                )Shares
      issued for services
                                
                                
                                5,813,762
                                
                                
                                
                                581
                                
                                
                                
                                2,611,838
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                2,612,419Shares
      issued for accrued expenses
                                
                                
                                2,087,688
                                
                                
                                
                                209
                                
                                
                                
                                1,382,097
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,382,306Shares
      issued for payment of debt and Interest
                                
                                
                                12,167,001
                                
                                
                                
                                1,217
                                
                                
                                
                                1,037,822
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,039,039Beneficial
      conversion feature
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                736,371
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                736,371Reclassification
      of derivative liability
                                
                                
                                
                                
                                
                                
                                
                                107,387
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                107,387Deferred
      compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (2,589,255
                                )
                                
                                
                                -
                                
                                
                                
                                (2,589,255
                                )Amortization
      of deferred compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                2,136,706
                                
                                
                                
                                -
                                
                                
                                
                                2,136,706Net
      loss
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (5,509,400
                                )
                                
                                
                                (5,509,400
                                )Balance
      December 31, 2007
                                
                                
                                73,734,095
                                
                                
                                $
                                7,374
                                
                                
                                $
                                16,802,581
                                
                                
                                $
                                (1,058,503
                                )
                                
                                $
                                (20,927,471
                                )
                                
                                $
                                (5,176,019
                                )Shares
      issued for services
                                
                                
                                5,320,440
                                
                                
                                
                                531
                                
                                
                                
                                863,358
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                863,889Shares
      issued for accrued expenses
                                
                                
                                1,299,446
                                
                                
                                
                                130
                                
                                
                                
                                535,870
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                536,000Shares
      issued for payment of debt and Interest
                                
                                
                                16,271,524
                                
                                
                                
                                1,627
                                
                                
                                
                                1,467,168
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,468,795Shares
      issued for cash
                                
                                
                                865,476
                                
                                
                                
                                87
                                
                                
                                
                                74,913
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                75,000Beneficial
      conversion feature
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                185,000
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                185,000Reclassify
      derivative liability
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                3,054
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                3,054Cash
      received in excess of stock issued
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Deferred
      compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,319,378
                                )
                                
                                
                                -
                                
                                
                                
                                (1,319,378
                                )Amortization
      of deferred compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,940,183
                                
                                
                                
                                -
                                
                                
                                
                                1,940,183Net
      loss
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (4,048,086
                                )
                                
                                
                                (4,048,086
                                )Balance
      December 31, 2008
                                
                                
                                97,490,981
                                
                                
                                $
                                9,749
                                
                                
                                $
                                19,931,944
                                
                                
                                $
                                (437,698
                                )
                                
                                $
                                (24,975,557
                                )
                                
                                $
                                (5,471,562
                                )
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-5
  NUCLEAR
SOLUTIONS, INC.
 AND
SUBSIDIARIES
 For
      the Years Ended December 31,2008
                                      
                                      
                                      2007
                                      
                                      
                                      2006CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                      
                                      $
                                      (4,048,086
                                      )
                                      
                                      $
                                      (5,509,400
                                      )
                                      
                                      $
                                      (3,885,078
                                      )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Depreciation
      and amortization
                                      
                                      
                                      3,687
                                      
                                      
                                      
                                      6,302
                                      
                                      
                                      
                                      5,812Amortization
      of debt discount - beneficial conversion feature ofconvertible
      note and warrants
                                      
                                      
                                      444,617
                                      
                                      
                                      
                                      539,197
                                      
                                      
                                      
                                      31,000Change
      in fair value of derivative liability
                                      
                                      
                                      (31,597
                                      )
                                      
                                      
                                      79,589
                                      
                                      
                                      
                                      -Stock
      and warrants issued for services
                                      
                                      
                                      2,823,412
                                      
                                      
                                      
                                      4,749,125
                                      
                                      
                                      
                                      2,425,176Changes
      in operating assets and liabilities:Accounts
      receivable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      60,000Prepaid
      Expenses
                                      
                                      
                                      100,000
                                      
                                      
                                      
                                      (103,700
                                      )
                                      
                                      
                                      (9,200
                                      )Other
      Assets
                                      
                                      
                                      (82,300
                                      )
                                      
                                      
                                      7,500
                                      
                                      
                                      
                                      (7,500
                                      )Accounts
      payable and accrued expenses
                                      
                                      
                                      (23,667
                                      )
                                      
                                      
                                      (346,283
                                      )
                                      
                                      
                                      1,349,368Accrued
      executive compensation
                                      
                                      
                                      375,118
                                      
                                      
                                      
                                      (38,280
                                      )
                                      
                                      
                                      (19,393
                                      )Advance
      payments received
                                      
                                      
                                      154,114
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      cash used in operating activities
                                      
                                      
                                      (284,702
                                      )
                                      
                                      
                                      (615,950
                                      )
                                      
                                      
                                      (49,815
                                      )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchases
      of property and equipment
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (7,430
                                      )Net
      cash used in investing activities
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (7,430
                                      )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of debt
                                      
                                      
                                      208,000
                                      
                                      
                                      
                                      777,480
                                      
                                      
                                      
                                      41,000Proceeds
      fro sale of common stock
                                      
                                      
                                      75,000
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      25,000Payments
      on Loans
                                      
                                      
                                      (15,000
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      cash provided by financing activities
                                      
                                      
                                      268,000
                                      
                                      
                                      
                                      777,480
                                      
                                      
                                      
                                      66,000Net  increase
      (decrease) in cash
                                      
                                      
                                      (16,702
                                      )
                                      
                                      
                                      161,530
                                      
                                      
                                      
                                      8,755Cash,
      beginning of period
                                      
                                      
                                      192,981
                                      
                                      
                                      
                                      31,451
                                      
                                      
                                      
                                      22,696Cash,
      end of period
                                      
                                      $
                                      176,279
                                      
                                      
                                      $
                                      192,981
                                      
                                      
                                      $
                                      31,451Supplemental
      disclosures:Cash
      paid for:Interest
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Income
      taxes
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Non-cash
      investing and financial activities:Amortization
      of debt discount - beneficial conversion feature ofconvertible
      note and warrants
                                      
                                      $
                                      444,617
                                      
                                      
                                      $
                                      522,866
                                      
                                      
                                      $
                                      31,000Payment
      of debt and interest with common stock
                                      
                                      
                                      925,808
                                      
                                      
                                      
                                      1,039,039
                                      
                                      
                                      
                                      461,220Beneficial
      conversion discount
                                      
                                      
                                      208,000
                                      
                                      
                                      
                                      777,480
                                      
                                      
                                      
                                      31,000Payment
      of accrued expenses with common stock
                                      
                                      
                                      1,078,987
                                      
                                      
                                      
                                      1,382,306
                                      
                                      
                                      
                                      1,077,445
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-6
  NUCLEAR
SOLUTIONS, INC.
 AND
SUBSIDIARIES
 
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 
 DECEMBER
31, 2008
 
 
 NOTE
1 - ORGANIZATION AND NATURE OF OPERATIONS
 
 Nuclear
Solutions, Inc. ("the "Company") was organized February 27, 1997 under the laws
of the State of Nevada, as Stock Watch Man, Inc. On September 12, 2001, the
Company amended its articles of incorporation to change its name to Nuclear
Solutions, Inc.
 
 On
September 2, 2005 the Company formed a wholly owned subsidiary, Fuel Frontiers
Inc.(“FFI”), formally, Future Fuels, Inc., which had minimal operations through
June 30, 2008.
 
 On July
31, 2006 the company formed a wholly owned subsidiary, Liquidyne Fuels, which
has had no activity through December 31, 2008.
 
 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 statements.
 
 Business
 
 Nuclear
Solutions, Inc. is engaged in the research, development, and commercialization
of innovative product technologies, which are generally early-stage, theoretical
or commercially unproven. We operate a highly technical business and our primary
mission is to develop advanced product technologies to address emerging market
opportunities in the fields of homeland security, nanotechnology, and nuclear
remediation. Our wholly owned subsidiary Fuel Frontiers, Inc. concentrates on
developing fuel production facilities to produce ultra-clean synthetic diesel
from feedstocks such as coal.
  
 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, 2008 or 2007.
 
 Revenue
Recognition
 
 Revenues
are recognized in the period that services are provided. For revenue from
product sales, the Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, “Revenue Recognition” ("SAB104"), which superseded
Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements”
("SAB101"). SAB 101 requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence of an arrangement exists; (2)
delivery has occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or is subject to refund until such time that the Company and the
customer jointly determine that the product has been delivered or no refund will
be required. Payments received in advance are deferred.
 
 F-7
  SAB 104
incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
“Multiple-Deliverable Revenue Arrangements”. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.
 
 Licensing
fee income generally is being recognized ratably over the term of the license.
The Company's management has determined that the collectibility and length of
time to collect the remaining contracted price due from its licensee can not be
reasonably assured. Accordingly, revenues will be recognized as
collected.
 
 Collaborative
Arrangement
 
 The
Company, through its subsidiary FFI, has entered into a collaborative
arrangement with Kentucky Fuel Associates, Inc. 
(“KFA”) for the development of coal-based gas-to-liquid (CTL) fuel production
facilities in the State of Kentucky. KFA has agreed to provide an initial
funding of $2,000,000 per site to be applied by FFI towards any and all costs
and expenses incurred in the ordinary course of business for the development,
construction and arranging of financing to closure including without limitation
the following costs: engineering, procurement, administrative, development
management, financing, legal, operations and maintenance costs for each said
fuel production facility. In consideration for KFA’s initial minimum funding
contribution, KFA will receive 7% of the annual net pre-tax income of each
jointly developed CTL diesel fuel facility and 2.5% equity interest in the first
CTL diesel fuel facility developed by FFI and KFA. Additionally, KFA will have
the exclusive right to develop CTL diesel fuel facilities with FFI in the state
of Kentucky and a conditional first right of refusal to develop CTL diesel fuel
facilities in the remainder of the United States.
 
 We are
accounting for this agreement pursuant to EITF 07-01, “Accounting for
Collaborative Arrangements”. We have expended $470,886 towards the development
of the initial CTL facility and KFA has provided $625,000 in funding. We have
reported $470,886 of the payment as payments received pursuant to collaborative
agreements and the balance of $154,114 as a current liability as advance
payments received.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
 
 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. When assets are retired or otherwise disposed of,
the cost and related accumulated depreciation are removed and any resulting gain
or loss is recognized.
 
 F-8
  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, 2008,
2007 or 2006.
 
 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, 2008, 2007 or 2006.
 
 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, 2008 and 2007 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, 2008, 2007 and 2006, the Company had 1,004,518, 9,324,983 and
10,806,455 potentially dilutive securities, respectively.
 
 Income
Taxes
 
 The
Company accounts for income taxes under SFAS No. 109, "Accounting for Income
Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
 
 In July
2006, the FASB issued FIN 48, "Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the
recognition threshold and measurement of a tax position taken on a tax return.
FIN 48 is effective for fiscal years beginning after December 15, 2006. FIN 48
also requires expanded disclosure with respect to the uncertainty in income
taxes.
 
 Stock
Based Compensation
 
 The
Company uses the fair value method for equity instruments granted to
non-employees and uses the Black-Scholes model for measuring the fair value. The
stock based fair value compensation is determined as of the date of the grant or
the date at which the performance of the services is completed (measurement
date) and is recognized over the periods in which the related services are
rendered.
 
 F-9
  Liquidity
 
 As shown
in the accompanying financial statements, the Company has incurred net losses of
$4,048,086, $5,509,400 and $3,885,078 during the years ended December 31, 2008,
2007 and 2006, respectively. The Company's current liabilities exceeded its
current assets by $5,557,940 as of December 31, 2008. Consequently, its
operations are subject to all risks inherent in the establishment of a new
business enterprise.
 
 Fair
Value Accounting
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Statement No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the
FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No.
157” (“FSP FAS 157-2”). FSP FAS 157-2 delayed the effective date of FAS 157 for
nonfinancial assets and nonfinancial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). The provisions of FSP FAS 157-2 are effective for the
Company’s fiscal year beginning January 1, 2009.
 
 FAS 157
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of the fair value hierarchy
under FAS 157 are described below:
  Level
      1
                        Unadjusted
      quoted prices in active markets that are accessible at the measurement
      date for identical, unrestricted assets or
  liabilities;
 
 Level
      2
                        Quoted
      prices in markets that are not active, or inputs that are observable,
      either directly or indirectly, for substantially the full term of the
      asset or liability;
 
 Level
      3
                        Prices
      or valuation techniques that require inputs that are both significant to
      the fair value measurement and unobservable (supported by little or no
      market activity).
 
 The
following table sets forth the Company’s financial liabilities measured at fair
value by level within the fair value hierarchy. As required by FAS 157, assets
and liabilities are classified in their entirety based on the lowest level of
input that is significant to the fair value measurement. The Company designates
cash equivalents as Level 1. As of December 31, 2008 and 2007, the Company did
not have any cash equivalents, therefore there were no assets measured at fair
value.
 
 Fair
      Value at December 31, 2008Total
                          
                          
                          Level
      1
                          
                          
                          Level
      2
                          
                          
                          Level
      3Liabilities:Conversion
      option liability
                          
                          $
                          1,660
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          1,660
 
 The
Company’s conversion option liability is valued using pricing models and the
Company generally uses similar models to value similar instruments. Where
possible, the Company verifies the values produced by its pricing models to
market prices. Valuation models require a variety of inputs, including
contractual terms, market prices, yield curves, credit spreads, measures of
volatility, and correlations of such inputs. These financial liabilities do not
trade in liquid markets, and as such, model inputs cannot generally be verified
and do involve significant management judgment. Such instruments are typically
classified within Level 3 of the fair value hierarchy.
 
 F-10
 
 The table
below sets forth a summary of changes in the fair value of the Company’s Level 3
financial liabilities (detachable warrants and conversion option liabilities)
for the year ended December 31, 2008.
 
 Balance
      at beginning of period
                          
                          $
                          13,311Additions
      to derivative instruments
                          
                          
                          23,000Change
      in fair value of conversion option
                          
                          
                          (31,597
                          )Reclassification
      to equity upon repayment
                          
                          
                          (3,054
                          )Balance
      at end of period
                          
                          $
                          1,660
 
 The total
amount of the changes in fair value for the period was included in net loss as a
result of changes in the Company’s stock price from December 31,
2008.
 
 In
February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities” (“FAS 159”). FAS 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value, with the objective of improving financial reporting by mitigating
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. The provisions of FAS 159 were adopted January 1, 2008. The Company
did not elect the Fair Value Option for any of its financial assets or
liabilities, and therefore, the adoption of FAS 159 had no impact on the
Company’s consolidated financial position, results of operations or cash
flows.
 
 New
Accounting Pronouncements
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities,” which changes the disclosure requirements for
derivative instruments and hedging activities. SFAS No. 161 requires enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS No.
133, “Accounting for Derivative Instruments and Hedging Activities” and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows. This statement’s disclosure requirements are effective for fiscal years
and interim periods beginning after November 15, 2008. The adoption of this
pronouncement will not have a significant impact on the Company’s consolidated
financial position and results of operations.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.”  This Statement identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  This Statement will not have
an impact on the Company’s financial statements.
 
 In May
2008, the FASB issued FSP Accounting Principles Board ("APB") 14-1 "Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1").  FSP
APB 14-1 requires the issuer of certain convertible debt instruments that
may be settled in cash (or other assets) on conversion to separately account for
the liability (debt) and equity (conversion option) components of the instrument
in a manner that reflects the issuer's non-convertible debt borrowing
rate.  FSP APB 14-1 is effective for fiscal years beginning after
December 15, 2008 on a retroactive basis.  The adoption of this
pronouncement will not have a significant impact on the Company’s consolidated
financial position and results of operations.
 
 In June
2008, the FASB issued Emerging Issues Task Force No. 07-5 (EITF 07-5),
Determining Whether an
Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock.
EITF 07-5 requires entities to evaluate whether an equity-linked financial
instrument (or embedded feature) is indexed to its own stock by assessing the
instrument’s contingent exercise provisions and settlement provisions.
Instruments not indexed to their own stock fail to meet the scope exception of
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities, paragraph 11(a), and should be
classified as a liability and marked-to-market. The statement is effective for
fiscal years beginning after December 15, 2008 and is to be applied to
outstanding instruments upon adoption with the cumulative effect of the change
in accounting principle recognized as an adjustment to the opening balance of
retained earnings. The adoption of this pronouncement will not have a
significant impact on the Company’s consolidated financial position and results
of operations.
 
 F-11
  Other
recent accounting pronouncements issued by the FASB (including its Emerging
Issues Task Force), the AICPA, and the SEC did not, or are not believed by
management to, have a material impact on the Company's present or future
consolidated financial
 
 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 consolidated financial statements, the Company has a net loss
of $4,048,086 for the year ended December 31, 2008, and a working capital
deficiency of $5,557,940 and a stockholders' deficiency of $5,471,562 at
December 31, 2008. 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 consolidated 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.
 
 NOTE
4 - CONVERTIBLE DEBT
 
 Notes
payable at December 31, 2008 and 2007:
 December
      31,
                          
                          
                          December
      31,2008
                          
                          
                          2007Denise
      Barbato, bearing interest at 10% per year, convertible into common stock
      at $0.084 per share. The note is payable on December 31,
    2008
                          
                          $
                          —
                          
                          
                          $
                          34,723Denise
      Barbato, bearing interest at 10% per year, convertible into common stock
      at $0.084 per share. The notes are payable on December 31,
      2008
                          
                          
                          —
                          
                          
                          
                          696,500Global
      Atomic Inc. demand note payable to related party at 10% per year,
      convertible into common stock at $1.00 per share
                          
                          
                          4,000
                          
                          
                          
                          4,000International
      Fission demand note payable to related party at 10% per year, convertible
      into common stock at $1.00 per share
                          
                          
                          15,000
                          
                          
                          
                          15,000Jackie
      Brown, demand note payable to related party, non -interest bearing,
      convertible into common stock at $1.00 per share
                          
                          
                          20,000
                          
                          
                          
                          20,000John
      Powers note payable to related party, convertible into common stock At a
      50% discount to market; interest rate 14%; maturity June 4, 2009
                          
                          
                          13,444
                          
                          
                          
                          12,000John
      Powers note payable to related party, convertible into common stock At a
      50% discount to market; interest rate 14%; maturity March 17, 2009
                          
                          
                          8,000
                          
                          
                          
                          —Total
      notes payable
                          
                          
                          60,444
                          
                          
                          
                          782,223Less:
      current portion
                          
                          
                          (60,444
                          )
                          
                          
                          (782,223
                          )Balance
      notes payable (long term portion)
                          
                          $
                          —
                          
                          
                          $
                          —
  F-12
 During
March 2008 the Company received advances from Denise Barbato in the amount of
$50,000. The advances are convertible into common stock at the rate of $0.084
per share pursuant to the January, 2004 debt consolidation agreement and are due
on December 31, 2008. Since the advances are convertible at a discount to
market, the Company has recorded a debt discount related to the beneficial
conversion feature in the amount of $50,000, based on the proceeds received. The
discount has been fully expensed at December 31, 2008, since the debt was
settled through the issuance of common stock on April 27, 2008.
 
 During
the three months ended March 31, 2008 the Company issued an aggregate of
8,887,000 shares of common stock as payment of $737,221 of principle and $9,287
of accrued interest to Denise Barbato.
 
 During
April 2008 the Company issued an aggregate of 2,134,524 shares of common stock
as payment of $179,002 of principle and $298 of accrued interest to Denise
Barbato.
 
 During
the year ended December 31, 2007 the Company received advances from Denise
Barbato in the amount of $665,500. The advances are convertible into common
stock at the rate of $0.084 per share and the due date has been extended to
December 31, 2008. Since the advances are convertible at a discount to market,
the Company has recorded a debt discount related to the beneficial conversion
feature in the amount of $665,500, based on the proceeds received. The discount
is being amortized over the term of the debt, through December 31, 2008.
Amortization of debt discount for the year ended December 31, 2007 was
$432,333.
 
 During
2007 the Company issued an aggregate of 10,955,000 shares of common stock as
payment of $827,988 of principle and $92,232 of accrued interest to Denise
Barbato.
 
 In March
and April, 2007 the Company received an advance from Long Lane Capital in the
amount of $99,980, pursuant to a $100,000 credit facility. The advance is
convertible into common stock at the rate of 50% of market value and is due in
March 2008. In connection with the total credit facility we have issued a common
stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35
per share. In accordance with EITF 00-27, a portion of the proceeds of the
current advance was allocated to the warrant associated with the current debt
based on its relative fair value, which totaled $70,871 using the Black-Scholes
option pricing model. The assumptions used in the Black-Scholes model are as
follows: (1) dividend yield of 0%; (2) expected volatility of 100%, (3)
risk-free interest rate of 4.5%, and (4) expected life of 2 years. We have also
recorded a beneficial conversion feature in the amount of $29,109, based on the
proceeds allocated to the debt. The aggregate discount is being amortized over
the term of the debt, through March 28, 2008. Amortization of debt discount for
the year December 31, 2007 was $99,980.
 
 During
December, 2007 we issued 1,187,001 shares of common stock upon conversion of the
Long Lane Capital advances of $99,980, plus accrued interest of
$7,444.
 
 The
embedded conversion option related to the Long Lane Capital credit facility is
accounted for under EITF issue No. 00-19 "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock". We
have determined that the embedded conversion option is a derivative liability.
Accordingly, the embedded conversion option will be marked to market through
earnings at the end of each reporting period. The conversion option is valued
using the Black-Scholes valuation model. For the year ended December 31, 2007,
the Company reflected a charge of $78,279 representing the change in the value
of the embedded conversion option. As a result of the conversion of the debt, we
have reclassified an aggregate of $107,387 of our derivative liability to
additional paid in capital. This amount represents the fair value of the
derivative liability on the date of conversion.
 
 F-13
  On March
16, 2007 the Company issued 25,000 shares of common stock as payment of $10,000
of principle and $1,395 of accrued interest to Long Lane Capital. During
February, 2006, the Company had received $10,000 pursuant to a demand promissory
note bearing interest at 12% per year.
 
 For the
years ended December 31, 2008 and 2007, the Company reflected a credit of
$31,597 and a charge of $79,589, respectively, representing the change in the
value of our embedded conversion options during the periods. There was no charge
or credit for the change in the value of our embedded conversion options during
2005.
 
 For the
years ended December 31, 2008, 2007 and 2006, the Company reflected a charge of
$444,617, 539,197 and $31,000, respectively, representing the amortization of
debt discount as interest expense during the periods.
 
 NOTE
5 - 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, 2008 and 2007, the amount due is $4,000. Accrued interest was
$3,000 and $2,600 at December 31, 2008 and 2007, respectively.
 
 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, 2008 and 2007, the amount due is $15,000. Accrued
interest was $10,625 and $9,125 at December 31, 2008 and 2007,
respectively.
 
 On April
16, 2002, the Company received $20,000 from Jackie Brown, the wife of the
Company's former president. The note bears no interest and is due upon demand.
At the request of Ms. Brown, any unpaid balance of principal due will be
converted in common stock at a rate of $1 per share.
 
 On June
4, 2007 the Company received $12,000 pursuant to a promissory note payable to
John Powers, a director, bearing interest at 12% per year and maturing on June
4, 2008. The note is convertible into common stock at the rate of 50% of market
value. We have recorded a beneficial conversion feature in the amount of
$12,000. The discount is being amortized over the term of the debt, through June
4, 2008. Amortization of debt discount for the year ended December 31, 2007 was
$6,884.
 
 The
embedded conversion option related to the Powers note is accounted for under
EITF issue No. 00-19. We have determined that the embedded conversion option is
a derivative liability. Accordingly, the embedded conversion option will be
marked to market through earnings at the end of each reporting period. The
conversion option is valued using the Black-Scholes valuation model. For the
year ended December 31, 2007, the Company reflected a charge of $1,310
representing the change in the value of the embedded conversion
option.
 
 On March
17, 2008 the Company received $8,000 pursuant to a promissory note payable to
John Powers, a director, bearing interest at 14% per year and maturing on March
17, 2009. The note is convertible into common stock at the rate of 50% of market
value. We have recorded a debt discount related to the beneficial conversion
feature in the amount of $8,000, based on the proceeds received. The discount is
being amortized over the term of the debt, through March 17, 2009.
  F-14
 The
embedded conversion option related to the Powers note is accounted for under
EITF issue No. 00-19. We have determined that the embedded conversion option is
a derivative liability. Accordingly, the embedded conversion option will be
marked to market through earnings at the end of each reporting period. The
conversion option is valued using the Black-Scholes valuation
model.
 
 On April
25, 2008 the Company received $15,000 pursuant to a promissory note payable to
John Powers, a director, bearing interest at 14% per year and maturing on April
25, 2009. The note is convertible into common stock at the rate of 50% of market
value. We have recorded a debt discount related to the beneficial conversion
feature in the amount of $15,000, based on the proceeds received. The note was
repaid on August 22, 2008 and the discount has been fully
amortized.
 
 The
embedded conversion option related to the Powers note is accounted for under
EITF issue No. 00-19. We have determined that the embedded conversion option is
a derivative liability. Accordingly, the embedded conversion option will be
marked to market through earnings at the end of each reporting period. The
conversion option is valued using the Black-Scholes valuation model. Upon
repayment of the note, the warrant liability on the date of repayment, $3,054,
was reclassified to additional paid-in capital.
 
 NOTE6 - 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, 2008 and December 31, 2007, the Company
has issued and outstanding 97,490,981 and 73,734,095 shares of common stock,
respectively.
 
 During
the year ended December 31, 2008 the Company issued an aggregate of 5,320,440
shares of common stock, valued at $863,888, for consulting
services.
 
 During
the year ended December 31, 2008 the Company issued 1,299,446 shares as payment
of expenses accrued at December 31, 2007 in the amount of $536,000.
 
 On June
10, 2008 the Company issued 5,250,000 shares as payment of accrued executive
compensation of $542,987. Of this amount, $523,647 was accrued at December 31,
2007.
 
 During
April 2008 we issued 865,476 shares to Denise Barbato for proceeds of $75,000.
The proceeds were received in the third quarter.
 
 During
the year ended December 31, 2008 the Company issued 11,021,524 shares of common
stock as payment of $925,808 of principal and interest due to Denise
Barbato.
 
 During
the year ended December 31, 2007 the Company issued an aggregate of 5,813,762
shares of common stock, valued at $2,612,419, for consulting
services.
 
 During
the year ended December 31, 2007 the Company issued 2,087,688 shares as payment
of expenses accrued at December 31, 2006 in the amount of
$1,382,306.
 
 During
the year ended December 31, 2007 the Company issued an aggregate of 10,955,000
shares of common stock as payment of $827,988 of principle and $92,232 of
accrued interest to Denise Barbato.
 
 During
December, 2007 we issued 1,187,001 shares of common stock upon conversion of the
Long Lane Capital advances of $99,980, plus accrued interest of
$7,444.
 
 During
March 2007 the Company issued 25,000 shares of common stock as payment of
$11,395 of principle and interest due to Long Lane Capital.
 
 In
connection with the Long Lane Capital credit facility we have issued a common
stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35
per share.
 
 F-15
  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.
 
 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.
 
 NOTE
7 - 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.
 
 During
the year ended December 31, 2007, the Company adopted Financial Accounting
Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes" (FIN 48), which supplements SFAS No. 109, "Accounting for Income
Taxes," by defining the confidence level that a tax position must meet in order
to be recognized in the financial statements. The Interpretation requires that
the tax effects of a position be recognized only if it is "more-likely-than-not"
to be sustained based solely on its technical merits as of the reporting date.
The more-likely-than-not threshold represents a positive assertion by management
that a company is entitled to the economic benefits of a tax position. If a tax
position is not considered more-likely- than-not to be sustained based solely on
its technical merits no benefits of the tax position are to be recognized.
Moreover, the more-likely-than-not threshold must continue to be met in each
reporting period to support continued recognition of a benefit. With the
adoption of FIN 48, companies are required to adjust their financial statements
to reflect only those tax positions that are more-likely-than-not to be
sustained. Any necessary adjustment would be recorded directly to retained
earnings and reported as a change in accounting principle.
 
 As of
December 31, 2008 we have fully allowed for any deferred tax assets as
management has determined that it is more-likely-than-not that we will no
sustain the use of our net operating loss carryforwards and have established a
valuation allowance for them. The valuation allowance increased by $1,400,000
and $1,871,000 during the years ended December 31, 2008 and 2007,
respectively.
 
 F-16
  Significant
components of the Company's deferred income tax assets at December 31, 2008 and
2007 are as follows:
 
 2008
                          
                          
                          2007Deferred
      income tax asset:Net
      operating loss carryforward
                          
                          $
                          7,428,000
                          
                          
                          $
                          6,028,000Valuation
      allowance
                          
                          
                          (7,428,000
                          )
                          
                          
                          (6,028,000
                          )Net
      deferred tax asset
                          
                          $
                          -
                          
                          
                          $
                          -
 
 The
provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:
   2008
                                    
                                    
                                    2007
                                    
                                    
                                    2006U.S.
      federal statutory rate
                                    
                                    
                                    -35
                                    %
                                    
                                    
                                    -35
                                    %
                                    
                                    
                                    -35
                                    %Valuation
      allowance
                                    
                                    
                                    35
                                    %
                                    
                                    
                                    35
                                    %
                                    
                                    
                                    35
                                    %Total
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
  As of
December 31, 2008, the Company has a net operating loss carry forward, subject
to limitations of Section 382 of the Internal Revenue Code, as amended, as
follows:
  Year
                          
                          Amount
                          
                          Expiration2000
                          
                          $
                          28,719
                          
                          20202001
                          
                          $
                          710,858
                          
                          20212002
                          
                          $
                          1,902,582
                          
                          20222003
                          
                          $
                          1,663,209
                          
                          20232004
                          
                          $
                          1,474,681
                          
                          20242005
                          
                          $
                          3,475,575
                          
                          20252006
                          
                          $
                          2,627,526
                          
                          20262007
                          
                          $
                          5,341,128
                          
                          20272008
                          
                          $
                          4,000,000
                          
                          2028
  F-17
 Upon
adoption of FIN 48 as of January 1, 2007, the Company had no gross unrecognized
tax benefits that, if recognized, would favorably affect the effective income
tax rate in future periods. At December 31, 2008 the amount of gross
unrecognized tax benefits before valuation allowances and the amount that would
favorably affect the effective income tax rate in future periods after valuation
allowances were $0. These amounts consider the guidance in FIN 48-1, "Definition
of Settlement in FASB Interpretation No. 48". The Company has not accrued any
additional interest or penalties as a result of the adoption of FIN
48.
 
 The
Company files income tax returns in the United States federal jurisdiction and
certain states in the United States. The Company is in the process of preparing
and filing its US federal returns. The 2000 through 2008 federal returns are
considered open tax years as of the date of these consolidated financial
statements. No tax returns are currently under examination by any tax
authorities.
 
  NOTE
8 - PROPERTY AND EQUIPMENT
 
 Property
and equipment at December 31, 2008 and 2007 consists of the
following:
 
 2008
                          
                          
                          2007Office
      equipment
                          
                          $
                          —
                          
                          
                          $
                          25,764Computer
      equipment and software
                          
                          
                          7,430
                          
                          
                          
                          7,430Furniture
      and fixtures
                          
                          
                          —
                          
                          
                          
                          2,4507,430
                          
                          
                          
                          35,644Less:
      accumulated depreciation
                          
                          
                          (3,492
                          )
                          
                          
                          (28,019
                          )Net
      property and equipment
                          
                          $
                          3,938
                          
                          
                          $
                          7,625
 
 Depreciation
expense totaled $3,687, $6,301 and $5,812 for the years ended December 31, 2008,
2005 and 2004, respectively.
 
  NOTE
9 - ACCRUED EXECUTIVE COMPENSATION
 
 The
Company had an Employment Agreement with Paul M. Brown, its former president,
whereby the Company was to pay Mr. Brown an annual base salary of $250,000. For
the year ended December 31, 2002, the amount accrued until Mr. Brown's death was
$142,667. As of December 31, 2008 and 2007 the amount accrued was
$142,667.
 
 On
September 13, 2001, the Company hired Patrick Herda as the vice president of
business development. Currently Mr. Herda is the President and CEO of the
company. For the year 2006, Mr. Herda's salary was $110,000 and for the year
2007 Mr. Herda's salary was $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, 2008 and 2007, the amount accrued was $31,576 and $523,647,
respectively. On
January 10, 2006 Mr. Herda entered into a 3-way agreement whereby he irrevocably
assigned deferred compensation totaling $542,987 to IPTH in exchange for a
guarantee to receive a minimum of $80,000 in cash salary from Nuclear Solutions,
Inc. for the 2006 fiscal year.On June 10, 2008 pursuant to the January
10, 2006 agreement the Company issued 5,250,000 shares to IPTH valued at
$542,987.
 
 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, 2008 and 2007, the
amount accrued was $328,799 and at Mr. Dempsey's discretion will be paid back
either in cash or common stock at a price of $1 per share.
 
 F-18
  Kenneth
Faith, the company’s Chief Financial Officer did not receive a salary during
fiscal year ending December 31, 2007.  The board of directors
authorized setting Mr. Faith’s annual base salary at $225,000 commencing March
1, 2008. During 2008, the Company has been unable to pay Mr. Faith's his full
salary and has accrued the unpaid amount. As of December 31, 2008, the amount
accrued was $167,500.
 
 John
Powers, independent director of the company, did not receive a salary during
fiscal year ending December 31, 2007.  The board of directors
authorized setting Mr. Powers 2008 directors compensation at $26,250 commencing
March 1, 2008. During 2008, the Company has been unable to pay Mr. Powers his
compensation and has accrued the unpaid amount. As of December 31, 2008, the
amount accrued was $21,875.
 
 Jack
Young, as Vice President of Nuclear Solutions, Inc. did not receive a salary
during fiscal year ending December 31, 2007. Commencing March 2008, the board of
directors authorized setting Mr. Young’s annual base salary at $185,000. The
Company has been unable to pay Mr. Young his full salary and has accrued the
unpaid amount. As of December 31, 2008, the amount accrued was
$154,167.
 
  NOTE
10 - COMMITMENTS AND CONTINGENCIES
 
 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, 2008, 2007 and 2006 the company paid $53,212, $63,293
and $59,714 in rent expense respectively. The Company does not currently have
any long-term lease commitments except as noted above.
 
 F-19
 
 NOTE
11 -OPTIONS AND WARRANTS
 
 The
following table summarizes the changes in options and warrants outstanding and
the related exercise prices for the shares of the Company's common stock issued
by the Company as of December 31, 2008
 
 Number
      ofShares
                              
                              
                              WeightedAverageExercisePriceOutstanding
      at January 1, 2006
                              
                              
                              1,250,000
                              
                              
                              $
                              0.34Granted
                              
                              
                              —
                              
                              
                              
                              —Exercised
                              
                              
                              (1,250,000
                              )
                              
                              
                              0.34Canceled
      or expired
                              
                              
                              —
                              
                              
                              
                              —Outstanding
      at December 31, 2006
                              
                              
                              —
                              
                              
                              
                              —Granted
                              
                              
                              500,000
                              
                              
                              
                              0.35Exercised
                              
                              
                              —
                              
                              
                              
                              —Canceled
      or expired
                              
                              
                              —
                              
                              
                              
                              —Outstanding
      at December 31, 2007
                              
                              
                              500,000
                              
                              
                              
                              0.35Granted
                              
                              
                              —
                              
                              
                              
                              —Exercised
                              
                              
                              —
                              
                              
                              
                              —Canceled
      or expired
                              
                              
                              —
                              
                              
                              
                              —Outstanding
      at December 31, 2008
                              
                              
                              500,000
                              
                              
                              $
                              0.35
 
 In April
2007, in connection with the total credit facility, we issued Long Lane Capital
a warrant to purchase 500,000 shares of common stock, exercisable at $0.35 per
share. In accordance with EITF 00-27, a portion of the proceeds of the current
advance was allocated to the warrant associated with the current debt based on
its relative fair value, which totaled $70,871 using the Black-Scholes option
pricing model. The assumptions used in the Black-Scholes model are as follows:
(1) dividend yield of 0%; (2) expected volatility of 100%, (3) risk-free
interest rate of 4.5%, and (4) expected life of 2 years.
 
 
 NOTE
12 - NON-QUALIFIED STOCK GRANT AND OPTION PLAN
 
 The
Company has adopted Non-Qualified Stock Grant and Option Plan. The Plan is
administered by the Company's Board of Directors. Directors, officers,
employees, consultants, attorneys, and others who provide services to Company
are eligible participants. Participants are eligible to be granted warrants,
options, common stock as compensation.
 
 On June
30, 2003, the Company adopted the 2003 Non-Qualified Stock Grant and Option
Plan. The Plan reserved 5,000,000 shares. The Plan was registered on a Form S-8
registration statement on July 28, 2003. On March 30 2004, the Company adopted
the 2004 Non-Qualified Stock Grant and Option Plan. The Plan reserved 5,000,000
shares. The Plan was registered on a Form S-8 registration statement on March
30, 2004. The Company issued 5,000,000 shares to thirteen individual comprised
of consultants, attorneys and others who provided services to Company during
2004. On November 10, 2004, the Company adopted the 2005 Non-Qualified Stock
Grant and Option Plan. The Plan reserved 4,000,000 shares. The Plan was
registered on a Form S-8 registration statement filed on November 16, 2004. The
Company issued 2,071,601 shares to six individuals comprised of consultants,
attorneys and others who provided services to the Company during 2004. On August
5, 2005, the Company adopted another 2005 Non-Qualified Stock Grant and Option
Plan. The Plan reserved 5,500,000 shares. The Plan was registered on a Form S-8
registration statement filed on August 17, 2005.
 
 F-20
  On March
9, 2007, the Company registered 5,000,000 common shares under a new Stock Grant
Plan. The Stock Grant Plan is intended to serve as an incentive to and to
encourage stock ownership by certain directors, officers, employees of and
certain persons rendering contract services to the Company, so that they may
acquire or increase their proprietary interest in the success of the
Corporation, and to encourage them to remain in the Corporation's
service.
 
 On
November 28, 2007, the company adopted a Stock Grant Plan. The plan reserved
5,000,000 shares. The Plan was registered on Form S-8 Registration Statement
filed on December 6, 2007. Directors, officers, employees, consultants,
attorneys, and others who provide services to our Company are eligible
participants. Participants are eligible to be granted warrants, options, common
stock as compensation.
  F-21
 Item
9.Changes In
and Disagreements with Accountants on Accounting and Financial
Disclosure.
  We have
had no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures with any of our
accountants for the year ended December 31, 2008 or any interim period. We
have not had any other changes in nor have we had any disagreements, whether or
not resolved, with our accountants on accounting and financial disclosures
during our recent fiscal year or any later interim period.
 
  Item
9A.Controls
and Procedures.
  Evaluation of Disclosure
Controls and Procedures
 
 We
maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) that are designed to be effective in providing reasonable assurance that
information required to be disclosed in our reports under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission (the “ SEC”),
and that such information is accumulated and communicated to our management to
allow timely decisions regarding required disclosure.
 
 In
designing and evaluating disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable, not absolute assurance of achieving the
desired objectives. Also, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty and that breakdowns can occur because of simple error or mistake. The
design of any system of controls is based, in part, upon certain assumptions
about the likelihood of future events and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions.
 
 As of the
end of the period covered by this report, we carried out an evaluation, under
the supervision and with the participation of management, including our chief
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based upon that
evaluation, management concluded that our disclosure controls and procedures are
effective as of December 31, 2008 to cause the information required to be
disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods prescribed
by SEC, and that such information is accumulated and communicated to management,
including our chief executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.
 
 Evaluation of and Report on
Internal Control over Financial Reporting
 
 Management
is responsible for establishing and maintaining adequate internal control over
financial reporting of the Company. Management, with the participation of our
principal executive officer and principal financial officer, has evaluated the
effectiveness of our internal control over financial reporting as of December
31, 2008 based on the criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that, as of December
31, 2008, our internal control over financial reporting were effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with U.S. generally accepted accounting principles.
 
 This
annual report does not include an attestation report of the company's registered
public accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by the
company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the company to provide only management's report in this annual
report.
  21
  Changes in Internal Control
over Financial Reporting
 
 There was
no change in our internal controls over financial reporting identified in
connection with the requisite evaluation that occurred during our last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
 
 Limitations.
 
 Our
management, including our Principal Executive Officer and Principal Financial
Officer, does not expect that our disclosure controls or internal controls over
financial reporting will prevent all errors or all instances of fraud. A control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system's objectives will be met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and any design may not succeed in achieving its
stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures. Because of the inherent
limitation of a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.
 
  ITEM
9B.Other
Information
  
 PART
III
 
  Item
10.Directors,
Executive Officers and Corporate Governance
  The
following table sets forth the officers and directors of the Nuclear Solutions,
Inc.
 
 (a)Directors and
Executive Officers
 
 The
following persons are the Directors and Executive Officers of Nuclear Solutions,
Inc.
 Name
                  
                  Age
                  
                  Position(s)Patrick
      Herda
                  
                  39
                  
                  President,
      CEO, Chairman Board DirectorsKenneth
      Faith
                  
                  39
                  
                  CFO,
      Principal Accounting Officer,Member
      Board of DirectorsJohn
      Powers, Ph.D.
                  
                  74
                  
                  Member
      Board of DirectorsJack
      Young
                  
                  79
                  
                  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.
 
 22
  KENNETH
A. FAITH, Chief Financial Officer, Principal Accounting Officer, Member of the
Board of Directors.
 
 On
October 9, 2006, Mr. Faith was appointed Chief Financial Officer and Principal
Accounting Officer. On December 7, 2006, the Board of Directors nominated
Kenneth Faith to the Company's board of directors.
 
 Mr. Faith
holds a Bachelor of Science Degree in Accounting from Drexel University,
Philadelphia, Pennsylvania.
 
 During
the past five years, Mr. Faith has held a variety of executive level positions
as outlined below:
 
 PFPC,Inc.,
Wilmington, DE. February 2006-Present. Title: Fund Accounting and Administration
Director. Mr. Faith is responsible for financial reporting, budget analysis and
client relations for one of the firm's five largest clients, 92 mutual funds,
with a combined net assets of $50 billion.
 
 Citco
Mutual Fund Services, Inc., Malvern, PA. March 2003-November 2005. Title: Chief
Operating Officer. Mr. Faith was responsible for daily operations, responses to
requests for proposal, business planning and client relations of a start up
mutual fund service provider. During Mr. Faith's tenure at Citco he was
responsible for tripling service assets and firm revenues.
 
 JP Morgan
Fleming Asset Management, New York, NY & Wilmington, DE. March 2002-March
2003. Title: Vice President, Fund Financial Intermediaries Operations Quality
& Analysis. Mr. Faith's responsibilities included creating analytical
reporting for business monitoring, evaluating process flows for efficiency,
coordinating with internal and external auditors and performing consulting
services for the entire Fund organization. His additional responsibilities
included establishing infrastructure to support launch and distribution of new
products, improving operational workflows, insuring effective project
implementation focused on reducing operational risk.
 
 JOHN
POWERS, Ph.D, Member Board of Directors
 
 John
Powers is the Chairman of the FirTH Alliance, LLC. The Alliance, created to
respond to the emerging terrorist threat, includes senior executives and public
safety leaders who helped formulate the nation’s contingency planning,
continuity of operations, emergency preparedness and infrastructure assurance
programs.
 
 John’s
approach to Managing the Response to a Major Terrorist Event was highlighted in
McGraw Hill’s 2004/2005 Annual Review of Homeland Security. It is based on an
“automated game plan” across a region that will enable participating
jurisdictions to respond decisively following a catastrophic
incident.
 
 John is
concurrently serving as a principal in a DTRA effort to prevent the infiltration
of a nuclear weapon into the US and is developing a comprehensive
countermeasures architecture that will move detection and interdiction as close
to the source as possible. The centerpiece of this proposed architecture will be
a rigorous indications and warning system with levels of awareness and graduated
response actions.
 
 From 1996
to 1998, Dr. Powers served as a Commissioner and the Executive Director of the
President’s Commission on Critical Infrastructure Protection. There, he managed
the research, provided overall direction to the Commission’s deliberations and
led the formulation of the “national structures” recommendations adopted by the
President in PDD 63.
 
 23
  Dr.
Powers joined the Federal Emergency Management Agency in 1983 and served as the
head of its Office of Civil Preparedness and then its Office of Federal
Preparedness. From 1993 to 1995, he served as the Director of Region V in
Chicago, Illinois, and had responsibility for the Federal response to the "Great
Midwest Flood" in those states.
 
 From 1978
to 1983, he served as the Director of Research and Technical Assessment for the
Department of Energy. His first assignment was as Executive Director for the
Interagency Review Group on Nuclear Waste Management reporting to President
Jimmy Carter and then as Executive Director of the DOE precursor to the
Synthetic Fuels Corporation in which he managed the award of seven billion
dollars to stimulate new alternative energy projects.
 
 Previously,
he created one of the early pattern recognition programs, developed the skin
friction law used in the Polaris nose cone, projected, stochastically, the
commercial value of the proposed new energy technologies (contributing to the
cancellation of two $2 billion demo projects), created a safeguards and security
design methodology for nuclear facilities (parts of which are still in use) and
managed development of the National Coal Model.
 
 In 1954,
at the age of 19, he entered the U.S. Naval Flight Training program and upon
completion was commissioned in the United States Marine Corps. After leaving
active duty in 1958, he continued in the Marine Corps Reserve. As a reservist,
he commanded an A4 squadron at Willow Grove, PA, and later, in Washington
developed the concept and managed preparation of the Marine Corps Mobilization
Management Plan and the DOD Master Mobilization Plan.
 
 Dr.
Powers holds a B.S. degree from Columbia University, an M. Div. degree from
Princeton Theological Seminary, and a Ph.D. in physics from the University of
Pennsylvania.
 
 JOHN C.
(JACK) YOUNG, Former Vice President of Corporate Development and Former
President of Fuel Frontiers, Inc.
 
 Jack
Young, was 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. On July 23, 2008, Jack Young, Vice President of
Nuclear Solutions, Inc. and President of our subsidiary, Fuel Frontiers, Inc.,
tendered his resignation from both executive officer positions.
 
 (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.
 
 24
  David C.
Maland, President, Fuel Frontiers, Inc.
 
 On July
24, 2008, the board of directors appointed David C. Maland, 52, to succeed Mr.
Young as President of Future Fuels, Inc. (FFI). Mr. Maland has been an
independent business consultant for the last five years.
 
 Mr.
Maland joins FFI with over 25 years of experience in business development,
within the Energy, Agricultural, and Technology industries. His career has
spanned leadership positions in Sales, Marketing, Operations, Logistics and
Executive Management. Mr. Maland’s ability to effectively manage fast growing
business has placed one organization on the “INC 100 List” of fastest growing
companies on two consecutive years. As a Business Consultant this experience
brought him clients from fortune 500 to start-ups, on three continents. He has
worked with diverse industries including Energy, Steel, Technology and Building,
reinvigorating or growing revenue with programs for Marketing and Sales, New
Market Evaluations, Venture Financing along with the corresponding business
plans.
 
 Mr.
Maland has worked with Mr. Young in developing FFI business and economic
performance models and in taking the lead in the Kentucky coal-to-liquid fuels
(CTL) program. Mr. Maland has 17 years in transportation, distribution and
marketing of propane gas and has a background in large-scale project information
and management systems.
 
 (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.
 
 25
  We
received no reports covering purchase and sale transactions in our common stock
during 2008, and we believe that each person who, at any time during 2008, 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 2008, except as
follows:
 
 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:
 
 Honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;
 
 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;
 
 Compliance
with applicable governmental laws, rules and regulations,
 
 The
prompt internal reporting to an appropriate person or persons identified in the
code of violations of our Code of Ethical Conduct;
  and
 
 Accountability
for adherence to the Code.
 
  Item
11.Executive
Compensation
  
 The following information is provided concerning the compensation
of the named executive officers for the last two fiscal
years:
 
 Table
1.
   NonqualifiedName
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  Non-Equity
                                  
                                  
                                  Deferred
                                  
                                  
                                  Alland
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  Stock
                                  
                                  
                                  Option
                                  
                                  
                                  Incentive
      Plan
                                  
                                  
                                  Compensation
                                  
                                  
                                  OtherPrincipal
                                  
                                  
                                  
                                  Salary
                                  
                                  
                                  Bonus
                                  
                                  
                                  Awards
                                  
                                  
                                  Awards
                                  
                                  
                                  Compensation
                                  
                                  
                                  Earnings
                                  
                                  
                                  Compensation
                                  
                                  
                                  TotalPosition
                                  
                                  Year
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)
                                  
                                  
                                  ($)(a)
                                  
                                  (b)
                                  
                                  (c)
                                  
                                  
                                  (d)
                                  
                                  
                                  (e)
                                  
                                  
                                  (f)
                                  
                                  
                                  (g)
                                  
                                  
                                  (h)
                                  
                                  
                                  (i)
                                  
                                  
                                  (j)Patrick
      Herda,
                                  
                                  2008
                                  
                                  
                                  250,000
                                  (1)
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  250,000Pres.,
      CEO and
                                  
                                  2007
                                  
                                  
                                  55,000
                                  
                                  
                                  
                                  16,196
                                  
                                  
                                  
                                  630,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  701,196Director
      (1)Ken
      Faith, CFO
                                  
                                  2008
                                  
                                  
                                  225,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  44,250
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  225,000and
      Director (2)
                                  
                                  2007
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  108,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  108,000Jack
      Young, V.P
                                  
                                  2008
                                  
                                  
                                  185,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  185,0002007
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  72,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  72,000
 
 (1)
Patrick Herda, Nuclear Solutions, Inc. President and Chief Executive Officer’s
base salary for the fiscal year ending December 31, 2008 was
$250,000.  Mr. Herda was paid $166,583 during 2008.  The
board authorized increasing Mr. Herda’s base annual salary to $250,000
commencing March 1, 2008.  The company was unable to pay Mr. Herda his
full salary and all unpaid salary has been accrued. As of December 31, 2008, Mr.
Herda's accrued unpaid executive compensation was $31,576. On January 10, 2006
Mr. Herda entered into a 3-way agreement whereby he irrevocably assigned
deferred compensation totaling $542,987 to IPTH in exchange for a guarantee to
receive a minimum of $80,000 in cash salary from Nuclear Solutions, Inc. for the
2006 fiscal year. On June 10, 2008 pursuant to the January 10, 2006 agreement
the Company issued 5,250,000 shares to IPTH valued at $542,987. In December
2008, the board of directors, in order to preserve operating capital, informed
Mr. Herda that his effective salary was reduced to $39,600 annually beginning
January 1, 2009, due to a working capital deficiency related to severe
deterioration in the financial markets.
 
 26
  (2)
Kenneth Faith joined the Company in the last quarter of fiscal year
2006.  Kenneth Faith, is Nuclear Solutions, Inc. Chief Financial and
Principal Accounting Officer. During 2008, the board of directors authorized
setting Mr. Faith’s annual base salary at $225,000 commencing March 1,
2008.  During 2008, the Company paid Mr. Faith $20,000.  The
unpaid salary balance of $167,500 has been accrued.
 
 (3) Jack
Young formerly Vice President of Nuclear Solutions, Inc. and President of Fuel
Frontiers, Inc.  During 2008, the board of directors authorized
setting Mr. Young’s annual base salary at $185,000 as President of Future Fuels,
Inc. commencing March 1, 2008. The Company has been unable to pay Mr. Young his
full salary and has accrued the unpaid amount. As of December 31, 2008, the
amount accrued was $154,167.
 
 GRANTS OF
PLAN-BASED AWARDS   We made no grants from plans to any executive
officer during the fiscal year ended December 31, 2008.
 
 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,
2008.  Previous grants awarded to management have not been issued and
delivered as of the date of this report.
 
 Grants
of Plan-Based Awards
 
 We made
three common stock grants of restricted stock to Patrick Herda, Kenneth Faith
and Jack Young during the fiscal year ending December 31, 2007.  As of
the date of this report, the shares have not been issued.
 
 Outstanding Equity Awards at Fiscal Year-End
 
 There
were outstanding equity awards to various executive officers at the end of the
fiscal year ended December 31, 2008 representing equity grants made during
2007.
 
 Director Compensation
 
 The
Company has not established any policy concerning director compensation. The
board of directors authorized setting Mr. Powers 2008 directors’ compensation at
$26,250 commencing March 1, 2008. During 2008, the Company has been unable to
pay Mr. Powers his compensation and has accrued the unpaid amount. As of
December 31, 2008, the amount accrued was $21,875.
 
 Presently,
Mr. Powers is the only director who will receive annual director
compensation.
 
 DIRECTOR
INDEPENDENCE
 
 Director
Independence
 
 The Board
has determined that we do not have a majority of independent directors as that
term is defined under Rule 4200(a) (15) of the Nasdaq Marketplace Rules, even
though such definition does not currently apply to us, because we are not listed
on Nasdaq.
 
 MEETINGS
AND COMMITTEES OF THE BOARD OF DIRECTORS
 
 We
presently have no Board committees. Until further determination, the full Board
will undertake the duties of the audit committee, compensation committee and
nominating committee. We do not currently have an “audit committee financial
expert” since we currently do not have an audit committee in place.
  The
Company does not currently have a process for security holders to send
communications to the Board.
 
 27
  Item
12.Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder   Matters.
  Table 1
lists the persons who are known to the Company to be the owners of more than
five percent of the Company’s equity shares according to the Company’s records
as of December 31, 2008. Beneficial Ownership of more than 5% based on
97,490,981 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 97,490,981  shares as set forth in
(a) above as of December 31, 2008.
 
 Table
2.
  (1)
                                          
                                          (2)
                                          
                                          (3)
                                          
                                          
                                          (4)Title
      of Class
                                          
                                          Address
                                          
                                          Amount
      and Nature
                                          
                                          
                                          Percent
      of
                                            ClassCommon
      StockPatrick
      Herda
                                          
                                          5505
      Connecticut Ave NW
                                          
                                          
                                          4,135,000
                                          (1)
                                          
                                          
                                          4.24
                                          %Suite
      191Washington,
      DC 20015Kenneth
      Faith
                                          
                                          5505
      Connecticut Ave., NW
                                          
                                          
                                          775,000
                                          (2)
                                          
                                          
                                          0.8
                                          %Suite
      191Washington,
      DC 20015John
      Powers
                                          
                                          5505
      Connecticut Ave NW
                                          
                                          
                                          420,000
                                          (3)
                                          
                                          
                                          0.43
                                          %Suite
      191Washington,
      DC 20015Jack
      Young
                                          
                                          5505
      Connecticut Ave NW
                                          
                                          
                                          400,000
                                          (4)
                                          
                                          
                                          0.41
                                          %Suite
      191Washington,
      DC 20015Total
                                          
                                          
                                          
                                          
                                          5,730,000
                                          
                                          
                                          
                                          5.87
                                          %
 (1)
3,500,000 shares have been authorized for issuance, but have not yet been
issued.
 (2)
600,000 shares have been authorized for issuance, but have not yet been
issued.
 (3)
150,000 shares have been authorized for issuance, but have not yet been
issued.
 (4)
400,000 shares have been authorized for issuance, but have not yet been
issued.
 
 (c)Changes in Control.
To management’s knowledge, there are no arrangements which may result in a
change in control.
 
 28
  Item
13.Certain
Relationships and Related Transactions and Director Independence.
 
 Transactions with Management and
Others.
 
 Except as
otherwise set forth in this report, no member of management, executive officer,
director, nominee for a director or security holder who is known to the Company
to own of record or beneficially more than five percent of any class of the
Company’s voting securities, nor any member of the immediate family of any of
the foregoing persons, has had any direct or indirect material interest in any
transaction to which the Company was or is to be a party.
 
 On March
1, 2008, the board of directors established the following annual base salaries
for its principal executive officers.  There are no employment
agreements between the company and any of its officers.
 
 Patrick
Herda, Nuclear Solutions, Inc. President and Chief Executive Officer’s base
salary for the fiscal year ending December 31, 2007 was
$55,000.  During 2007, the board of directors authorized the issuance
of 3,500,000 shares of common stock valued at $630,000. As of the date of this
report the shares have not been issued.  The board authorized
increasing Mr. Herda’s base annual salary to $250,000 commencing March 1,
2008.
 
 Kenneth
Faith, Nuclear Solutions, Inc. Chief Financial and Principal Accounting Officer
did not receive a salary during fiscal year ending December 31, 2007. During
2007, the board of directors did authorize the issuance of 600,000 shares common
stock valued at $108,000. As of the date of this report the shares have not been
issued. The board authorized setting Mr. Faith’s annual base salary at $225,000
commencing March 1, 2008.
 
 Jack
Young, Vice President of Nuclear Solutions, Inc. and President of Fuel
Frontiers, Inc., a company subsidiary, did not receive a salary during fiscal
year ending December 31, 2007. During 2007, the board of directors authorized
the issuance of 400,000 shares to Mr. Young valued at $72,000. As of the date of
this report the shares have not been issued. The board of directors authorized
setting Mr. Young’s annual base salary at $185,000 as President of Future Fuels,
Inc. commencing March 1, 2008.
 
 During
2007, the board of directors authorized the issuance of 150,000 shares to John
Powers, member of the board of directors, valued at $27,000. As of the date of
this report the shares have not been issued.
 
 On March
1, 2008, the Board of Directors authorized paying John Powers, a member of our
board of directors, 150,000 shares of common stock as annual director
compensation. As of the date of this report the shares have not been
issued.
 
 On June
4, 2007 the Company received $12,000 pursuant to a promissory note payable to
John Powers, a director, bearing interest at 12% per year and maturing on June
4, 2008. The note is convertible into common stock at the rate of 50% of market
value. We have recorded a beneficial conversion feature in the amount of
$12,000. The discount is being amortized over the term of the debt, through June
4, 2008. Amortization of debt discount for the year ended December 31, 2007 was
$6,884.
 
 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.
 
 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.
 
 Transactions with
Promoters.  None.
 
  Item
14.Principal
Accounting Fees and Services.
  The
Company paid or accrued the following fees in each of the prior two fiscal years
to its principal accountant during 2007 and 2008, RBSM LLP as our auditor for
our fiscal year ending December 31, 2008.
  Year
      End 12-31-07
                                          
                                          
                                          Year
      End 12-31-08Audit Fees
                                          
                                          $
                                          52,622
                                          
                                          
                                          $
                                          46,062Audit-related Fees
                                          
                                          
                                          -0-
                                          
                                          
                                          
                                          -0-Tax Fees
                                          
                                          
                                          -0-
                                          
                                          
                                          
                                          -0-All other fees
                                          
                                          
                                          -0-
                                          
                                          
                                          
                                          -0-Total Fees
                                          
                                          $
                                          52,622
                                          
                                          
                                          $
                                          46,062
  29
 
 AUDIT
FEES. Audit fees consist of fees billed for professional services rendered for
the audit of the Company's consolidated financial statements and review of the
interim consolidated financial statements included in quarterly reports and
services that are normally provided by the Company's principal accountants in
connection with statutory and regulatory filings or engagements.
 
 AUDIT-RELATED
FEES. Audit related fees consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees." There were no Audit-Related services provided in fiscal 2007 or
2008.
 
 TAX FEES.
Tax fees are fees billed for professional services for tax compliance, tax
advice and tax planning.
 
 ALL OTHER
FEES. All other fees include fees for products and services other than the
services reported above. There were no management consulting services provided
in fiscal 2007 or 2008.
 
 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 2008 did not engage any
other persons or firms other than the principal accountant's full-time,
permanent employees.
 
 
 Item
15.Exhibits
and Financial Statement Schedules
 (a)
Exhibits
  *3.1
                      
                      Certificate
      of Amendment of Articles of Incorporation of Stock Watch Man, Inc. filed
      Secretary of State Nevada on September 12, 2001 changing corporate name to
      Nuclear Solutions, Inc.*3.2
                      
                      Articles
      of Incorporation of Stock Watch Man, Inc.*3.3
                      
                      Bylaws
      of Nuclear Solutions, aka, Stock Watch Man, Inc.*20.1
                      
                      Code
      of Ethical Conduct21
                      
                      List
      of subsidiaries23
                      
                      Form
      S-8 Registration Statement Filed with SEC December 6,
  200731.1
                      
                      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 to32.2
                      
                      Chief
      Financial Officer- Section 906 Certification pursuant to Sarbanes-Oxley
      Act.
 
 *
Previously filed.
 
 30
 
 SIGNATURES
 
 Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
 
 Dated:
April 15, 2009
  Nuclear
      Solutions, Inc./s/
      Patrick Herda
                        
                        
                        /s/
      Kenneth FaithBy:
      Patrick Herda
                        
                        
                        By:
      Kenneth FaithTitle:
      CEO
                        
                        
                        Title:
      CFO
 
 In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
  /s/
      Patrick Herda
                  
                  
                  April
      15, 2009By:
      Patrick HerdaTitle:
      CEO, Director
  /s/
      Kenneth Faith
                    
                    
                    April
      15, 2009By:
      Kenneth FaithTitle:
      Director
  31