UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K




[X]
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended  March 31, 2008[  ]
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from _________ to ________Commission
      file number:333-140438
 
 Blue Earth Solutions,
      Inc.(Exact
      name of registrant as specified in its charter)Nevada
              26-1909139(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)13511 Granville Ave.
      Clermont, FL
              34711(Address
      of principal executive offices)
              (Zip
      Code)Registrant’s
      telephone number:  352-729-0150
  Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
              Name
      of each exchange on which registerednone
              not applicableSecurities
      registered under Section 12(g) of the Exchange Act:Title
      of each class
              Name
      of each exchange on which registerednone
              not applicable


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 if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act. Yes X  No 




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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K 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 to this Form 10-K. 




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act. (Check one):





Large
accelerated filer      Accelerated
filer   Non-accelerated filer    Smaller
Reporting Company X





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





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter:  N/A





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date – 24,134,300 as of June 9,
2008.





Documents
Incorporated by Reference: None.
  Table of Contents




TABLE OF
CONTENTS





PagePART
      IItem 1.
              Business
              3Item 2.
              Properties
              11Item 3.
              Legal Proceedings
              11Item 4.
              Submission of Matters to a Vote of Security
      Holders
              11PART
      IIItem 5.
              Market for Registrant’s Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities
              12Item 7.
              Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
              14Item 8.
              Financial Statements and Supplementary Data
              21Item 9.
              Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
              22Item 9A.
              Controls and Procedures
              22Item 9B.
              Other Information
              22PART
      IIIItem 10.
              Directors, Executive Officers, Promoters and Corporate
      Governance
              23Item 11.
              Executive Compensation
              26Item 12.
              Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
              29Item 13.
              Certain Relationships and Related Transactions, and Director
      Independence
              30Item 14.
              Principal Accountant Fees and Services
              30PART
      IVItem 15.
              Exhibits
              30




2
 Table of Contents





PART I


Item 1.   Business





Business
Development





We were
incorporated on March 28, 2006 as RM Health International, Inc., a Nevada
corporation, and we have conducted business under the name “R&M Online
Health.” We have been providing an education resource and online purchase
facility to the public through our website, www.rmhealthonline.com (our “Site”).
Subsequent to end of the reporting period, on May 16, 2008, we entered into an
Agreement and Plan of Merger (the “Merger Agreement”) with Blue Earth Solutions,
Inc., a privately held Delaware corporation (“Blue Earth Delaware”), and Blue
Earth Acquisition, Inc. (“Acquisition Sub”), our newly formed wholly-owned
Nevada subsidiary. In connection with the closing of this merger transaction,
Blue Earth Delaware merged with and into Acquisition Sub (the “Merger”) on May
16, 2008, with the filing of articles of merger with the Nevada and Delaware
secretaries of state.  Subsequently, on May 16, 2008, we merged with
our Acquisition Sub in a short-form merger transaction under Nevada law in which
we were the surviving entity and, in connection with this short form merger,
changed our name to Blue Earth Solutions, Inc., effective May 16,
2008.





In
addition, pursuant to the terms and conditions of the Merger
Agreement:





·  Each
share of Blue Earth Delaware common stock issued and outstanding immediately
prior to the closing of the Merger was converted into the right to receive three
shares of our common stock. As a result, the shareholders of Blue Earth Delaware
received 21,000,000 newly issued shares of our common stock.





·  Each
share of Blue Earth Delaware Series A Preferred Stock issued and outstanding
immediately prior to the closing of the Merger was converted into the right to
receive one share of our newly created Series A Preferred Stock. As a result,
the Series A Preferred shareholders of Blue Earth Delaware received 400,000
newly issued shares of our Series A Preferred Stock.





·  Each
share of Blue Earth Delaware Series B Preferred Stock issued and outstanding
immediately prior to the closing of the Merger was converted into the right to
receive one share of our newly created Series B Preferred Stock. As a result,
the Series B Preferred shareholders of Blue Earth Delaware received 80,500 newly
issued shares of our Series B Preferred Stock.





·  Following
the closing of the merger, in a separate transaction, our former Chief Executive
Officer and sole director agreed to cancel and return all 3,200,000 shares of
his common stock into treasury.





·  As a
result, following these events, there were 24,559,300 shares of our common
stock, 400,000 shares of our Series A Preferred Stock, and 80,500 shares of our
Series B Preferred Stock issued and outstanding.




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·  Our board
of directors was reconstituted to consist of Patricia Cohen, Paul Slusarczyk,
Sharon Slusarczyk, and Harvey Katz, who prior to the Merger were the directors
of Blue Earth Delaware.





·  Blue
Earth Delaware provided customary representations and warranties and closing
conditions, including approval of the Merger its voting
stockholders.





As of May
16, 2008 and currently, there are no material relationships between us or any of
our affiliates and Blue Earth Delaware, other than in respect of the Merger
Agreement.





The
foregoing description of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Merger
Agreement, which is filed as Exhibit 2.1 with the report filed on form 8-K on
May 16, 2008, and to the certificates of designation for our Series A and Series
B Preferred Stock, which are filed as Exhibits 4.1 and 4.2 with the report filed
on form 8-K on May 16, 2008, respectively.





As a
consequence of the Merger, we will no longer pursue the development of our Site
and have already assigned these assets to our former president who has agreed to
indemnify us against any related liabilities.  We will be continuing
the business of Blue Earth Delaware as our sole business going
forward.  We have not yet commenced recycling operations.





As a
result of the Merger, we now own and will pursue as our primary line of business
the development and commercialization of the StyroSolveTM system, a closed-loop
process for collecting and recycling polystyrene foam products (our “Process”),
as well as StyroSolveTM, a proprietary solvent (our “Solvent”) used in the
Process to reduce expanded polystyrene to a gel. Blue Earth Delaware was
incorporated in Delaware on February 5, 2008.  Blue Earth Delaware
acquired the Process, the Solvent, and other intellectual property by purchasing
certain assets of International Foam Solutions, Inc.; Trans Global Chemical,
LLC; Parliament Holdings, LLC; Parliament Consulting, LLC; Harvey Katz; Claudia
Iovino; and Nicholas Iovino, including the referenced intellectual property on
February 14, 2008 and February 25, 2008. Our business is to develop and market a
practical, economical and environmentally safe means of disposing of and
recycling certain polystyrene products. We now conduct operations from the
former headquarters of Blue Earth Delaware, located at 13511 Granville Ave.,
Clermont, FL, 34711.





Description
of Business





Overview





As a
result of the Merger, which was consummated subsequent to the end of the current
reporting period, we are now primarily engaged in the business of implementing
and marketing a practical, economical and safe means of recycling polystyrene
foam, also known as Expanded Polystyrene (“EPS”).  We own the
StyroSolveTM system which is a closed-loop process for collecting and recycling
EPS foam products. A closed-loop recycling process is one in which all or nearly
all of the recycled products are recovered in a marketable form during the
process.





Our
emphasis is on recycling EPS products. Because they tend to be bulky, cumbersome
and




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generally
difficult to discard, few other companies are pursuing the recycling of these
products as their business plan. We believe that, compared with existing methods
of recycling EPS, including heating EPS to its melting point, our Process
provides a greater economic return and a more complete and ecologically-friendly
strategy for addressing EPS recycling.





Polystyrene





Polystyrene
is a lightweight plastic material derived from petroleum and natural gas
products with a chemical structure consisting of a long chain hydrocarbon with
every other carbon connected to a Phenyl group.  Polystyrene is
produced in two varieties:  (1) an expanded polystyrene variety, also
known as foam, typically used in the packaging and insulation industries, and
(2) a non-expanded (non-foam) variety, used for making a wide variety of hard
plastic products, from utensils to toner cartridges.





Expanded
Polystyrene, or EPS, is the correct name for polystyrene foam (EPS is sometimes
incorrectly called StyrofoamTM, which is a separate product and a trademark of
Dow Chemical Company). EPS is produced from a mixture of about 90-95%
polystyrene and 5-10% gaseous blowing agent, most commonly pentane or carbon
dioxide. Foam is used in packaging, including end caps, and other items such as
architectural structures (i.e. columns, moldings and forms), seedling trays,
cups, bowls, plates, trays, “clamshell” containers, egg cartons and other food
services related products. EPS also has various military applications for
ammunition, aircraft, and thousands of other items.





The
non-foam variety of polystyrene is commonly used for plastic utensils and
cutlery, yogurt and cottage cheese containers, clear “clamshell” containers used
for salad bar take-out and various manufactured goods including appliances,
toys, video cassettes, DVD Cases, tools, computer casings, razors, desk
accessories and furniture.





Since
both the expanded and non-expanded varieties of polystyrene are comprised of the
same chemical materials, they may be treated collectively during the recycling
process. The primary difference in the two varieties lies in the volume of space
required by the foam version prior to reduction.





Polystyrene
products are popular because they are:





·
            Sturdy,
      rigid and lightweight, making them easier than most alternatives to
      transport.


·
            Energy
      efficient, requiring much less energy in production compared to competing
      products.


·
            Excellent
      insulation, resisting temperature change and making hot or cold items
      easier to handle.


·
            Sanitary,
      preventing the growth and spread of bacteria in comparison to reusable
      plates and utensils.


·
            Economical,
      costing considerably less than alternative
  materials.


·
            Inert
      – they will not leech chemicals into the water supply if placed in a
      landfill.




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The
polystyrene production industry is populated by the large chemical companies
that produce polystyrene components. Currently Dow Chemical, Huntsman, and
Tenneco (a subsidiary of Paper Corporation of America) are the largest
manufacturers of polystyrene products. Tenneco, the latest market entrant,
gained its industry presence through the acquisition of the polystyrene
divisions of former competitors including Exxon, Mobil Oil and Amoco
Oil.





EPS
Recycling





The
polystyrene market in the United States and China is significant, as is the
potential market for polystyrene recycling.  Approximately 1.2% of the
30 billion pounds of polystyrene produced each year is recycled. Over 50% of
China’s EPS is exported to the US market as packaging material. EPS is generally
considered the most commonly used packaging material both nationally and
internationally.  However, EPS’s uncommonly high volume to weight
ratio – a relatively small amount of EPS by weight occupies a very large volume
when put into landfills – results in EPS accounting for the largest volume of
waste polystyrene.  Consequently, companies and facilities managers
must pay proportionally higher transport costs for the hauling of EPS from trash
cans and dumpsters to landfills due to its bulk.





While
there are a myriad of applications for polystyrene, there has historically been
no economical way to transport and recycle the material.  This lack of
reusability has become a major focus and concern for a rising population of
environmentally conscious individuals, corporations, and
governments.  Cities such as San Francisco and Berkeley, California
have even instituted bans on EPS as packaging material for food
products.





Polystyrene
recycling is currently a small, fractured market, and competition in the field
is varied.  There are several companies that are currently recycling
polystyrene.  There are two primary challenges associated with
handling EPS:  first, transportation costs are high because of the
high volume to weight ratio of EPS, and second, EPS must be extremely clean to
be accepted by an EPS recycling plant.





EPS
recycling has been available for years, but has had low penetration due to the
absence of a clear solution to the above-referenced challenges. Our
solvent-based approach to EPS recycling is unique to the industry. Other
approaches to EPS recycling include the following:





·
            Melting
      – There are machines that melt the EPS in order to reduce its volume.
      While this technique does reduce volume effectively, it requires a very
      high temperature (between 400 and 500 degrees Fahrenheit) to melt
      polystyrene, making this method costly.  Also, because the high
      temperature changes the chemical structure of the polystyrene, the
      resulting product cannot be recaptured as a polystyrene
      bead.  Instead, heat-reduced bricks are created, which have
      limited uses and are thus less economically
  viable.


·
            Shredding
      – Some recyclers shred EPS upon collection, which in most cases increases
      the volume, as greater surface area is created and the EPS is “fluffed” or
      aerated.  This method involves grinding, washing, fluffing and
      drying EPS before sending the shredded EPS through an extruder. In order
      to use this technology, the polystyrene has to be completely clean
      initially, so normal post-consumer and industrial waste EPS cannot be
      recycled using this method.




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·
            Compacting
      – Another technique used at the front end of the recycling process is
      compacting.  Machines compress EPS under high pressure and bale
      it for transport.  This process removes much, but not all, of
      the air in EPS. Resulting in approximately 50% reduction, this method is
      less volume-efficient than melting, but retains the EPS’s chemical
      composition.  The bales are wrapped with wire under high
      pressure, which can be dangerous to operators when a bale is released or
      broken.




Our
StyroSolveTM EPS Recycling System





Our
StyroSolveTM system for recycling EPS is a complete polystyrene recycling process
utilizing StyroSolveTM, our safe, environmentally-friendly solvent. Scrap EPS is
inserted into the StyroSolve ReducerTM (the “Reducer”), consisting of a chipper
that shreds the EPS into small pieces and blows them into a tank, which has been
half filled with Solvent. When the EPS mixes with the Solvent, the EPS’s volume
is reduced by as much as 95%. The resulting reduced EPS substance is called
PolygelTM (“Gel”). The Gel is heavier than the solvent and falls to the bottom of
the tank, leaving the Solvent on the top of the tank to contact and mix with
additional EPS chips as they are added.





As EPS is
continually added to the tank, the amount of Gel in the tank increases, and the
amount of Solvent in the tank decreases. Eventually, the tank is completely
filled with Gel, at which time the Gel may be transferred to the StyroSolve
ExtruderTM (the “Extruder”). The Extruder is a system located in a centralized
recycling plant, or processing center, which takes Gel as input, filters out
impurities, and separates it into its primary component
products:  polystyrene pellets (“Pellets”) and Solvent, both ready to
be reused. This closed-loop system filters out contaminates and recaptures over
98% of the Solvent used to create the Gel.





When Gel
is pumped from a tank into the Extruder, it is heated in order to decrease the
viscosity of the Gel, allowing for movement through the system without undue
strain on the pumps. The Gel then passes through a series of filters that filter
out increasingly smaller impurities. This filtration process is what allows us
to accept contaminated EPS as recycling input. Once impurities have been
filtered from the Gel, the Gel is pumped through a flash tank where gasses are
extracted from the mixture. These gasses include the Solvent in its gaseous
state. The Solvent is recaptured here and at other vents in the process through
distillation and condensation of the gaseous solvent until it returns to its
liquid state.





After the
initial flash extraction, which removes approximately 50% of the Solvent from
the Gel, the thickened Gel enters the Extruder’s mechanical section and is
driven forward by twin screws through the barrel of the mechanical section, a
metal tube running down the center of the length of the mechanical section. The
twin screws serve to move the thickened Gel through the barrel, further mix the
Gel, and release small pockets of gasses in the mixture. At several points along
the mechanical section, the barrel has vents through which these gasses (both
Solvent in its gaseous state and gases from the original EPS manufacturing
process) can escape into a condenser, which will recover more of the constituent
Solvent. After passing through these flash extraction points, 98.5% of the
Solvent has been distilled, condensed, and recaptured; 1.5% of




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the
Solvent has been lost to leakage or evaporation; all of the impurities have been
removed; and the remaining Gel is 100% polystyrene. The twin drives push the
Polystyrene through a pelletizer at the end of the mechanical section of the
Extruder. The end plate on the pelletizer has sixteen small holes through which
the polystyrene is pushed into cold water. The resulting pellets are of the same
quality and chemical composition as polystyrene pellets formed in the original
polystyrene manufacturing process.





We have
tested our process for recycling expanded polystyrene only on a small scale in a
laboratory environment. We have not tested or utilized this process on a large,
commercial scale as described above, utilizing chippers, Tanks, and Extruders.
Because we have not yet tested or conducted operations on a commercial scale, we
cannot predict technical, operational, or business challenges that may arise as
we commence recycling operations on a commercial scale, using large-scale
equipment, as described above. We may or may not be able to overcome the
challenges that arise and conduct operations successfully on a scale necessary
to achieve profitable operations. Thus, this process must be considered unproven
technology.





Other
Products





In
addition to the products and processes we own relating to the recycling of
polystyrene, we acquired the rights to six additional products as part of our
acquisition of certain assets of International Foam Solutions, Inc.; Trans
Global Chemical, LLC; Parliament Holdings, LLC; Parliament Consulting, LLC;
Harvey Katz; Claudia Iovino; and Nicholas Iovino on February 14 and 25,
2008.  We do not anticipate that the production and sale of these
products will be significant in comparison to our polystyrene recycling
operations.  Each of these products has been produced, marketed, and
distributed on a very limited basis only to date, and include:





·
            Tire
      Muscle®.  Tire Muscle® is a tire-sealing product designed for
      large vehicles, such as concrete trucks, eighteen wheelers, and other
      construction vehicles that are likely to drive in areas where nails,
      rebar, and other tire hazards exist.  Tire Muscle® can seal a
      hole in a tire up to three-eighths of an inch in
  diameter.


·
            Dumpster
      EaseTM and Diaper EaseTM consist of a single proprietary formulation that
      helps to remove odors in garbage containers, restaurant kitchens, diaper
      pails and other industrial and residential locations where smells can
      gather.


·
            Nu-Silver,
      Nu-Brass, and Nu-Chrome are proprietary chemical products designed for the
      polishing and renewal of silver, brass, and
  chrome.





Strategy





We have
not yet commenced recycling operations.  We intend to recycle EPS and
sell the resulting polystyrene pellets to the plastics manufacturing industry
for the production of a wide variety of polystyrene products as our primary line
of business.





Competition





Competition
in the field of polystyrene recycling is not intense at this point, but may
increase in the future. Our goal is to collect used EPS, recycle the EPS, and
sell the resulting polystyrene




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pellets,
activities in which we may experience significant competition from other
polystyrene recycling companies, or from polystyrene manufacturing companies. At
this time, we are not aware of any other commercial entity that is researching
or developing techniques for the recycling of polystyrene utilizing methods
similar to ours. Different methods of polystyrene recycling are being used in a
variety of other applications. The following are polystyrene recycling companies
known to us.





·
            Demand Foam Cutting
      Systems sells a foam densifier that reduces waste foam by grinding
      and then melting foam into a recyclable patty polystyrene that is
      1/80th
      the volume of the original scrap foam. The resulting plastic patty has
      limited uses when recycled, however, because the heat used in the
      reduction changes the chemical properties of the EPS. They also sell a
      product called the Foam GobblerTMthat grinds EPS foam into fine pieces 1/4" or less using opposing,
      rotating knife drums. This allows for easier disposal or re-use of EPS as
      a filler, but does not recycle the
EPS.


·
            Dart operates EPS foam
      recycling centers at their production facilities in Michigan,
      Pennsylvania, Florida, and Ontario, Canada, capable of reprocessing 12
      million pounds of foam products annually. All four facilities have
      accepted material for recycling from the public since 1990. The company
      claims their engineers invented "a state-of-the-art process for washing
      and drying used foam foodservice products." This is significant as
      traditional methods of recycling EPS (heat and pressure) have been limited
      to use with very clean EPS. Their four plants receive foam from local
      schools, community recyclers, supermarkets, hospitals, manufacturing
      plants, cafeterias, and individuals, then sell their recycled polystyrene
      in the form of polystyrene pellets to manufacturers who reprocess it into
      useful products. Dart also utilizes heat and pressure in their recycling
      process, however, incurring greater energy costs in their recycling
      process and limiting the utility of their final
  product.


·
            The CyberYard.com/Memphis Foam
      Recycling offers Midsouth manufacturers and distributors a way to
      cost-effectively dispose of their surplus or used EPS.  The
      company will pick up the material on a scheduled or on-demand basis and
      recycle it locally.  They retrieve and densify white, homogenous
      EPS and then supply the material to nationwide manufacturers for
      reuse.  They maintain EPS recycling facilities that can
      accommodate large quantities of material on a long-term
    basis.





Intellectual
Property





Prior to
the Merger, our only intellectual property consisted of our Site.  As
a consequence of the Merger, we will no longer pursue the development of our
Site and have assigned these assets to our former president who has agreed to
indemnify us against any related liabilities.





All of
our intellectual property was obtained as a consequence of the
Merger.  On February 14, 2008, Blue Earth Delaware, our accounting and
operational predecessor, purchased technology and formulas protected by U.S.
Patent #5,223,543 #6,743,828 B1, # 7,241,858 B2 and #7321,003 B2. The patents
cover the EPS recycling process used by the StyroSolve system. These systems are
marketed under the StyroSolve TM brand name, which is also owned by
us.





We also
intend to file patent applications for the key technologies underlying our six
other products which we have acquired, specifically Tire Muscle®, Dumpster
EaseTM, Diaper EaseTM, Nu-Silver, Nu-Brass, and Nu-Chrome.





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We intend
to aggressively assert our rights under trade secret, unfair competition,
trademark and copyright laws to protect our intellectual property, including
product formulas, proprietary manufacturing processes and technologies, product
research and concepts, and recognized trademarks. These rights are protected
through the acquisition of patents and trademark registrations, the maintenance
of trade secrets, the development of trade dress, and, where appropriate,
litigation against those who are, in our opinion, infringing these
rights.





We are
currently consulting with law firms to protect our brand names and product
designs. While there can be no assurance that registered trademarks will protect
our proprietary information, we intend to assert our intellectual property
rights against any infringer. Although any assertion of our rights can result in
a substantial cost to, and diversion of effort by, our company, management
believes that the protection of our intellectual property rights is a key
component of our operating strategy.





Employees





Prior to
the Merger, our only employee was our sole officer and director, Randy Weston,
who has resigned all positions with us effective upon the Merger on May 16,
2008.  Following the Merger, we have seven full-time employees,
including management, administrative support, research staff, and operational
personnel. None of our employees are covered by a collective bargaining
agreement. We have employment agreements in place for our CEO and corporate
secretary, Patricia Cohen; our President and CFO, Paul Slusarczyk; our Senior
Director of Research and Development, Harvey Katz; and our Director of Research
and Development, Claudia Iovino. We also have a written consulting agreement in
place with Richard Iantosca, a chemical specialist whereby we have agreed to pay
Mr. Iantosca $3,000 per month in exchange for scientific consulting
services.





Governmental
Regulation





With the
exception of the environmental laws noted below, we are unaware of and do not
anticipate having to expend significant resources to comply with any
governmental regulations of the recycling industry. We are subject to the laws
and regulations of those jurisdictions in which we plan to sell our product,
which are generally applicable to business operations, such as business
licensing requirements, income taxes and payroll taxes. In general, the
collection, recycling, and sale of polystyrene in the United States is not
subject to special regulatory and/or supervisory requirements.





Compliance
with Environmental Laws





Our
business may be subject, in certain instances, to supervision and regulation by
state and federal governmental authorities, specifically the U.S. Environmental
Protection Agency (“EPA”) and state counterparts. We will comply with all EPA
and other requirements for receiving and mixing chemicals and intend to comply
with all future regulations and requirements.





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Research
and Development Expenditures





We have
not incurred any research or development expenditures since our
incorporation.





Subsidiaries





We
currently do not have any subsidiaries.





Item 2.   Properties





As a
result of the Merger, which was consummated subsequent to the end of the
reporting period, we now conduct our operations from our principal office
located at 13511 Granville Ave., Clermont, FL, 34711. We lease approximately
11,000 square feet of space for our principal offices and our initial processing
center in Clermont, Florida. The lease on this facility, which is filed as
Exhibit 10.7 with the report filed on form 8-K on May 16, 2008, indicates that
we will make monthly payments of $7,583.33 each month for the first year of the
lease, and monthly payments of $9.916.67 each month for years two through five
of the lease, at which time the lease will expire. We also lease approximately
5,000 square feet in Del Ray Beach, Florida, for our initial transfer station.
We are subleasing this facility from Parliament Holdings, LLC, on a
month-to-month basis through an oral agreement with the landlord whereby we pay
$4,636.50 per month to lease the facility.





We have
not yet commenced our recycling operations, and we do not own or lease any other
significant property.





Item 3.   Legal Proceedings





We are
not a party to any pending legal proceedings where any officer, director,
affiliate of owner of 5% or more of our common stock is adverse to us or where
the amount of damages claimed, exclusive of interest and costs, exceeds ten
percent of our current assets. Pursuant to the terms of the Merger,
responsibility for any liability emerging from our pre-merger business relies
wholly with our pre-merger management.





Item 4.   Submission of Matters to a Vote of Security
Holders





No
matters were submitted to a vote of the Company's shareholders during the
quarter ended March 31, 2008.




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 Table of Contents




PART II





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





Market
Information





Our
authorized capital stock consists of 74,500,000 shares of common stock, $0.001
par value per share, and 500,000 shares of preferred stock, $0.001 par value per
share. Immediately following the Merger on May 16, 2008, there were 24,559,300
shares of our common stock, 400,000 shares of our Series A Preferred Stock, and
80,500 shares of our Series B Preferred Stock issued and
outstanding.





Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by the FINRA. The OTCBB is a network of security dealers who buy and
sell stock. The dealers are connected by a computer network that provides
information on current "bids" and "asks", as well as volume information. As of
May 16, 2008, our shares were quoted on the OTCBB under the symbol “RMHL.” We
anticipate that our symbol will change in the near future as a result of the
change in the Company’s name to “Blue Earth Solutions, Inc.”





The
following table sets forth the range of high and low bid quotations for our
common stock for each of the periods indicated as reported by the OTCBB. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.





Fiscal
      Year Ending March 31, 2008Quarter
      Ended
            High
      $
            Low
      $March
      31, 2008
            0
            0December
      31, 2007
            0
            0September
      30, 2007
            0
            0June
      30, 2007
            0
            0Quarter
      Ended
            High
      $
            Low
      $March
      31, 2007
            0
            0December
      31, 2006
            0
            0September
      30, 2006
            0
            0June
      30, 2006
            0
            0





Holders
of Our Common Stock





As of
June 9, 2008, we had 24,134,300 shares of our common stock issued and
outstanding, held by 84 shareholders of record.




12
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Dividends





The
Company has not declared, or paid, any cash dividends since inception and does
not anticipate declaring or paying a cash dividend for the foreseeable
future.





Nevada
law prohibits our board from declaring or paying a dividend where, after giving
effect to such a dividend, (i) we would not be able to pay our debts as they
came due in the ordinary course of our business, or (ii) our total assets would
be less than the sum of our total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time of distribution, to
satisfy the rights of any creditors or preferred stockholders.





Securities
Authorized for Issuance Under Equity Compensation Plans





Equity
      Compensation Plan Information
              As
      of March 31, 2008Plan
      category
            Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              
              (a)
            Weighted-average
      exercise price of outstanding options, warrants and rights
              
              (b)
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              
              (c)Equity
      compensation plans approved by security holdersEquity
      compensation plans not approved by security holdersTotal
            0
            0
            0




(a)
            No
      stock rights exist at March 31,
2008


(b)
            No
      stock rights exist at March 31,
2008


(c)
            No
      stock rights exist at March 31,
2008




13
 Table of Contents




Item 7.  Management’s Discussion and Analysis of Financial
Condition and Results of Operations





Forward-Looking
Statements





This
Annual Report contains forward-looking statements, as defined in the Private
Securities Litigation Reform Act of 1995. To the extent that any statements made
in this Report contain information that is not historical, these statements are
essentially forward-looking. Forward-looking statements can be identified by the
use of words such as “expects,” “plans,” “will,” “may,” “anticipates,”
believes,” “should,” “intends,” “estimates,” and other words of similar meaning.
These statements are subject to risks and uncertainties that cannot be predicted
or quantified and, consequently, actual results may differ materially from those
expressed or implied by such forward-looking statements. Such risks and
uncertainties include, without limitation:





·
         Our limited and unprofitable operating
    history;


·
         the ability to raise additional capital to finance our
      activities;


·
         legal and regulatory risks associated with the
      Merger;


·
         the future trading of our common
  stock;


·
         our ability to operate as a public
  company;


·
         general economic and business
  conditions;


·
         the volatility of our operating results and financial
      condition; and


·
            our
      ability to attract or retain qualified senior scientific and management
      personnel.





The
foregoing factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included in this
Annual Report on Form 10-K.





Information
regarding market and industry statistics contained in this Report is included
based on information available to us that we believe is accurate. It is
generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis. We have not reviewed or
included data from all sources, and cannot assure investors of the accuracy or
completeness of the data included in this Report. Forecasts and other
forward-looking information obtained from these sources are subject to the same
qualifications and the additional uncertainties accompanying any estimates of
future market size, revenue and market acceptance of products and services. We
do not undertake any obligation to publicly update any forward-looking
statements. As a result, investors should not place undue reliance on these
forward-looking statements.





Liquidity
and Capital Resources





As of
March 31, 2008, our accounting predecessor, Blue Earth Delaware, had Current
Assets in the amount of $15,150, consisting entirely of Cash and Cash
Equivalents. As of March 31, 2008, Blue Earth Delaware had Current Liabilities
in the amount of $200,000, consisting of entirely of Notes Payable to Related
Parties. This combination of assets and liabilities results in working capital
deficit in the amount of $184,850 for Blue Earth Delaware as of March 31,
2008.





14
 Table of Contents




As of
March 31, 2008, our Unaudited Condensed Combined Pro-Forma Balance Sheet
indicates that we had Combined Current Assets of $26,500, Combined Current
Liabilities of $212,910, and a Combined Working Capital Deficit of
$186,410.





Blue
Earth Delaware (our accounting predecessor) closed a private offering on May 8,
2008, subsequent to the preparation of the March 31, 2008 financials, in which
it raised $805,000 through the sale of 80,500 shares of its Series B Preferred
Stock. We believe that the funds raised through this offering are sufficient for
us to open our initial processing center and transfer station and begin
operations on a limited basis – with fewer than the optimum number of Tanks,
Trailers, and Trucks, with an intention to raise an additional $4 million during
the next twelve months in order to provide us with the resources to increase our
level of operations and execute on our long-term expansion plan.  We
do not presently have sufficient capital to fully proceed with the expansion
phase of our business plan.  In connection with raising this
additional capital, we will incur appropriate accounting and legal
fees.





Results
of Operations





Our
accounting predecessor, Blue Earth Delaware, generated no revenue for the period
from inception (February 5, 2008) through March 31, 2008. During the same
period, Blue Earth Delaware incurred operating expenses in the amount of $4,583.
Blue Earth Delaware’s total net loss for the period from inception (February 5,
2008) through March 31, 2008 was $4,583.





Our
Unaudited Condensed Combined Pro-Forma Statement of Operations indicates that we
generated no Revenue for the three months ended March 31, 2008. During the same
period, we recorded combined Operating Expenses of $7,380, resulting in a
Combined Net Loss of $7,380 for the three months ended March 31,
2008.





Off
Balance Sheet Arrangements





As of
March 31, 2008, there were no off balance sheet arrangements.








Plan
of Operation





THE
FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN
THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS CURRENT
REPORT.





The
following discussion reflects our plan of operation. This discussion should be
read in conjunction with the audited financial statements of Blue Earth Delaware
for the fiscal year ended March 31, 2008. This discussion contains
forward-looking statements, within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, including
statements regarding our expected financial position, business and financing
plans. These statements involve risks and uncertainties. Our actual results
could differ materially from




15
 Table of Contents




the
results described in or implied by these forward-looking statements as a result
of various factors, including those discussed below and elsewhere in this
Current Report, particularly under the headings “Forward Looking Statements” and
“Risk Factors.”





Overview





As a
result of the Merger, which occurred subsequent to the end of the reporting
period, we are now primarily engaged in the business of implementing and
marketing a practical, economical and safe means of recycling EPS.  We
own the StyroSolveTM solvent and the StyroSolveTM system, both of which are
necessary to implement our Process for recycling EPS. We intend to collect scrap
EPS from a variety of locations, reduce it to Gel at our transfer stations, and
transport it to our processing centers where it will be converted into Pellets
and sold.





Business
of Blue Earth





We intend
to generate revenues primarily by selling recycled EPS in the form of
polystyrene pellets to manufacturers of polystyrene products. In addition, we
may receive fees from some recycling customers to collect their EPS waste. We
have not yet commenced recycling operations.





EPS
Collection and Processing - Hubs and Spokes





We intend
to use a hub and spoke operational structure for the collection and processing
of EPS. The hubs will be processing centers that will contain one or more
Extruders for the processing of Gel into Pellets and Solvent. The spokes will be
transfer stations, which will collect and process EPS into Gel both on site and
through mobile processing trucks. We have leased a facility in Clermont,
Florida, which we intend to utilize as a processing center. The lease on this
facility, which is filed as Exhibit 10.7 with the report filed on form 8-K on
May 16, 2008, indicates that we will make monthly payments of $7,583.33 each
month for the first year of the lease, and monthly payments of $9.916.67 each
month for years two through five of the lease, at which time the lease will
expire. We have also leased a facility in Del Ray Beach, Florida, which we
intend to use as a transfer station.  We are subleasing this facility
from Parliament Holdings, LLC, on a month-to-month basis through an oral
agreement with the landlord whereby we pay $4,636.50 per month to lease the
facility.





We intend
to purchase or lease two trucks with 2,000 – 3,000 gallon tanks (the “Trucks”),
two 7,500 gallon tanker trailers that connect to semi diesel cabs (the
“Trailers”), and two 5,000 – 16,000 gallon storage tanks (the “Tanks”) for each
transfer station. The Trucks will be used to travel to pickup locations within
100 miles of the transfer facility. We intend to schedule pickups of EPS with
companies who have a specific need as well as regular pickups from recycling
containers we intend to place with businesses as well as at a variety of public
locations.  The Trucks will leave the transfer station with their
tanks half filled with solvent. At each pickup location, the Truck driver will
set up the EPS chopper and feed scrap EPS into the chopper, which will blow
chopped EPS into the top of the Truck’s tank where it will be converted into Gel
as described earlier in this Report. Each Truck will then travel to its next
pickup location. The agitation that will naturally occur from driving a
half-full tank around will expose more of the surface area of the EPS to the
solvent, thus aiding in the conversion of the EPS to Gel.




16
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At the
end of the work day, the Trucks will return to the transfer station and pump the
EPS they have collected as Gel into one of the Trailers. Between three and six
days per week, depending upon how quickly the Trailer fills, a diesel cab will
bring Trailer of Solvent from the processing center to the transfer station and
will then take a Trailer full or nearly full of Gel from the transfer station to
the processing center. The Gel from the Trailer will be transformed at the
processing center into Solvent and Pellets through the Extrusion Process as
discussed in the Description of Business section above. At the transfer station,
the Solvent will be pumped from the Trailer into the Trucks and, if necessary,
one of the Tanks. When the Trailer is empty of Solvent, it will be filled with
Gel from Trucks and hauled back to the processing center where the process will
begin again. Because the Solvent is a component of the Gel, there’s no concern
with cross-contamination and no need to clean the Trailers, Trucks, or Tanks
when their contents change between Solvent and Gel.





As
indicated previously, we have performed this process only on a small scale in a
laboratory environment. We have not tested this process on a large, commercial
scale as described above. Because we have not yet conducted operations on a
commercial scale, we cannot predict technical, operational, or business
challenges that may arise as we commence recycling operations on a commercial
scale, using chippers, Trucks, Tanks, and Extruders, as described above. We may
or may not be able to overcome the challenges that arise and conduct operations
successfully on a scale necessary to achieve profitable operations. Therefore,
this must be considered an unproven technology and a high-risk business
plan.





Anticipated
Expenses in the next twelve months





Over the
next twelve months, we intend to begin operations at our processing center in
Clermont, Florida and our transfer station in Del Ray Beach, Florida. We are
further considering, should business conditions dictate and our resources
permit, opening transfer stations in Hialeah, Ft. Meyers, Lakeland, Gainesville,
Tallahassee, and Pensacola, Florida.





We
anticipate that the approximate expenses associated with opening and operating
our processing center for twelve months and opening and operating each of our
transfer stations for twelve months will be as follows:





Processing
Center





Item
            CostLease
      / Mortgage Payment ($7,583.33 / month)
            $
            91,000Trailers
      (2 x $30,000)
            $
            60,000Trucks
      (2 x $2,000/mo lease x 12 months)
            $
            48,000Storage
      Tanks – 10,000 gallons (8 x $40,000)
            $
            320,000Solvent
      (6,000 gallons x $10 per gallon)
            $
            60,000Extruder
            $
            95,000Pelletizer
            $
            67,500Engineering
      Costs to Assemble Extruder
            $
            60,000Plumbing
      Costs to Assemble Extruder
            $
            20,000Power
      and Other Utilities ($13,000 / month x 12 months)
            $
            156,000Plant
      Staff (8 employees per shift x 3 shifts)
            $
            921,600Plant
      Manager
            $
            40,000Equipment
      Maintenance
            $
            30,000Total
            $
            1,969,100




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Transfer
Station





Item
            CostLease
      / Mortgage Payment ($4,636.50 / month)
            $
            55,638Trailers
      (2 x $30,000)
            $
            60,000Trucks
      (2 x $2,000/mo lease x 12 months)
            $
            48,000Storage
      Tanks – 10,000 gallons (8 x $40,000)
            $
            320,000Solvent
      (6,000 gallons x $10 per gallon)
            $
            60,000Power
      and Other Utilities ($ 1,000/ month x 12 months)
            $
            12,000Staff
      (4 employees per shift x 2 shifts)
            $
            184,200Total
            $
            739,838





We expect
to incur $937,500 in other expenses in the first twelve months of operation and
annually thereafter include: Salaries for our President, CEO, Development
Director, Senior Development Director, and Accountant, totaling $522,000
annually; office supplies, phones, and miscellaneous expenses totaling $48,000
annually; marketing and public relation costs of $270,000 annually, including
three staff members; and legal and accounting fees totaling $97,500
annually.





As
described above, we anticipate that we will require approximately $3,646,438 in
order to fully implement our business plan in the next twelve months. We believe
that we have sufficient funds to open our initial processing center and transfer
station and begin operations on a limited basis – with fewer than the optimum
number of Tanks, Trailers, Trucks, and employees listed above. As we generate
revenue through operations or financing, we plan on purchasing or leasing
additional equipment and increasing the level of operations. When our first
processing center and transfer station are open and fully operational, we will
seek to open additional transfer stations, as indicated above, to supply Gel to
the Clermont processing center. After the Clermont processing center and its
associated transfer stations are operating successfully, we intend to use that
as a model to aid us both in replicating the operations in other metropolitan
areas throughout the United States, and in raising additional capital to fund
this expansion if we determine that such expansion is indicated and such
financing is required.





Plan
for other Products and Services





In
addition to our recycling operations, we produce six other products on a very
limited basis, including Tire Muscle®, Dumpster EaseTM, Diaper EaseTM, Nu-silver,
Nu-Brass, and Nu-Chrome.  These products have a limited customer base
and have not been heavily marketed or distributed. We intend to continue
producing small amounts of these products for existing customers while seeking
other companies or individuals that may wish to purchase the rights to these
products.




18
 Table of Contents




Marketing
Plan & Sales Strategy





We have
not yet commenced recycling operations.





Our goal
is to become the industry leader in the recycling of polystyrene. Our initial
marketing efforts will focus on acquiring EPS for recycling and re-sale as
Pellets. We will attempt to build relationships that will aid us in acquiring
scrap EPS from the construction industry, the packaging industry, local and
state governments, military bases and vessels, and the food services industry.
Our executive management will initially be responsible for contacting and
creating relationships with decision-makers within these areas. They will
present information regarding the fiscal, environmental, and public relations
impact of utilizing our services.





We also
intend to increase public awareness of our company and our Process to create
public support for our services. We intend to use Internet-based and traditional
media to accomplish this. If the general public supports our efforts for
environmental reasons, we feel that the likelihood of large organizations
utilizing our services increases significantly. We also intend to work closely
with trade groups, including the International Expanded Polystyrene recycling
Association (“INEPSA”) and the Alliance of Foam Packaging Recyclers (“AFPRA”) to
introduce the technology to the industry. By coordinating our public awareness
campaigns with theirs, we feel we can educate a broader audience regarding the
recycling of EPS in general, and regarding our services in
particular.





We also
plan on attending relevant national events and conferences. There are events and
conferences managed by national institutions and organizations to promote their
respective industries. We plan to attend a number of events attended by the
organizations mentioned above that generate a large amount of scrap EPS. These
events will include trade meetings, promotional events, seminars, and
conferences, which are heavily attended by decision-makers within those
industries, in order to further expose our services.





We intend
to work with landfills serving the areas around our processing center and
transfer stations. By intercepting EPS bound for the landfill, we believe that
we can extend the life of the landfill and reduce the environmental impact of
EPS. Similarly, we will work to provide EPS recycling on a residential level in
communities where there is already a residential recycling pick-up program in
place. In such cases, we will attempt to partner with those companies that are
already picking up paper, aluminum, and glass products, allowing them to add EPS
to their list of recyclable material and providing additional scrap EPS for
us.





In
addition to acquiring scrap EPS to recycle into Pellets, we will need to sell
the Pellets, which we will produce. The market for polystyrene pellets, however,
is open and well-established. While we plan to expend as much effort as we deem
necessary to sell our Pellets, demand within the plastics manufacturing industry
is such that we do not anticipate any difficulties in selling our Pellets.
Polystyrene pellets are the same regardless of the supplier and prices are
relatively fixed. Our executive management will work to establish contacts
within the industry to ensure that we are able to participate in this market in
a profitable manner. By working closely with companies




19
 Table of Contents




that
manufacture products from polystyrene, we will also be able to provide a public
relations boost to these partners, as they will be able to promote their
products as both recycled and recyclable. These types of partnerships should
further ensure a steady market for our Pellets.





Sales
Personnel





We do not
currently employ any sales personnel. In the short term, we intend to use the
services of our executive management to sell our services and products. As the
area in which our services and products are offered expands, however, we plan to
employ regional sales representatives to promote and sell our recycling services
to governments, companies, and the general public. These sales representatives
will be responsible for soliciting, selecting and securing accounts within a
particular regional territory. We expect to pay such sales representatives on a
commission basis. In addition, we may decide to pay each sales representative a
base salary. We expect to provide service and support to our sales
representatives, including advertising and sales materials.





Financing





We
anticipate that we will require approximately $3,646,438 in order to fully
implement our business plan in the next twelve months. The recent private
placement by Blue Earth Delaware of 80,500 shares of its Series B Preferred
Stock for $805,000 allows us to begin implementing our near-term business plan
on a limited basis. Over the next twelve months, we intend to raise an
additional $4,000,000 in order to completely implement our business plan and, to
the extent business conditions warrant and our resources permit, to expand our
operations and open additional processing centers and transfer stations in other
geographic areas throughout the United States.  We do not presently
have sufficient capital to fully proceed with any such expansion.  In
connection with raising this additional capital, we will incur appropriate
accounting and legal fees. Should our revenues be sufficient to cover the costs
of any such expansion, we will not seek additional financing.





Governmental
Regulation





With the
exception of the environmental laws noted below, we are unaware of and do not
anticipate having to expend significant resources to comply with any
governmental regulations of the recycling industry. We are subject to the laws
and regulations of those jurisdictions in which we plan to sell our product,
which are generally applicable to business operations, such as business
licensing requirements, income taxes and payroll taxes. In general, the
collection, recycling, and sale of polystyrene in the United States is not
subject to special regulatory and/or supervisory requirements.


Compliance
with Environmental Laws
 
 The
business may be subject, in certain instances, to supervision and regulation by
state and federal governmental authorities, specifically the U.S. Environmental
Protection Agency (“EPA”) and state counterparts. We will comply with all EPA
and other requirements for receiving and mixing chemicals and intend to comply
with all future regulations and requirements.
 
 Critical
Accounting Policies
 
 Our
significant accounting policies are described in Note 1 of the Financial
Statements.


20
 Table of Contents




Item 8.   Financial Statements and Supplementary
Data





Index to
Financial Statements:





Audited
      Financial Statements:F-1
            Report of Independent Registered Public Accounting
      Firm;F-2
            Consolidated Balance Sheet as of March 31, 2008 Pro Forma
      Consolidated Balance Sheet as of March 31, 2008;F-3
            Statements of Operations for the period from Inception
      (February 5, 2008) through March 31, 2008 and Pro Forma Consolidated
      Statements of Operations for the three month period ending March 31,
      2008;F-4
            Statement of Stockholders’ Equity;F-5
            Statements of Cash Flows for the period from Inception
      (February 5, 2008) through March 31, 2008;F-6
            Notes to Consolidated Financial
    Statements.




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 Table of Contents




MOORE
& ASSOCIATES, CHARTERED
 ACCOUNTANTS
AND ADVISORS
 PCAOB
REGISTERED
 
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 Blue
Earth Solutions, Inc.
 (A
Development Stage Company)
 
 We
have audited the accompanying balance sheet of Blue Earth Solutions, Inc. (A
Development Stage Company) as of March 31, 2008, and the related statements of
operations, stockholders’ equity and cash flows for the period ended March 31,
2008 and since inception on February 5, 2008 through March 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 on our audits.
  We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  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 that our audits provide a reasonable basis
for our opinion.
  In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Blue Earth Solutions, Inc. (A
Development Stage Company) as of March 31, 2008, and the related statements of
operations, stockholders’ equity and cash flows for the period ended March 31,
2008 and since inception on February 5, 2008 through March 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 5 to the
financial statements, the Company has an accumulated deficit of $4,583 as of
March 31, 2008.  The Company currently has limited liquidity, and has
not completed its efforts to establish a stabilized source of revenues as stated
in Note 5.  This raises substantial doubt as to the Company’s ability
to continue as going concern.  The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
   /s/
Moore & Associates, Chartered
  Moore
& Associates Chartered
 Las
Vegas, Nevada
 May
1, 2008
 
 2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253-7499 Fax (702)
253-7501




F-1
 Table of Contents


BLUE
EARTH SOLUTIONS, INC.


(A
Development Stage Company) Balance Sheet
 
 ASSETSMarch
      31,2008CURRENT
      ASSETSCash
      and cash equivalents
                  $
                  15,150Total
      Current Assets
                  
                  15,150FIXED
      ASSETSProperty
      and equipment, net
                  
                  545,417Total
      Fixed Assets
                  
                  545,417TOTAL
      ASSETS
                  $
                  560,567LIABILITIES AND
      STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESNotes
      payable - related parties
                  $
                  200,000Total
      Current Liabilities
                  
                  200,000STOCKHOLDERS'
      EQUITYPreferred
      stock, Series A, $0.0001 par value, 10,000,000shares authorized,
      400,000 shares issued and outstanding
                  
                  400Preferred
      stock, Series B, $0.0001 par value, 5,000,000shares authorized,
      36,500 shares issued and outstanding
                  
                  37Common
      stock, $0.0001 par value, 100,000,000 sharesauthorized, 7,000,000
      shares issued and outstanding
                  
                  7,000Additional
      paid-in capital
                  
                  357,713Deficit
      accumulated during the development stage
                  
                  (4,583)Total
      Stockholders' Equity
                  
                  360,567TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  $
                  560,567


The
accompanying notes are an integral part of these financial
statements.




F-2
 Table of Contents


BLUE
EARTH SOLUTIONS, INC. (A Development Stage Company) Statement of Operations


From
      Inceptionon February
      5,2008
      ThroughMarch
      31,2008REVENUES
              $
              -OPERATING
      EXPENSESDepreciation
      expense
              
              4,583General
      and administrative
              
              -Total
      Operating Expenses
              
              4,583LOSS
      FROM OPERATIONS
              
              (4,583)OTHER
      EXPENSESInterest
      expense
              
              -Total
      Other Expenses
              
              -NET
      LOSS BEFORE INCOME TAXES
              
              (4,583)Income
      taxes
              
              -NET
      LOSS
              $
              (4,583)BASIC
      LOSS PER COMMON SHARE
              $
              (0.00)WEIGHTED
      AVERAGE NUMBER OFCOMMON SHARES
    OUTSTANDING
              
              3,518,250


The
accompanying notes are an integral part of these financial
statements




F-3
 Table of Contents


BLUE
EARTH SOLUTIONS, INC. (A Development Stage Company) Statement of Stockholders' Equity


Preferred
      Stock
              
              Common
      Stock
              
              AdditionalPaid-In
              
              AccumulatedShares
              
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Deficit
              
              TotalBalance,
      February 5, 2008
              -
              
              $
              -
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
      shares issued to founders
              -
              
              
              -
              
              7,000,000
              
              
              7,000
              
              
              (6,850)
              
              
              -
              
              
              150Preferred
      shares issued to founders
              400,000
              
              
              400
              
              -
              
              
              -
              
              
              (400)
              
              
              -
              
              
              -Preferred
      shares issued in a privateplacement at $10 per
      share
              36,500
              
              
              37
              
              -
              
              
              -
              
              
              364,963
              
              
              -
              
              
              365,000Net
      loss from inceptionthrough March 31, 2008
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              (4,583)
              
              
              (4,583)Balance,
      March 31, 2008
              436,500
              
              $
              437
              
              7,000,000
              
              $
              7,000
              
              $
              357,713
              
              $
              (4,583)
              
              $
              360,567


The
accompanying notes are an integral part of these financial
statements.




F-4
 Table of Contents


BLUE
EARTH SOLUTIONS, INC.


(A
Development Stage Company)


Statement of Cash Flows


From
      Inception
                      on
      February 5,2008
      ThroughMarch
      31,2008OPERATING
      ACTIVITIESNet
      income (loss)
              $
              (4,583)Adjustments
      to Reconcile Net Loss to NetCash
      Used by Operating Activities:Depreciation
      expense
              
              4,583Shares
      issued for services
              
              -Net
      Cash Used in Operating Activities
              
              -INVESTING
      ACTIVITIESPurchase
      of property and equipment
              
              (350,000)Net
      Cash Used in Investing Activities
              
              (350,000)FINANCING
      ACTIVITIESProceeds
      from notes payable
              
              -Issance
      of preferred shares for cash
              
              365,150Net
      Cash Provided by Financing Activities
              
              365,150NET
      DECREASE IN CASH
              
              15,150CASH
      AT BEGINNING OF PERIOD
              
              -CASH
      AT END OF PERIOD
              $
              15,150SUPPLEMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
              $
              -Income
      taxes
              $
              -NON
      CASH FINANCING ACTIVITIES:Equipment
      purchased for preferred stock and note payable
              $
              200,000


The
accompanying notes are an integral part of these financial
statements.




F-5
 Table of Contents


BLUE
EARTH SOLUTIONS, INC.


(A
Development Stage Company)
 Notes to Financial Statements
 March 31,
2008




1.           SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
 
 Nature of
Business
 Blue
Earth Solutions, Inc. (the Company) was incorporated in the State of Delaware on
February 5, 2008. The Company was incorporated to engage in the recycling
business. The Company purchased patents used to develop and market a practical,
economical and environmentally safe means of disposing of and recycling certain
polystyrene and expended polystyrene products.
 
 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 at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
 
 Basic (Loss) per Common
Share
 Basic
(loss) per share is calculated by dividing the Company’s net loss applicable to
common shareholders by the weighted average number of common shares during the
period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number
of shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. There are 2,000,009 in such common stock
equivalents outstanding as of March 31, 2008.
  From
      Inception on February 5,
                2008
      Through
                March
      31,
                2008Loss
      (numerator)
              $
              (4,583)Shares
      (denominator)
              
              3,518,250Per
      share amount
              $
              (0.00)
 
 Dividends
 The
Company has not adopted any policy regarding payment of dividends. No dividends
have been paid during any of the periods shown.
 
 Cash and Cash
Equivalents
 For
purposes of the Statement of Cash Flows, the Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
 
 Income
Taxes
 The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax
  F-6
 Table of Contents
 
 1.           SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
 
 Income
Taxes
 bases of
assets and liabilities and the tax rates in effect when these differences are
expected to reverse.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
 
 The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
  March
      31,
                2008Income
      tax expense at statutory rate
              $
              (1,787)Common
      stock issued for services
              
              -Valuation
      allowance
              
              1,787Income
      tax expense per books
              $
              -
 
 Net
deferred tax assets consist of the following components as of:
 
 March
      31, 2008NOL
      carryover
              $
              1,787Valuation
      allowance
              
              (1,787)Net
      deferred tax asset
              $
              -
 
 Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards of $4,583 for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
 
 Impairment of Long-Lived
Assets
 The
Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or the fair value less costs to
sell.
 
 Accounting
Basis
 The basis
is accounting principles generally accepted in the United States of
America.  The Company has adopted a December 31 fiscal year
end.
 
 F-7
 Table of Contents
 
 1.           SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
 
 Stock-based
compensation.
 As of
March 31, 2008, the Company has not issued any share-based payments to its
employees.
 
 The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1,2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123-R.
 
 Recent Accounting
Pronouncements
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning January 1, 2008. The Company is
currently assessing the potential impact that adoption of SFAS No. 157
would have on the financial statements.
 
 In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective beginning January 1, 2008, although early adoption is permitted.
The Company is currently assessing the potential impact that adoption of SFAS
No. 159 will have on the financial statements.
 
 The FASB
has revised SFAS No. 141.  This revised statement establishes uniform
treatment for all acquisitions.  It defines the acquiring
company.  The statement further requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired at the acquisition date, measured at their fair market values as of
that date.  It requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquired, at the full amounts of their
fair values. This changes the way that minority interest is recorded and
modified as a parent’s interest in a subsidiary changes over
time.  This statement also makes corresponding significant amendments
to other standards that related to business combinations, namely, 109, 142 and
various EITF’s.  This statement applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008.  The Company believes the implementation of this standard will
have no effect on our financial statements.
 
 Revenue
Recognition
 The
Company recognizes revenue when products are fully delivered or services have
been provided and collection is reasonably assured.
 
 F-8
 Table of Contents
 
 1.           SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)
 
 Advertising
Costs
 The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of March 31,
2008.
 
 2.           PREFERRED STOCK – SERIES
A
 There are
Ten Million (10,000,000) shares of Preferred Series A stock authorized with a
par value of $0.0001.
 
 The
issued “Series A Preferred Stock” is referred to herein as the “Series A
Preferred Stock.”
 
 1.
              Amount.  The
      number of shares issued constituting Series A Preferred Stock shall be
      400,000.
 
 2.
              Stated
      Capital.  The amount to be represented in stated capital
      at all times for each share of Series A Preferred Stock shall be
      $16.50.
 
 3.
              Rank.  All
      shares of Series A Preferred Stock shall rank prior to all of the
      Corporation’s Common Stock, par value $.0001 per share (the “Common
      Stock”), now or hereafter issued, both as to payment of dividends and as
      to distributions of assets upon liquidation, dissolution or winding up of
      the Corporation, whether voluntary or involuntary. For the purpose of
      these Articles, the term “Common Stock” shall initially mean the class
      designated as Common Stock, par value $.0001 per share, of the Corporation
      subject to adjustment as hereinafter
provided.
 
 4.
              Dividends.  The
      dividend shall be payable annually to the holders of shares of Series A
      Preferred Stock at the option of the Corporation in cash or common stock
      valued at the average closing price of the stock for the twenty (20)
      trading days subsequent to dividend due date. The dividend rate is eight
      (8%) percent of the stated value (“Stated Value”) per share of the shares
      of Series A Preferred Stock not to exceed one (1%) percent of gross
      revenues as set forth in the Corporation’s financial statements, but not
      less then 2% of stated value of outstanding balance of the Series A
      Preferred. Stated Value is defined as $16.50 per outstanding share of
      Series A Preferred Stock.
 
 5.           Liquidation
Preference.
 
 (a)
              The
      liquidation value of shares of this Series, in case of the voluntary or
      involuntary liquidation, dissolution or winding-up of the Corporation,
      shall be $16.50 per share.
 (b)
              In
      the event of any voluntary or involuntary liquidation, dissolution or
      winding-up of the Corporation, the holders of shares of this Series shall
      be entitled to receive the liquidation value of such shares held by them
      until the liquidation value of all shares of Series A Preferred Stock
      shall have been paid in full.  Upon payment in full of the
      liquidation value to
  F-9
 Table of Contents
  2.           PREFERRED STOCK – SERIES A
(Continued)
 
 which the
holders of shares of the shares of Series A Preferred Stock are entitled, the
holders of shares of this Series will not be entitled to any further
participation in any distribution of assets by the Corporation.
  (c)
              Neither
      a consolidation or merger of the Corporation with or into any other
      corporation, nor a merger of any other corporation with or into the
      Corporation, nor a sale or transfer of all or any part of the
      Corporation’s
 assets
for cash or securities or other property shall be considered a liquidation,
dissolution or winding-up of the Corporation’s within the meaning of this
Paragraph 5.
 
 6.
              Voting Rights. The
      shares of Series A Preferred Stock shall have no voting
      rights,
 
 7.
              Redemption.  The
      shares of Series A Preferred Stock are redeemable at the option of the
      Corporation in cash at $16.50 per share or in shares of common stock in
      the ratio of five (5) shares of common stock for each share of Series A
      Preferred Stock redeemed. No redemption of Series A Preferred Stock shall
      be made in shares of common stock unless the common stock is trading at an
      average of $6.00 for a period of least twenty (20) consecutive days prior
      to the redemption. The Corporation shall send a notice redemption at least
      30 days prior to the date of redemption; and the holder may convert the
      Series A Preferred Stock in shares of Common Stock pursuant to paragraph 8
      below at any time prior to the date of redemption as specified in the
      notice of redemption.
 
 8.           Conversion
Provisions.
 
 (a)
              Conversion at Option
      of the Holders.  Each share of Series A Preferred Stock
      shall be convertible, at the option of the holder thereof, at any time on
      or after the date of issue, into fully paid and non-assessable shares of
      Common Stock and such other securities and property as hereinafter
      provided, at the rate of five (5) shares of Common Stock for each full
      share of Series A Preferred Stock (“Conversion Ratio”) subject to
      adjustment in the event of a stock split or
    recapitalization.
 
 (b)
              Mechanics of
      Conversion.  Any holder of shares of Series A Preferred
      Stock desiring to convert such shares into Common Stock shall surrender
      the certificate or certificates for such shares of Series A Preferred
      Stock at the office of the transfer agent which certificate or
      certificates shall be duly endorsed or accompanied by proper instruments
      of , accompanied by irrevocable written notice to the Corporation that the
      holder elects so to convert such shares of Series A Preferred Stock and
      specifying the name or names (with address) in which certificates are to
      be issued.
  F-10
 Table of Contents
  3.           PREFERRED STOCK – SERIES
B
 There are
Five Million (5,000,000) shares of Series B Preferred Stock authorized with a
par value of 0.0001 per share, 36,500 of which have been issued.
 
 Each
Preferred Share has voting rights of one vote per share, is convertible to
six
 Common
Shares of the Company (“Common Shares”), carries a liquidation value of $10 per
share, and bears a cumulative annual dividend of $1 per share,
payable
 quarterly,
which increases to $1.30 per share if the cash dividend is not paid within 30
days of the end of each quarter. In the event a dividend is not paid
by
 January
30next
following the year for which such dividend has accrued, the dividend will be
payable in Common Shares valued at the average closing price for the preceding
twenty trading days. The Preferred Shares are callable by the Company upon 30
days’ notice at $10.00 per share during which time the holder may convert into
common shares.
 
 Upon
conversion of the Preferred Shares into Common Shares, each holder will in
addition to receive two warrants for each Preferred Share converted, exercisable
into common shares at $4.00 per share until December 31, 2010. The Warrants are
callable by the Company upon thirty days’ notice in the event the Common Shares
trade for the ten trading days preceding such notice at or above $6.00 per share
Holders may exercise their warrants during the notice period.
 
 4.           COMMON
STOCK
 
 There are
a total of One Hundred Million (100,000,000) shares of common stock authorized
with 7,000,000 outstanding having a par value of $0.0001 per
share.  The Company issued the 7,000,000 shares to its founders at its
inception.
 
 5.           GOING
CONCERN
 The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern.  However, the Company has accumulated
deficit of $4,583 as of March 31, 2008.  The Company currently has
limited liquidity, and has not completed its efforts to establish a stabilized
source of revenues sufficient to cover operating costs over an extended period
of time.
 
 Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses The Company intends to
position itself so that it may be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
 
 6.           NOTES PAYABLE-RELATED
PARTIES
 
 In March
2008, the Company purchased manufacturing equipment from a preferred shareholder
for cash of $350,000 and a note payable of $200,000. The note payable is due in
6 months, is non interest bearing and secured by the equipment.
 
 F-11
 Table of Contents
  7.           EQUIPMENT
 
 The
Company’s equipment is recorded at cost and is being depreciated over its
estimated useful life of 5 years using the straight line method. Depreciation
expense for the period ended March 31, 2008 was $4,583.
 
 The
components of equipment as of December 31, 2007 are as follows:
   Manufacturing
      equipment
              $
              550,000Less: Accumulated
      depreciation
              
              (4,583)Net Property and
      Equipment
              $
              545,417


F-12
 Table of Contents




Item
9.   Changes In and Disagreements with Accountants on Accounting
and FinancialDisclosure





No events
occurred requiring disclosure under Item 304(b) of Regulation S-K during the
fiscal year ending March 31, 2008.  However, the audit report of our
auditor, Moore & Associates, Chartered, Independent Registered Public
Accounting Firm, for the year ended March 31, 2008, contains and uncertainty
about our ability to continue as a going concern.





Item 9A.  Controls and Procedures





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 Rule 13a-15(f) under the Exchange Act.
This rule defines internal control over financial reporting as a process
designed by, or under the supervision of, the Company’s Chief Executive Officer
and Chief Financial Officer, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with U.S. GAAP. Our internal control over
financial reporting includes those policies and procedures that:




•
            
            Pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;




•
            
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with U.S. GAAP, and that
      receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the
      Company; and




•
            
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls
and procedures as of March 31, 2008. Based on this evaluation, our management
has concluded that our disclosure controls and procedures adequately ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms. The evaluation did not identify
any change in our internal control over financial reporting that occurred during
the fiscal year ended March 31, 2008 that has materially affected or is
reasonably likely to materially affect our internal control over such
reporting.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation,




controls
and procedures designed to ensure that information required to be disclosed in
our reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.





Limitations on the
Effectiveness of Internal Controls





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  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.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also 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. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.





Item 9B.  Other Information





There was
no information required to be disclosed in a report on a form 8-K during the
fourth quarter of the year covered by this Form 10-K, which was not
reported.





22
 Table of Contents




PART III





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







The
following table sets forth information regarding the members of our board of
directors and our executive officers and other significant employees as of the
date of the Merger on May 16, 2008. All of our officers and directors were
appointed on the effective date of the Merger, and were the executive officers
and directors of Blue Earth Delaware, our accounting acquirer as of March 31,
2008. All of our directors hold office until the next annual meeting of
stockholders and their successors are duly elected and qualify. Executive
officers serve at the request of the board of directors.





Name
            Age
            Office(s)
      HeldPatricia
      Cohen
            54
            CEO,
      Secretary, & DirectorPaul
      Slusarczyk
            61
            President,
      CFO & DirectorSharon
      Slusarczyk
            51
            DirectorHarvey
      Katz
            61
            Director





Set forth
below is a brief description of the background and business experience of our
current executive officers and directors.





Paul D.
Slusarczyk has been President, Chief Financial Officer, and a
Director of Blue Earth Delaware since its inception, and our President Chief
Financial Officer, and Director since May 16, 2008.  Prior to joining
Blue Earth Solutions, Paul spent one year as Vice President of HealthFair, a
mobile medical screening company designing purchasing policies and focused
heavily on vehicle preventative maintenance.  Between 2002 and 2006,
he was CFO and a member of the board of directors of San Ignacio Development
Company, focusing on the development of a major resort complex on the west coast
of Mexico near the City of Los Mochis.  He was Senior Vice President
of Food Services of the Americas, Inc., the White Castle Hamburger restaurant
franchisee in Mexico, from November 1999 until March of 2001 and a member of its
Board of Directors from November 1995 until March of 2001.  He served
as its Chairman of the Board and President from its inception in November 1995
until November 1999. He served as Chairman of the Board of White Castle de
Mexico, S.A. de C.V. from September 1994 until December 1997.  From
1993 until joining Food Services of the Americas, Inc. upon its formation, Mr.
Slusarczyk was Managing Director of Grupo Mexicano de Video, S.A. de C.V.
(“Grupo Mexicano”), a master Blockbuster franchisee for Mexico.  From
1987 through 1992, Mr. Slusarczyk was the Managing Director of Blockbuster
Video, a wholly-owned subsidiary of Blockbuster Entertainment.  From
1983 until 1987, Mr. Slusarczyk owned and operated a chain of video stores that
was subsequently acquired by Blockbuster Entertainment.  In addition,
Mr. Slusarczyk was Senior Director of Finance for Waste Management, Inc., a
corporation engaged in international waste disposal, from 1971 until 1983 and
was part of a team that built a city to house 4,000 workers.





Patricia Cohenhas been the Chief Executive Officer, Secretary and a Director of Blue
Earth Delaware since its inception, and our Chief Executive Officer, Secretary
and Director since May 16, 2008. Prior to joining Blue Earth Delaware, Mrs.
Cohen was retired, focusing on managing




23
 Table of Contents




family
assets. From 2000 until 2004, she was a partner in Westfield Financial. Prior to
that she was a member of the Board of Directors of Alpha Hospitality
(1993-1997); the owner of The Restaurant at 625 Main, Classic Catering, and La
Dolce Sera Restaurant (2000-2005); and a principal in Regent Air (1983-1987).
Mrs. Cohen earned Bachelor’s and Master’s degrees in Education from Long Island
University, graduating Summa Cum Laude.





Sharon
Slusarczyk has been a Director of Blue Earth Delaware since its
inception, and our Director since May 16, 2008. Mrs. Slusarczyk was a manager at
UFC Title Insurance Agency from 2005 until 2007 where her responsibilities
included planning and stimulating growth as well as daily operational tasks.
Prior to that, she owned and operated All American Title from 2002 until 2005
where she managed all staff members and office operations.





Harvey Katz,
Ph.D. has been a Director of Blue Earth Delaware since its inception, and
our Director since May 16, 2008.  Dr. Katz is the holder of and
co-inventor of several patents acquired by the company.  For the past
15 years, Dr. Katz was CEO of International Foam Solutions where he refined the
patented processes to recycle polystyrene and created Tire
Muscle.  Dr. Katz has been published in 23 technical and scholastic
journals and lecturers at the university level.





Family
Relationships





There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive officers with
the exception of Paul and Sharon Slusarczyk, who are husband and
wife.





Involvement
in Certain Legal Proceedings





To  the
best of our knowledge, during the past five years, none of the
following  occurred  with  respect  to a
present or former director, executive officer, or  employee: (1) any
bankruptcy petition filed by or against any business  of which such
person was a general partner or executive officer either
at  the  time  of the bankruptcy or within two
years prior to that time; (2) any conviction in a
criminal  proceeding  or  being subject to a
pending criminal
proceeding  (excluding  traffic  violations and
other minor offenses); (3) being 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) being found
by  a  court  of  competent  jurisdiction  (in  a  civil
action), the SEC or the
Commodities  Futures  Trading  Commission  to  have  violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.





Audit
Committee





We do not
have a separately-designated standing audit committee. The entire Board of
Directors performs the functions of an audit committee, but no written charter
governs the actions of the Board when performing the functions of what would
generally be performed by an audit committee. The Board approves the selection
of our independent accountants and meets and




24
 Table of Contents




interacts
with the independent accountants to discuss issues related to financial
reporting. In addition, the Board reviews the scope and results of the audit
with the independent accountants, reviews with management and the independent
accountants our annual operating results, considers the adequacy of our internal
accounting procedures and considers other auditing and accounting matters
including fees to be paid to the independent auditor and the performance of the
independent auditor.





Nomination
Committee





Our Board
of Directors does not maintain a nominating committee. As a result, no written
charter governs the director nomination process. Our size and the size of our
Board, at this time, do not require a separate nominating
committee.





When
evaluating director nominees, our directors consider the following
factors:





·
            The
      appropriate size of our Board of
Directors;


·
            Our
      needs with respect to the particular talents and experience of our
      directors;


·
            The
      knowledge, skills and experience of nominees, including experience in
      finance, administration or public service, in light of prevailing business
      conditions and the knowledge, skills and experience already possessed by
      other members of the Board;


·
            Experience
      in political affairs;


·
            Experience
      with accounting rules and practices;
and


·
            The
      desire to balance the benefit of continuity with the periodic injection of
      the fresh perspective provided by new Board
  members.





Our goal
is to assemble a Board that brings together a variety of perspectives and skills
derived from high quality business and professional experience. In doing so, the
Board will also consider candidates with appropriate non-business
backgrounds.





Other
than the foregoing, there are no stated minimum criteria for director nominees,
although the Board may also consider such other factors as it may deem are in
our best interests as well as our stockholders. In addition, the Board
identifies nominees by first evaluating the current members of the Board willing
to continue in service. Current members of the Board with skills and experience
that are relevant to our business and who are willing to continue in service are
considered for re-nomination. If any member of the Board does not wish to
continue in service or if the Board decides not to re-nominate a member for
re-election, the Board then identifies the desired skills and experience of a
new nominee in light of the criteria above. Current members of the Board are
polled for suggestions as to individuals meeting the criteria described above.
The Board may also engage in research to identify qualified individuals. To
date, we have not engaged third parties to identify or evaluate or assist in
identifying potential nominees, although we reserve the right in the future to
retain a third party search firm, if necessary. The Board does not typically
consider shareholder nominees because it believes that its current nomination
process is sufficient to identify directors who serve our best
interests.




Section
16(a) Beneficial Ownership Reporting Compliance





To the
best of our knowledge, no officer, director or beneficial owners of more than
ten percent of our common stock failed to timely file reports required by
Section 16(a) during the most recent fiscal year or prior years.





Code
of Ethics Disclosure





As of
March 31, 2008, we had not adopted a Code of Ethics for Financial Executives,
which include our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.





25
 Table of Contents





Item 11.  Executive Compensation





Summary
Compensation Table





The table
below summarizes all compensation awarded to, earned by, or paid to both to our
officers and to our directors for all services rendered in all capacities to us
for our fiscal years ended March 31, 2008 and 2007.





SUMMARY
      COMPENSATION TABLEName
              and
              principal
              position
            Year
            Salary($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Patricia
      Cohen, CEO, Secretary, and Chairman
            2008
              2007
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/aPaul
      Slusarczyk, President and CFO
            2008
              2007
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/a
            0
              n/aRandy
      Weston, Former President and CEO
            2008
              2007
            0
              0
            0
              0
            0
              0
            0
              0
            0
              0
            0
              0
            0
              0
            0
              0








Narrative
Disclosure to the Summary Compensation Table





We have
written employment contracts with both of our officers. We have an employment
agreement in place with Mrs. Cohen that retains her through February of 2013.
According to the terms of the agreement, Mrs. Cohen will receive a starting base
salary of $240,000 per year, with a 20% increase each year on the anniversary of
her employment agreement. Mrs. Cohen may also receive an annual bonus, payable
quarterly equal to 1% of all gross revenues, and will be entitled to participate
in any standard employee benefit plans, medical insurance plans, life insurance
plans, disability income plans, retirement plans, vacation plans, expense
reimbursement plans and other benefit plans which we may from time to time have
in effect for all or most of our senior executives.





We also
have an employment agreement in place with Mr. Slusarczyk that retains him
through February of 2013. According to the terms of the agreement, Mr.
Slusarczyk will receive a starting base salary of $240,000 per year, with a 20%
increase each year on the anniversary of his employment agreement. Mr.
Slusarczyk may also receive an annual bonus, payable quarterly equal to 1% of
all gross revenues, and will be entitled to participate in any standard employee
benefit plans, medical insurance plans, life insurance plans, disability income
plans, retirement plans, vacation plans, expense reimbursement plans and other
benefit plans which we may from time to time have in effect for all or most of
our senior executives.





26
 Table of Contents




Stock
Option Grants





We have
not granted any stock options to the executive officers or directors since our
inception.  The company intends to implement a stock option program
for its officers and directors in 2008.





Outstanding
Equity Awards at Fiscal Year-End





The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer as of March 31,
2008.





OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
            STOCK
      AWARDSName
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Exercisable
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Unexercisable
            Equity
              Incentive
              Plan
              Awards:
              Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
              (#)
            Option
              Exercise
              Price
              ($)
            Option
              Expiration
              Date
            Number
              of
              Shares
              or
      Units
              of
              Stock
      That
              Have
              Not
              Vested
              (#)
            Market
              Value
              of
              Shares
              or
              Units
              of
              Stock
              That
              Have
              Not
              Vested
              ($)
            Equity
              Incentive
              Plan
              Awards:
              Number
              of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
      Have
              Not
              Vested
              (#)
            Equity
              Incentive
              Plan
              Awards:
              Market
      or
              Payout
              Value
      of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
              Have
      Not
              Vested
              (#)Patricia
      Cohen, CEO, Secretary, and Chairman
            -
            -
            -
            -
            -
            -
            -
            -
            -Paul
      Slusarczyk, President and CFO
            -
            -
            -
            -
            -
            -
            -
            -
            -Randy
      Weston, Former President and CEO
            -
            -
            -
            -
            -
            -
            -
            -
            -




27
 Table of Contents




Compensation
of Directors





The table
below summarizes all compensation of our directors as of March 31,
2008.





DIRECTOR
      COMPENSATIONName
            Fees
      Earned or
              Paid
      in
              Cash
              ($)
            Stock
      Awards
              ($)
            Option
      Awards
              ($)
            Non-Equity
              Incentive
              Plan
              Compensation
              ($)
            Non-Qualified
              Deferred
              Compensation
              Earnings
              ($)
            All
              Other
              Compensation
              ($)
            Total
              ($)Patricia
      Cohen, CEO, Secretary, and Chairman
            -
            -
            -
            -
            -
            -
            -Paul
      Slusarczyk, President, CFO, and Director
            -
            -
            -
            -
            -
            -
            -Sharon
      Slusarczyk, Director
            -
            -
            -
            -
            -
            -
            -Harvey
      Katz, Director
            -
            -
            -
            -
            -
            -
            -Randy
      Weston, Former President and CEO
            -
            -
            -
            -
            -
            -
            -








Narrative
Disclosure to the Director Compensation Table





We do not
pay any compensation to our directors at this time. However, we reserve the
right to compensate our directors in the future with cash, stock, options, or
some combination of the above.





Employment
Agreements





We have
written employment contracts with both of our officers and other key employees.
We have an employment agreement in place with Mrs. Cohen that retains her
through February 4, 2013. According to the terms of the agreement, Mrs. Cohen
will receive a starting base salary of $240,000 per year, with a 20% increase
each year on the anniversary of her employment agreement. Mrs. Cohen may also
receive an annual bonus, payable quarterly equal to 1% of all gross revenues,
and will be entitled to participate in any standard employee benefit plans,
medical insurance plans, life insurance plans, disability income plans,
retirement plans, vacation plans, expense reimbursement plans and other benefit
plans which we may from time to time have in effect for all or most of our
senior executives.





We also
have an employment agreement in place with Mr. Slusarczyk that retains him
through February 4, 2013. According to the terms of the agreement, Mr.
Slusarczyk will receive a starting base salary of $240,000 per year, with a 20%
increase each year on the anniversary of his employment agreement. Mr.
Slusarczyk may also receive an annual bonus, payable quarterly equal to 1% of
all gross revenues, and will be entitled to participate in any standard employee
benefit plans, medical insurance plans, life insurance plans, disability income
plans, retirement plans, vacation plans, expense reimbursement plans and other
benefit plans which we may from time to time have in effect for all or most of
our senior executives.





28
 Table of Contents




We also
have an employment agreement in place with Harvey Katz that retains him through
March 24, 2011. According to the terms of the agreement, Dr. Katz will receive a
starting base salary of $80,000 per year, for the first year of his employment,
up to $120,000 for the second year of his employment, and up to $150,000 for the
third year of his employment, with raises in base salary being based on revenues
from equipment sales in the previous year. He will also receive royalties of 1⁄4%
to 1% of gross sales and a one-time bonus for any new products developed by him
while in our employ, and will be entitled to participate in any standard
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans, retirement plans, vacation plans, expense reimbursement
plans and other benefit plans which we may from time to time have in effect for
all or most of our employees.





We also
have an employment agreement in place with Claudia Iovino that retains her
through March 24, 2011. According to the terms of the agreement, Mrs. Cohen will
receive a starting base salary of $48,000 per year, for the first year of her
employment, up to $60,000 for the second year of her employment, and up to
$72,000 for the third year of her employment, with raises in base salary being
based on revenues from equipment sales in the previous year. She will also
receive royalties of 1⁄4% to 1% of gross sales and a one-time bonus for any new
products developed by her while in our employ, and will be entitled to
participate in any standard employee benefit plans, medical insurance plans,
life insurance plans, disability income plans, retirement plans, vacation plans,
expense reimbursement plans and other benefit plans which we may from time to
time have in effect for all or most of our employees.




Stock
Option Plans





We did
not have a stock option plan in place as of March 31, 2008, and we have not
adopted one subsequent to the reporting period as of the date of this report
filed on form 10-K.





Item
12.  Security Ownership of Certain Beneficial Owners and Management
and RelatedStockholder
Matters





The
following table sets forth certain information known to us with respect to the
beneficial ownership of our Common Stock as of the effective date of the Merger
by (1) all persons who are beneficial owners of 5% or more of our voting
securities, (2) each director, (3) each executive officer, and (4) all directors
and executive officers as a group. The information regarding beneficial
ownership of our common stock has been presented in accordance with the rules of
the Securities and Exchange Commission. Under these rules, a person may be
deemed to beneficially own any shares of capital stock as to which such person,
directly or indirectly, has or shares voting power or investment power, and to
beneficially own any shares of our capital stock as to which such person has the
right to acquire voting or investment power within 60 days through the exercise
of any stock option or other right. The percentage of beneficial ownership as to
any person as of a particular date is calculated by dividing (a) (i) the number
of shares beneficially owned by such person plus (ii) the number of shares as to
which such person has the right to acquire voting or investment power within 60
days by (b) the total number of shares outstanding as of such date, plus any
shares that such person has the right to acquire from us within 60 days.




29
 Table of Contents




Including
those shares in the tables does not, however, constitute an admission that the
named stockholder is a direct or indirect beneficial owner of those shares.
Unless otherwise indicated, each person or entity named in the table has sole
voting power and investment power (or shares that power with that person’s
spouse) with respect to all shares of capital stock listed as owned by that
person or entity.





Except as
otherwise indicated, all Shares are owned directly and the percentage shown is
based on 24,559,300 Shares of Common Stock issued and outstanding as of the
effective date of the Merger. Addresses for all of the individuals listed in the
table below are c/o Blue Earth Solutions, Inc., 13511 Granville Ave., Clermont,
FL 34711.








Title
      of class
            Name
      and addressof
      beneficial owner (1)
            Amount
      ofbeneficial
      ownership
            Percentof
      class(2)Current
      Executive Officers & Directors:Common
            Patricia
      Cohen
            9,214,506
      Shares
            37.52%Common
            Paul
      Slusarczyk
            9,214,506
      Shares
            37.52%Common
            Sharon
      Slusarczyk
            0
      Shares
            0.00%Common
            Harvey
      Katz
            3,780,000
      Shares
            13.42%(3)Total
      of All Current Directors and Officers:More
      than 5% Beneficial OwnersCommon
            Claudia
      and Nic Iovino
            2,520,000
            9.35%(4)




(1)
            Includes
      shares held directly with sole voting and investment power, unless
      otherwise indicated.(2)
            Includes
      shares subject to stock options and warrants that are held by the
      individual and exercisable within 60 days.(3)
            Includes
      3,600,000 shares underlying 240,000 shares of our convertible Series A
      Preferred Stock beneficially held by Harvey Katz.(4)
            Includes
      2,400,000 shares underlying 160,000 shares of our convertible Series A
      Preferred Stock beneficially held by Claudia and Nic
    Iovino.





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





With the
exception of the Merger, none of our directors or executive officers, nor any
proposed nominee for election as a director, nor any person who beneficially
owns, directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction over the last two years or in any presently proposed transaction
which, in either case, has or will materially affect us.





Item 14.   Principal Accountant Fees and
Services





Below is
the table of Audit Fees (amounts in US$) billed by our auditor in connection
with the audit of the Company’s annual financial statements for the years
ended:





Financial
      Statements for the Year Ended March 31
            Audit
      Services
            Audit
      Related Fees
            Tax
      Fees
            Other
      Fees2008
            3,500
            $0
            $0
            $02007
            0
            $0
            $0
            $0




PART IV




Item 15.   Exhibits





Exhibit
      Number
            Description3.1
            Articles
      of Incorporation, as amended (1)3.2
            Bylaws,
      as amended (1)10.1
            Employment Agreement of Paul
    Slusarczyk10.2
            Employment Agreement of Harvey
Katz10.3
            Employment Agreement of  Claudia
    Iovino31.1
            Certification
      of Chief Executive Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            Certification
      of Chief Financial Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002





(1)
            Incorporated
      by reference to the Registration Statement on SB-2 filed with the
      Securities and Exchange Commission on February 5, 2007.  On May
      16, 2008, we further amended our articles and bylaws solely to reflect the
      change in the Company’s name to “Blue Earth Solutions,
    Inc.”




30
 Table of Contents




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.





Blue
Earth Solutions, Inc.





By:
            /s/Patricia
CohenPatricia
      Cohen
              Chief
      Executive Officer, Director

                June
      26, 2008








By:
            /s/Paul
  SlusarczykPaul
      Slusarczyk
              Chief
      Financial Officer, Director
              June 26,
2008




By:
            /s/Sharon
  SlusarczykSharon
      Slusarczyk
              Director

                June
      26, 2008




By:
            /s/Harvey KatzHarvey
      Katz
              Director

                June
      26, 2008