UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  X.QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended March 31, 2011  .TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934  For the transition period from ______ to _______  Commission File Number 333-1145876  PACIFIC BLUE ENERGY CORP. (Exact name of registrant as specified in its charter)  Nevada80-0647957(State of incorporation)(I.R.S. Employer Identification No.)  1016 W. University Avenue Suite 218 Flagstaff, AZ 86001 (Address of principal executive offices)  (602) 910-2114 (Registrants telephone number)  with a copy to: Carrillo, Huettel & Zouvas, LLP 3033 Fifth Ave. Suite 400 San Diego, CA 92103 Telephone (619) 546-6100 Facsimile: (619) 546-6060  Indicate by check mark whether the registrant (1) has 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 .  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes . No . (Not required)  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  Large accelerated filer.Accelerated filer.Non-accelerated filer. (Do not check if a smaller reporting company)Smaller reporting companyX.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes . No X.  As of May 16, 2011, there were ­­­­­­­­41,029,000shares of the registrants $.001 par value common stock issued and outstanding.    PACIFIC BLUE ENERGY CORP.*  TABLE OF CONTENTS  PAGEPART IFINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS3ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS11ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK13ITEM 4.CONTROLS AND PROCEDURES14PART IIOTHER INFORMATIONITEM 1.LEGAL PROCEEDINGS15ITEM 1A.RISK FACTORS15ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS15ITEM 3.DEFAULTS UPON SENIOR SECURITIES15ITEM 4.[REMOVED AND RESERVED]15ITEM 5.OTHER INFORMATION16ITEM 6.EXHIBITS17  Special Note Regarding Forward-Looking Statements  Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pacific Blue Energy Corp. (the Company), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words may, will, should, expect, anticipate, estimate, believe, intend, or project or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.  *Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "PBEC" refers to Pacific Blue Energy Corp.  2   PART I - FINANCIAL INFORMATION  ITEM 1. FINANCIAL STATEMENTS          PACIFIC BLUE ENERGY CORP.  (A Development Stage Company)  CONSOLIDATED FINANCIAL STATEMENTS  FOR THE PERIOD ENDED MARCH 31, 2011          Balance Sheets (unaudited) 4 Statements of Operations (unaudited) 5 Statements of Cash Flows (unaudited) 6 Notes to the Financial Statements (unaudited) 7    3     PACIFIC BLUE ENERGY CORP. (An Exploration Stage Company) Consolidated Balance Sheets (Unaudited)  March 31,
2011
$December 31,
2010
$ASSETSCash246,844432,833Prepaid expense185,625249,316Total Current Assets432,469682,149Property and Equipment36,86940,965Land591,000591,000Total Assets1,060,3381,314,114LIABILITIESCurrent liabilitiesAccounts Payable and Accrued Liabilities38,10219,037Due to Related Party11,982Loan Payable12,48012,480Total Liabilities50,58243,499STOCKHOLDERS EQUITYPreferred StockAuthorized: 10,000,000 shares, par value of $0.001Issued and outstanding: nil preferred sharesCommon StockAuthorized: 290,000,000 shares, par value of $0.001Issued and outstanding: 41,029,000 common shares41,02941,029Common Stock Issuable27,00027,000Additional Paid-In Capital3,317,7393,317,739Deficit accumulated during the exploration stage(2,376,012)(2,115,153)Total Stockholders Equity1,009,7561,270,615Total Liabilities and Stockholders Equity1,060,3381,314,114   (The accompanying notes are an integral part of these consolidated financial statements)  4     PACIFIC BLUE ENERGY CORP. (An Exploration Stage Company) Consolidated Statements of Operations (Unaudited)  For the
Three Months
Ended
March 31,
2011
$For the
Three Months
Ended
March 31,
2010
$Accumulated
from April 3,
2007
(Date of
Inception) to
March 31,
2011
$RevenueOperating ExpensesAmortization and Depreciation4,09612,289Consulting Fees109,716890,445Exploration Costs17,400General and Administrative74,6369,757240,342Impairment loss on wind park419,258Impairment loss on Gila Bend Property79,420Management Fees20,500155,542Professional Fees39,38824,050420,223Wages and Benefits32,759141,882Total Operating Expenses260,59554,3072,376,801Loss from Operations(260,595)(54,307)(2,376,801)Other income (expense)Interest expense(308)(390)Interest income441,179Other income (expense)(264)789Net Loss(260,859)(54,307)(2,376,012)Net Loss per Share  Basic and Diluted(0.01)Weighted Average Shares Outstanding  Basic and Diluted41,029,00037,436,111   (The accompanying notes are an integral part of these consolidated financial statements)  5     PACIFIC BLUE ENERGY CORP. (An Exploration Stage Company) Consolidated Statements of Cash Flows (Unaudited)  For the
Three Months
Ended
March 31,
2011For the
Three Months
Ended
March 31,
2010Accumulated from
April 3, 2007
(Date of
Inception) to
March 31,
2011$$$Operating ActivitiesNet loss for the period(260,859)(54,307)(2,376,012)Adjustments to net loss relating to non-cash operating items:Amortization4,09612,289Impairment loss on wind park419,258Impairment loss on Gila Bend Property79,420Shares issued for services518,717Changes in operating assets and liabilities:Accounts payable and accrued liabilities19,065(2,163)38,102Prepaid expenses63,691(185,625)Net Cash Used In Operating Activities(174,007)(56,470)(1,493,851)Investing ActivitiesDeposit payment on property purchase(79,420)Purchase of equipment(49,158)Net cash paid for acquisition(299,622)Net Cash Used In Investing Activities(428,200)Financing ActivitiesProceeds from loan advance28,700Proceeds from loan payable364,198Repayment of loan payable(351,718)Proceeds from related parties29,396Repayments to related parties(11,982)(11,982)Proceeds from common shares issuances25,0002,139,001Proceeds from common shares subscribed20,000Net Cash Provided By Financing Activities(11,982)73,7002,168,895Increase (Decrease) in Cash(185,989)17,230246,844Cash  Beginning of Period432,8332,448Cash  End of Period246,84419,678246,844Supplemental DisclosuresInterest paidIncome tax paid  (The accompanying notes are an integral part of these consolidated financial statements)  6   PACIFIC BLUE ENERGY CORP. (A Development Stage Company) Notes to the Consolidated Financial Statements (Unaudited)   1. Nature of Operations and Continuance of Business  Pacific Blue Energy Corp. (the Company) was incorporated under the laws of the State of Nevada on April 3, 2007. The Company is a development stage company that is focused on developing renewable energy projects through solar and wind resources.  On April 5, 2010, the Company acquired a 100% interest of Ship Ahoy LLC, a limited liability company in Arizona, in exchange for $300,000 and 1,000,000 common shares of the Company.  Going Concern  These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of March 31, 2011, the Company had an accumulated deficit of $2,376,012. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  2. Summary of Significant Accounting Policies  a) Basis of Presentation and Principles of Consolidation  These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Ship Ahoy LLC. All intercompany transactions have been eliminated. The Companys fiscal year-end is December 31.  b) Use of Estimates  The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability of its long-lived assets, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.  c) Interim Financial Statements  These interim unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.  d) Cash and Cash Equivalents  The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of March 31, 2011 and December 31, 2010, the Company had no cash equivalents.  7   PACIFIC BLUE ENERGY CORP. (A Development Stage Company) Notes to the Consolidated Financial Statements (Unaudited)   2. Summary of Significant Accounting Policies(continued)  e) Basic and Diluted Net Loss Per Share  The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.  f) Comprehensive Loss  ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2011 and December 31, 2010, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.  g) Financial Instruments  ASC 820, Fair Value Measurements,requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:  Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.  Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.  Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.  The Companys financial instruments consist principally of cash, accounts payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.  h) Property and Equipment  Property and equipment is comprised of a vehicle and is amortized on a straight-line basis over an expected useful life of three years. Maintenance and repairs are charged to expense as incurred. The land is not depreciated.  i) Impairment of Long-lived Assets  The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives at each balance sheet date.  The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed.  8   PACIFIC BLUE ENERGY CORP. (A Development Stage Company) Notes to the Consolidated Financial Statements (Unaudited)   2. Summary of Significant Accounting Policies (continued)  j) Recent Accounting Pronouncements  In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds.  The amendments in this Update are effective as of the beginning of a reporting entitys first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted.  The adoption of this standard did not have a material effect on the Companys consolidated financial statements.  In February 2010, the FASB issued ASU No. 2010-09 Subsequent Events (ASC Topic 855) Amendments to Certain Recognition and Disclosure Requirements (ASU No. 2010-09). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption of this standard did not have a material effect on the Companys consolidated financial statements.  In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis.  This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard did not have a material effect on the Companys consolidated financial statements.  In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend.  This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis.  The adoption of this standard did not have a significant impact on the Companys consolidated financial statements.  The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.  3. Acquisition of Ship Ahoy LLC  On April 5, 2010, the Company acquired a 100% interest in the outstanding members shares of Ship Ahoy LLC (Ship Ahoy), a limited liability company in Arizona, in exchange for $300,000 and 1,000,000 common shares of the Company.  The common shares issued to Ship Ahoy shareholders were determined to have a fair value of $710,636.  The purchase price was allocated to the following assets and liabilities:  $Purchase priceCash300,0001,000,000 common shares705,3781,005,378Fair value of Ship Ahoy net assetsCash and cash equivalents378Land591,000Interest in Sunshine Wind Park414,0001,005,378   9   PACIFIC BLUE ENERGY CORP. (A Development Stage Company) Notes to the Consolidated Financial Statements (Unaudited)   3. Acquisition of Ship Ahoy LLC (continued)  At December 31, 2010, the Company wrote off the interest in the Sunshine Wind Park of $414,000 due to lack of development of the property.  4. Prepaid Deposits  March 31,
2011
$December 31,
2010
$Insurance155,337209,088Legal25,50140,228Other4,787185,625249,316  5. Property and Equipment  Cost
$Accumulated
Depreciation
$March 31,
2011
Net Carrying
Value
$December 31,
2010
Net Carrying
Value
$Vehicle49,15812,28936,86940,965Land591,000591,000591,000640,15812,289627,869631,965  6. Loan Payable  In December 2010, the Company issued a note payable of $12,480 to a non-related party.  Under the terms of the agreement, the amounts are unsecured, due interest at 10% per annum, and due on demand.  As at March 31, 2011, the Company has recorded accrued interest of $308, which has been recorded in accounts payable and accrued liabilities.  7. Related Party Transactions  a) During the period ended March 31, 2011, the Company paid $30,000 (March 31, 2010 - $20,500) in management fees to the President and CEO of the Company.  b) As at March 31, 2011, the Company owes $nil (December 31, 2010 - $2,554) to the President and CEO of the Company.  The amounts owing are unsecured, non-interest bearing, and due on demand.  c) As at March 31, 2011, the Company owes $nil (December 31, 2010 - $9,428) to a director of the Company.  The amounts owing are unsecured, non-interest bearing, and due on demand.   10     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION  FORWARD-LOOKING STATEMENTS  This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.  RESULTS OF OPERATIONS  Working Capital  March 31,December 31,2011
$2010
$Current Assets432,469682,149Current Liabilities50,58243,499Working Capital (Deficit)381,887638,650  Cash Flows  March 31,
2011
$March 31,
2010
$Cash Flows from (used in) Operating Activities(174,007)(56,470)Cash Flows from (used in) Financing Activities(11,982)73,700Net Increase (decrease) in Cash During Period(185,989)17,230  Operating Revenues  We have not generated any revenues since inception.  Operating Expenses and Net Loss  Operating expenses for the three months ended March 31, 2011 were $260,595 compared with $54,307 for the three months ended March 31, 2010. The increase of $206,288 was attributed to the fact that the Company $109,716 of consulting costs, $32,759 of wages and benefits, and increases of $15,338 in professional fees and $64,879 of general and administrative costs during the current year.  During the three months ended March 31, 2011, the Company recorded a net loss of $260,859compared with a net loss of $54,307 for the three months ended March 31, 2010.    Liquidity and Capital Resources  As at March 31, 2011, the Companys cash balance was $246,844 and total current assets were $432,469 compared to cash of $432,833 and total current assets of $682,149 as at December 31, 2010. The decrease in cash and total current assets were attributed to the fact that the Company raised equity financing in 2010 and did not raise new equity financing during the current period.  11     As at March 31, 2011, the Company had total liabilities of $50,582 compared with total liabilities of $43,499 as at December 31, 2010. The increase in total liabilities of $7,083 is attributed to increases in accounts payable and accrued liabilities of $19,065 due to timing differences between the payment terms of various operating expenditures offset by the repayment of $11,982 of amounts owing to related parties.  As at March 31, 2011, the Company has a working capital of $381,887 compared with $638,650 at December 31, 2010 and the decrease in working capital is due to use of available cash for operating activity during the period.  Cashflow from Operating Activities  During the three months ended March 31, 2011, the Company used $174,007 of cash for operating activities compared to the use of $56,470 of cash for operating activities during the three months ended March 31, 2010.  The increase in the use of cash for operating activities was attributed to the fact that the Company paid for outstanding and current obligations with existing cash raised from previous equity and debt financing.  Cashflow from Financing Activities  During the three months ended March 31, 2011, the Company used proceeds of $11,982 from financing activities compared to receipt of $73,700 of financing from financing activities during the three months ended March 31, 2010. During the current period, the Company did not raise new financing and repaid $11,982 of amounts owing to related parties whereas in the prior year, the Company received $45,000 from the issuance of common shares and $28,700 from debt financing.  Quarterly Developments  Effective March 30, 2011, the Company terminated all agreements by and among the Company, Sonoran Trails, LLC ("Sonoran"), and Painted Rock, LLC (Painted Rock), relating to the Gila Bend project.  Going Concern  We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.  Off-Balance Sheet Arrangements  We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.  Future Financings  We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.  Critical Accounting Policies  Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.  12     Recently Issued Accounting Pronouncements  In March 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-11 (ASU No. 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entitys first fiscal quarter beginning after issuance of this Update. The Companys adoption of provisions of ASU No. 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.  In February 2010, the FASB issued ASU 2010-10 (ASU No. 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments in this Update are effective as of the beginning of a reporting entitys first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Companys adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.  In February 2010, the FASB issued ASU 2010-09 (ASU No. 2010-09), Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Companys adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.  In January 2010, the FASB issued ASU 2010-06 (ASU No. 2010-06), Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 amends FASB Accounting Standards Codification (ASC) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Companys adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.  In January 2010, the FASB issued an amendment to ASC Topic 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The Companys adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.  In January 2010, the FASB issued an amendment to ASC Topic 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Companys adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.  The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.  13     ITEM 4. CONTROLS AND PROCEDURES  Disclosure Controls and Procedures   We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.   We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2011. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting discussed below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.  Managements Report on Internal Control Over Financial Reporting  Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Companys internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of March 31, 2011, the Company determined that there were control deficiencies that constituted material weaknesses, as described below:  1.We do not have an Audit Committee or a financial expert on our Board of DirectorsCurrently, the Board of Directors acts in the capacity of the Audit Committee.  All members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities.  2.Reporting Deficiencies:  We did not maintain a sufficient level of expertise in our Company to oversee the reporting and disclosure of the financial statements and related footnotes, in compliance with generally accepted accounting principles and also in accordance with SEC disclosure requirements.   Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Companys internal controls.   In light of the material weaknesses discussed above, we engaged consultants to augment our reporting criteria and perform other post-closing procedures to ensure that our consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.   As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2011 based on criteria established in Internal ControlIntegrated Framework issued by COSO.  14     Continuing Remediation Efforts to address deficiencies in Companys Internal Control over Financial Reporting  Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:  1. Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors in fiscal 2011.  2. We will appoint additional personnel to assist with the preparation of the Companys monthly financial reporting, including preparation of the monthly bank reconciliations.  Changes In Internal Control and Financial Reporting  Our management, including our chief executive officer and chief financial officer, has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.  The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.  PART II - OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS  On August 20, 2010, the Alberta Securities Commission (ASC) issued an Interim Cease Trade Order (ICTO) against the Company and several other respondents, prohibiting the trading of the Companys securities in Alberta.  The ASC alleges that the Company breached section 93 of the Alberta Securities Act by directly or indirectly engaging in or participating in prohibited transactions in Alberta regarding the Companys securities.  Specifically, the ASC alleges that the Company knew or ought to have known that misleading or untrue statements were being made to investors promoting the securities of the Company.  The ICTO, initially set to expire on September 4, 2010, was initially extended until March 3, 2011 and more recently until August 25, 2011 while the ASC continues its investigation. The Company has issued a statement denying any wrongdoing.  Other than the foregoing, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.  ITEM 1A. RISK FACTORS  We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  1. Quarterly Issuances:  During the quarter, we did not issue any unregistered securities other than as previously disclosed.  2. Subsequent Issuances:  Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.  ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None.  ITEM 4. [REMOVED AND RESERVED]  15     ITEM 5. OTHER INFORMATION  On January 18, 2011, the Company terminated that certain Consulting Agreement (the Gordon Consulting Agreement) entered into by and between the Company and Yoram Gordon (Mr. Gordon) on July 29, 2010, pursuant to which Mr. Gordon was to offer business development services to the Company for a period of one (1) year in exchange for $2,500 cash per month.  On February 18, 2011, the Company entered into an Amendment of Clarification (the Amended Agreement) to amend, modify and clarify that certain Consulting Agreement (the Original Agreement) entered into with Bridge Partners, LLC dated on or about November 15, 2010.  The parties entered into the Amended Agreement to, among other things, reflect a new scope of Services and to amend and modify the fees due and owing to Consultant to a total fee of $7,250 for the performance of such services.  On March 1, 2011, the Company entered into a Consulting Agreement (the Consulting Agreement) with The Leading Insight Group, LLC (Leading Insight), pursuant to which Leading Insight shall offer consulting and project management services to the Company for an initial period of four (4) months in exchange for an aggregate fee, not to exceed $27,750, to be paid in accordance with an agreed upon payment schedule as set forth more fully in the Consulting Agreement.  On March 14, 2011, the Company executed an Unsecured Promissory Note (the Note) to Easiway Holdings (Easiway).  Under the terms of the Note, the Company has borrowed a total of $2,536.00 from Easiway, which accrues interest at an annual rate of 10% and is due on demand from Easiway.  The Note also contains customary events of default.  16     ITEM 6. EXHIBITS  ExhibitNumberDescription of ExhibitFiling3.01Articles of IncorporationFiled with the SEC on September 5, 2007 as part of our Registration Statement on Form 10SB.3.01aAmended and Restated Articles of IncorporationFiled with the SEC on October 29, 2009 as part of our Current Report on Form 8-K.3.02BylawsFiled with the SEC on September 5, 2007 as part of our Registration Statement on Form 10SB.10.01Product Sales Agreement between PBEC and Siliken Renewable Energy, Inc. dated December 7, 2009Filed with the SEC on December 11, 2009 as part of our Current Report on Form 8-K.10.02Office Lease Agreement between PBEC and University Business Center, LLC dated March 1, 2010Filed with the SEC on March 22, 2010 as part of our Current Report on Form 8-K.10.03Membership Interest Purchase Agreement between PBEC and Ship Ahoy, LLC dated April 5, 2010Filed with the SEC on April 8, 2010 as part of our Current Report on Form 8-K.10.04Promissory Note ($50,000) between PBEC and George M. Buckingham and Viki K. Buckingham, individually and on behalf of the George M. Buckingham and Viki K. Buckingham Family Limited Liability PartnershipFiled with the SEC on April 29, 2010 as part of our Amended Current Report on Form 8-K/A.10.05Promissory Note ($250,000) between PBEC and George M. Buckingham and Viki K. Buckingham, individually and on behalf of the George M. Buckingham and Viki K. Buckingham Family Limited Liability PartnershipFiled with the SEC on April 29, 2010 as part of our Amended Current Report on Form 8-K/A.10.06Joint Venture Agreement between PBEC and Patriot Solar Inc. dated May 10, 2010.Filed with the SEC on May 11, 2010 as part of our Current Report on Form 8-K.10.07Advisory Board Agreement between PBEC and Dale Gray dated July 6, 2010.Filed with the SEC on July 26, 2010 as part of our Current Report on Form 8-K.10.08Advisory Board Agreement between PBEC and Yoram Gordon dated July 14, 2010.Filed with the SEC on July 26, 2010 as part of our Current Report on Form 8-K.10.09Purchase and Sale Agreement between PBEC and Sonoran Trails, LLC dated July 16, 2010.Filed with the SEC on July 26, 2010 as part of our Current Report on Form 8-K.10.10Cooperation Agreement between PBEC and Siliken Renewable Energy, Inc. dated July 27, 2010.Filed with the SEC on July 29, 2010 as part of our Current Report on Form 8-K.10.11Advisory Board Agreement between PBEC and George Sagredos dated August 10, 2010.Filed with the SEC on August 17, 2010 as part of our Current Report on Form 8-K.10.12Consulting Agreement between PBEC and George Sagredos dated August 11, 2010.Filed with the SEC on August 17, 2010 as part of our Current Report on Form 8-K.10.13Consulting Agreement between PBEC and Yoram Gordon dated July 29, 2010.Filed with the SEC on August 17, 2010 as part of our Current Report on Form 8-K.10.14Amendment and Termination Agreement between PBEC, Sonoran Trails, LLC and Painted Rock, LLC, dated September 10, 2010Filed with the SEC on September 24, 2010 as part of our Current Report on Form 8-K.10.15Amendment of Clarification between PBEC and Bridge Partners, LLC dated February 18, 2011Filed herewith.10.16Consulting Agreement between PBEC and The Leading Insight Group, LLC dated March 1, 2011Filed herewith.10.17Promissory Note between PBEC and Easiway Holdings dated March 14, 2011Filed herewith.14.01Code of EthicsFiled with the SEC on December 9, 2009 as part of our Current Report on Form 8-K.31.01Certification of Principal Executive Officer Pursuant to Rule 13a-14Filed herewith.31.02Certification of Principal Financial Officer Pursuant to Rule 13a-14Filed herewith.32.01CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley ActFiled herewith.   17     SIGNATURES  In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  PACIFIC BLUE ENERGY CORP.Dated: May 16, 2011By: /s/ Joel FranklinBy:  Joel FranklinIts:  President, Chief Executive Officer, Chief Executive Officer, Secretary and Treasurer  In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.  Dated:  May 16, 2011/s/ Joel FranklinBy:  Joel Franklin
Its:  DirectorDated:  May 16, 2011/s/ Luniel de BeerBy:  Luniel de Beer
Its:  Director     18