UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 FOR THE YEAR ENDED DECEMBER 31,
2008





Commission
File Number: 000-51213





ECOLOCAP
SOLUTIONS INC.


(Exact
Name of Small Business Issuer as specified in its charter)





NEVADA


(State or
other Jurisdiction of


Incorporation
or Organization)





740,
St-Maurice Street


Suite
102


Montreal
H3C 1L5


(Address
of principal executive offices)





514-876-3907


(Issuer’s
telephone number, including area code)





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 15(d) of the Act:


Yes
[  ]  No [X]





Indicate
by check mark whether the registrant (1) has filed all reports required 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
Regulations 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, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 if the
Exchange Act.





Large
      Accelerated Filer
            [  ]
            Accelerated
      Filer
            [  ]


Non-accelerated
      Filer
              [  ]
              Smaller
      Reporting Company
              [X](Do
      not check if a smaller reporting company)







Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the 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
sold, or the average bid and asked price of such common equity, as of March 31,
2009 - $3,492,831








TABLE
OF CONTENTS





PagePART
      IItem
      1.
            Business.
            3Item
      1A.
            Risk
      Factors.
            12Item
      1B.
            Unresolved
      Staff Comments.
            15Item
      2.
            Properties.
            15Item
      3.
            Legal
      Proceedings.
            15Item
      4.
            Submission
      of Matters to a Vote of Security Holders.
            15PART
      IIItem
      5.
            Market
      Price for the Registrant’s Common Equity, Related Stockholders Matters
      and
            16Issuer
      Purchases of Equity Securities.Item
      6.
            Selected
      Financial Data.
            18Item
      7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation.
            18Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk.
            22Item
      8.
            Financial
      Statements and Supplementary Data.
            24Item
      9.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
            36Item
      9A.
            Evaluation
      of Disclosure Controls and Procedures.
            36Item
      9B.
            Other
      Information.
            38PART
      IIIItem
      10.
            Directors
      and Executive Officers, Promoters and Corporate
Governance.
            38Item
      11.
            Executive
      Compensation.
            42Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and
      Related
            43Stockholder
      Matters.Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence.
            45Item
      14.
            Principal
      Accounting Fees and Services.
            45PART
      IVItem
      15.
            Exhibits
      and Financial Statement Schedules.
            47














2


PART
I.





ITEM
      1.
            BUSINESS.





EcoloCap Solutions Inc. is in the
business of reducing carbon emissions. We plan to
develop  economically feasible renewable energy and carbon reduction
initiatives.





History
of the Business





We were incorporated in the State of
Nevada on March 18, 2004, as Cygni Systems Corporation. We were originally
formed with the intent of raising funds and entering into business as a software
design company. From the date of our incorporation until June 17, 2005, we were
in the development stage of online and network security management software and
online and network security consulting services.





A change of control occurred on June
17, 2005. On August 19, 2005, we entered into and closed a Share Exchange
Agreement (the "XL Share Exchange Agreement") with XL Generation AG. Pursuant to
the terms of the XL Share Exchange Agreement, we acquired all of the issued and
outstanding shares of common stock of XL Generation AG. On August 23, 2005, we
filed a Certificate of Amendment with the State of Nevada, changing our name to
"XL Generation International Inc."





XL Generation was the holding company
of a Swiss entity, XL Generation AG, which was the marketer of an artificial
sport surface called “XL Turf.”  We aspired to become a leading global
force in the artificial turf and flooring markets by building both the strength
of the XL brand and strategic partnerships with key regional turf and flooring
providers. Our vision was to develop a variety of products other than for
sports, aimed at all types of play space, including for landscape and
playgrounds. Due to litigation and because of the severe deterioration of our
brand name and the poor quality of the products produced at XL Generation AG’s
request by its subcontract manufacturer, who produce a poor quality which did
not meet the specifications XL Generation AG requested. Also for each shipment
the quality surveyor’s at the production plant failed causing enormous
deterioration of the brand name XL Turf and XL Generation AG in particular in
the European market., our board of directors decided that it was in our best
interest to initiate a complete and total withdrawal from the artificial
flooring sector, artificial turf and all related business.





Following our withdrawal from the
artificial flooring sector, artificial turf and all related business and after
identifying new business opportunities, we changed our name from “XL Generation
International Inc.” to “Ecolocap Solutions Inc.”





On November 13, 2007, we filed a
Certificate of Amendment with the State of Nevada, changing our name to
"EcoloCap Solutions Inc." Our shares of common stock are traded on the Bulletin
Board operated by the Financial Industry Regulatory Authority under the symbol
ECOS.





Change
in Shell Company Status





Since November 2007, the Company
changed its orientation (mission) and is now going into CER (Carbon Emission
Reduction) credits. The Company changed its name to Ecolocap Solutions in
December 2007. The Company has hired a new CEO. The Company has 5 employees and
has over 25 employees through subcontracting of part of its development work
(scouting, projects documentation work, contracts negotiations).





The Company has signed a new lease and
has moved to new offices and the Company has revised and reconstructed its web
site: Ecolocap.com.





3


Our
Business





We are engaged in the business of
reducing carbon emission.





EcoloCap's
business is to prepare documentations for CER projects under Clean Development
Mechanisms following the signing of a ERPA (Emission Reduction Purchase
Agreement) contracts.





Over the
last months, Ecolocap Solutions management team has organized and developed the
Company in three main activity sectors:





Our
Current Operations





During
the past year, management has done a market study to identify and to locate
countries which represent greatest potentials for CER development. The results
from the study suggested concentrating our effort on Asia, specifically in
Vietnam and China . In order to be able to benefit from the purchasing and
selling of carbon credits, the main operation of the Company has to be generated
from a country that is signatory of the Kyoto Protocol. The Company has thus
created a Canadian subsidiary for the realization of CDM-Kyoto projects
(EcoloCap Solutions Canada).





EcoloCap
Solutions Canada has negotiated with a prominent Chinese organization and
through various meetings that lead to the establishment of a Joint Venture. The
objective of the JV is to scout and develop CER projects in China. The Venture
is named Ecolocap (Beijing) International Investment and Consultation Inc.
During the past year, Ecolocap Solutions CEO has concerted with Chinese JV
partners to identify and to evaluate potential CER projects which lead to a
first 50 potential customer list. Before going to proceed farther with these
potential project owners, Ecolocap Solutions management had provided several
training sessions for the JV personnel on the CDM and the CER business. Ecolocap
management has spent more than 2 months on direct training and over the phone
and email training session. After various discussions and analysis the potential
customer list was reduced to 25. We then built a questionnaire used to gather
technical and financial project information in regard with the CDM (Clean
Development Mechanism) requirements. This questionnaire serves as the first step
in the projects analysis process. It enables to eliminate and retain projects
that are worthy of exhaustive investigation. The questionnaire was sent to 25
project owners. Following the analysis of the information gathered, we started
planning sites visits. In the past six months our CEO joint by JV representative
has visited over 25 potential sites, of which 8 ERPA (Emission Reduction
Purchase Agreement) contracts have been signed by EcoloCap Solutions
Canada.





In order
to develop the Vietnamese market, EcoloCap Solutions Canada has identified a few
Vietnamese potential partners. After various meetings, negotiations and
telephone conversations, we retained the services of a scouting agency. A one
year, renewable contract was signed with BEWTE, for identifying, negotiating and
developing CDM projects in Vietnam.
















4


Since the
signature of the scouting contract, BEWTE has identified 40 potential CER
projects in Vietnam. Ecolocap Solutions management has provided training session
to the scouting agency personnel on the CDM and the CER business. We spent more
than 2 month on training directly and over the phone and email training session.
After various discussions and analysis the list was reduced to 20 projects. A
questionnaire was sent to 20 project owners. The questionnaire serves as the
first step in projects analysis. It enables to eliminate and retain projects
that are worthy of further investigation. Once the questionnaire information
analyzed, site visits have been organized. During the past six months our CEO,
accompanied by BEWTE personnel, have visited over 20 potential sites. Of those
visits, EcoloCap Solutions Canada has signed which 11 ERPA (Emission Reduction
Purchase Agreement) contracts.





Technical
Support





The most
important part of developing a CER project is to establish and document the
validity and the financial additionality of the project – that element which
demonstrate that the carbon emission reduction project would


not have
otherwise occurred. It is also essential to document and to verify the
methodologies applied, as outlined in the project development
document.





Ecolocap
Solutions has hired technical scientist and engineers whose roles and
responsibilities are to help the projects developers in preparing, building and
validating these projects. They must also research and validate the
methodologies applied. Our technical staff  has reviewed and analyzed
25 projects in China and 20 projects in Vietnam, with the help and support of
the JV personnel in China and the forces of the scouting Agency in Vietnam, who
helped gathering and assemble the information needed. After intensive review,
decision was made to focus our attention on eleven CER projects in Vietnam and
eight projects in China.





Ecolocap
Solutions CEO went back to Vietnam and China to start discussions and
negotiations for the retained projects. After a few trips, discussions and
negotiations that occurred over the past six months, 11 ERPA (Emission Reduction
Purchase Agreement) contracts were signed in Vietnam and 8 ERPA (Emission
Reduction Purchase Agreement) contracts were signed in China.





For each
CER project, the documentation process includes the following steps; preparation
of the project’s PIN (Project Idea Note) which consist of preparing a
description of the project and the applied technology, verifying if it is
acceptable under the criteria of the Kyoto Protocol. Once completed, the PIN is
presented to the local authority (Designated National Authority (DNA)) of the
country which the project is located for approval. Following the approval of the
PIN, starts the preparation of the PDD (Project Design Document). In the PDD, we
prepare detailed description and documentation of the project, technical and
financial information. This step requires identification and meetings with
consultants and suppliers which will prepare costs estimate and will make
technical proposition for the project. After the completion of the PDD, the
document will be presented to the Designated Operating Entity (DOE), who will
validate the   technical, financial additionality and methodology
of the project. After going through the DOE approval the Project’s PDD will be
presented to the EB (Executive Board) who will give the final registration of
the project.





As of
March 31, 2009, 3 PIN have been approved by The Vietnamese DNA. Ecolocap has
also prepared 3 PIN in China and started the work on the PDD for 3
projects.





5


Financing,
Project financing and CER sales





In order to help CER project owners and
to accelerate the project development, Ecolcoap Solutions has started
discussions with potential investors, brokers and CER buyers. On October 13,
2008  EcoloCap Solutions has entered into an exclusive Greenhouse Gas
Offset Management Services Representation Agreement to work towards and
marketing EcoloCap's growing portfolio of potential Certified Emission
Reductions (CERs) and pre-Clean Development Mechanism (CDM) Verified Emission
Reductions (VERs) with CANTOR CO2  LLC.





EcoloCap
Solutions has also, over the past two months, been negotiating the terms of a
project financing, support and registration with a major CER
broker.





In
October 2008 a LOI was executed by and between Ecolocap Solutions (Canada) Inc.
(ECOS), the Company's wholly owned subsidiary, and Heibe Xinneng Power Co., Ltd.
(GuanTao), the parties entered into a Technical Service Agreement by which ECOS
will make its best effort to assist Guantao in the financing and registration
process of its project by the DOE and the EB. ECOS has consequently entered in
the process of negotiating with foreign investors to get financial participation
in this project. As of March 31, 2009, Ecolocap Solutions has identified a
financing source for the project. Negotiations are now under way; a financing
arrangement has been presented and accepted by all parties involved, which
should be concluded next month.





Over the
last six months Ecolocap Solutions has also signed a Fiscal Agent Agreement with
Cornerstone Capital Corp. for the purpose of identifying and introducing the
Company to potential sources of debt and/or equity financing. Ecolocap Solutions
has actually made several presentations, discussions and meetings with potential
investors to obtain investment in the Company’s equity.





In return
for the preparation of documentations, EcoloCap will receive a commission
corresponding to a % of the revenues on the sale to the broker of the CER of the
project. Also, as define in the ERPA (Emission Reduction Purchase Agreement)
contracts, EcoloCap will guaranty a fix selling price (below future market
selling price) of CER to the owner of a project. EcoloCap will receive
revenue from the difference between the market selling price and
the


guarantied
fix selling price to the project owner. The preparation of documents, the
completion of a project may spread over a 12-18 months period before the
project generates any revenues.





Kyoto Protocol & Voluntary
Markets





The Kyoto Protocol established various
exchange mechanisms in order to achieve its targeted reduction in carbon
emission. As both world populations and economies continue to grow, substantial
changes in energy use as well as advances in efficiency and technological
innovations will be required in order to fight the global warming of the earth
phenomenon and help reduce pollutant emissions.  It is from this
global movement that the Kyoto Protocol was born, bringing new words and new
concepts such as Carbon Markets, Carbon Finances, Carbon Credits and Carbon
Trading.  Adopted in 1997, the Kyoto Protocol requires that
industrialized countries agree to limit their Greenhouse Gases (GHG) emissions
in the period 2008-2012 at 5.2% below their 1990 emissions
levels.  Increasingly, countries and companies not bound by Kyoto
Protocol are voluntarily creating national schemes and offsetting their
emissions associated to their normal activities as part of their corporate
responsibility.





Under Kyoto, carbon credits are
acquired by organizations and governments to comply with their emission
reduction target set under the Kyoto Protocol or other compliance initiatives
(for example, the EU Emission Trading Scheme). Carbon trading takes place
following a cap and trade approach, which is an administrative approach used to
control pollution by providing economic incentives for achieving reductions in
the emissions of pollutants.




6





Two project-based mechanisms were
designed to lower the overall cost of participating countries in meeting their
domestic emission reduction targets and to help developing countries and
countries in transition in their sustainable development by encouraging
technology transfer:





Clean
Development Mechanisms (CDM)





A project-based financing mechanism,
where eligible developed countries may purchase carbon credits - Certified
Emission Reductions (CERs) - generated by projects hosted in developing
countries. Purchasing these credits may be done either to fulfill compliance
requirements, or for investment purposes, as is the case for US
companies.





Joint
Implementation (JI)





It encourages the realization of
emissions abatement and the issuance of carbon credits - Emission Reduction
Units (ERUs) - by the implementation of projects by a developed country (or
entity) in another developed country.  Outside Kyoto, organizations
around the world have started to use carbon credits as a voluntary way to reduce
their carbon emissions. This has created a voluntary carbon credit market (for
example, the Chicago Climate Exchange) which has seen rapid growth in the past 3
years, driven primarily by increasing public awareness of climate
change.





The Kyoto Protocol established various
exchange mechanisms in order to achieve its targeted reduction in carbon
emission .One of these mechanisms is the Clean Development Mechanism or CDM,
which is an investment or activity in a developing country that reduces
emissions of Greenhouse gases. The carbon credits resulting from CDM projects,
referred to as Certified Emission Reductions (CERs) may then be sold to
governments or companies in the industrialized world, allowing them to meet
their Kyoto compliance targets





In addition to the targets set by
Kyoto, countries and companies not bound by the Kyoto Protocol are voluntarily
creating national schemes and offsetting their emissions associated to their
normal activities as part of their corporate responsibility.





Our
Vision & Mission Statement





Our vision is to be recognized as a
leading provider of emission reduction solutions, ecotechnologies and services
which generate financial gains from greenhouse gas emissions
reduction.





Our mission is to build a best in class
portfolio of solutions, technologies and services leading to the generation of
carbon credits earned from the reduction of fugitive emissions thereby achieving
greenhouse gas emissions reduction goals with a positive economic
impact.





We are
also in the business of preparing documentations for CER projects under Clean
Development Mechanisms following the signing of a ERPA (Emission Reduction
Purchase Agreement) contracts.













7


Our
Approach





Recognizing the opportunity these new
mechanisms represent, we are developing an integrated development approach that
focuses upon both existing and needed infrastructure facilities to produce
substantial new value in the form of tradable CERs while at the same time
maximizing alternative energy generation co-products. Our partners with owners
of facilities emitting the harmful greenhouse gas as well as with all other
environmental projects’ owners in developing countries, to capitalize on the
opportunities afforded by the emerging market in carbon credit trading turning
potential liabilities into lucrative resources while maximizing available
possibilities for clean and renewable energy production.





Webring together all the
elements - capital, engineering, network and know-how - required to successfully
operate in the emerging carbon market; our integrated solutions gives us the
necessary flexibility to develop stand alone or joint venture carbon
projects.





During
the past year, management has done a market study to identify and to locate
countries which represent greatest potentials for CER development. The results
from the study suggested concentrating


our
effort on Asia, specifically in Vietnam and China, two countries that have
ratified the Kyoto Protocol. In order to be able to benefit from the purchasing
and selling of carbon credits, the main operation of the Company has to be
generated from a country that is signatory of the Kyoto Protocol. The Company
has thus created a Canadian subsidiary for the realization of CDM-Kyoto projects
(EcoloCap Solutions Canada).





The most
important part of developing a CER project is to establish and document the
validity and the financial additionality of the project – that element which
demonstrate that the carbon emission reduction project would not have otherwise
occurred. It is also essential to document and to verify the methodologies
applied, as outlined in the project development document.





Ecolocap
Solutions has hired technical scientist and engineers whose roles and
responsibilities are to help the projects developers in preparing, building and
validating these projects. They must also research and validate the
methodologies applied.





For each
CER project, the documentation process includes the following steps; preparation
of the project’s PIN (Project Idea Note) which consist of preparing a
description of the project and the applied technology, verifying if it is
acceptable under the criteria of the Kyoto Protocol. Once completed, the PIN
is


presented
to the local authority (Designated National Authority (DNA)) of the country
which the project is located for approval. Following the approval of the PIN,
starts the preparation of the PDD (Project Design Document). In the PDD, we
prepare detailed description and documentation of the project, technical and
financial information. This step requires identification and meetings with
consultants and suppliers which will prepare costs estimate and will make
technical proposition for the project. After the completion of the PDD, the
document will be presented to the Designated Operating Entity (DOE), who will
validate the   technical, financial additionality and methodology
of the project. After going through the DOE approval the Project’s PDD will be
presented to the EB (Executive Board) which represents UNFCCC (organism
representing the Kyoto signatories’ countries ) who will give the final
registration of the project.





In return
for the preparation of documentations, EcoloCap will receive a commission
corresponding to a % of the revenues on the sale to the broker of the CER of the
project. Also, as defined in the ERPA (Emission Reduction Purchase Agreement)
contracts, EcoloCap will guaranty a fix selling price (below future market
selling price) of CER to the owner of a project. EcoloCap will thus receive
revenue from the difference between the market selling price and the guarantied
fix selling price to the project owner. The preparation of documents, the
completion of a project may spread over a 12-18 months period before the
project generates any revenues.





8


Emission
Trades





An emission trade typically occurs when
a country or company seeking to meet its emissions allowances purchases
emissions credits from a country or company that has reduced its emissions
beyond its requirement to do so. This transaction can benefit both participants.
Purchasers are able to reach goals that require more emissions reductions than
they can cost-effectively achieve through their own operational changes and they
do not then incur financial penalties. Sellers are rewarded financially for
their investments in emission reductions.





Regulation





Our
CER operations are subject to the CDM mechanism of the Kyoto Protocol as well as
to national policies and regulations of countries which are signatories of this
Protocol.





Acquisitions





We plan
to sign other ERPA in the future. We have not identified any additional
acquisitions at this time.





Competition





In our
business, we will compete with other businesses that generate, buy and sell CER
(CER aggregator or consultants). The markets in which we do business are highly
competitive. In the market in which we operate, there are many competitors, some
of which are significantly larger, have access to much more important resources
or capital than us, or have established reputations among potential
customers.





Operative
Agreements





Prerequisites
to work on an ERPA, is for the project owners to implement their project and
implies in a lot of cases to find proper financing. In order to help CER project
owners and to accelerate the project development, during the last six months
Ecolocap Solutions has discussed with numerous potential investors, brokers and
CER buyers.





On May 26, 2008, Ecolocap Solutions
(Canada) Inc. (AECOS), the Company's wholly owned subsidiary has executed an
Emission Reduction Purchase Agreement (ERPA) with Tan Hiep Phuc Electricity
Construction Joint-Stock Company for the purchase of the 50,000 units of
certified CER anticipated to be generated per year by the Tien Giang 10 MW Fired
Rice Husk Power Plant CDM Project Proponent for the period from June, 2008 to
December 31, 2019;





On June 10, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Lao Cai Energy & Resources
Investment Joint-Stock Company, Viet Nam for the purchase of the 50,000 units of
certified CER anticipated to be generated per year by the Nam Xay Noi Hydro
Power CDM Project Proponent for the period from June 10, 2008 to December 31,
2012. ECOS has an option of extension for two additional periods of seven years,
from 2013 to 2026, under the same terms with the exception of the price per unit
that would need to be renegotiated;





9


On June 10, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Tuan Anh Hydraulic Development
and Construction Investment Corporation, Viet Nam (Tuan Anh HDC., Corp.) for the
purchase of the 50,000 units of certified CER anticipated to be generated per
year by the Ban Nhung Hydro Power CDM Project Proponent for the period from June
10, 2008 to December 31, 2012. ECOS has an option of extension for two
additional periods of seven years, from 2013 to 2026, under the same terms with
the exception of the price per unit that would need to be
renegotiated;





On July 14, 2008, ECOS executed an
Emission Reduction Purchase Agreement ( RPA  with Hunan Valin Xiangtan
Iron & Steel Co., Ltd. for the purchase of the certified CER anticipated to
be generated per year by the XISC Power Generation Using Steam from Coke Dry
Quenching Project for the period from July 23, 2008 toDecember 31, 2012. ECOS
has a right of first refusal to renegotiate the ERPA for the extension period
between 2013 to 2026. The terms of the ERPA would need to be
renegotiated;





On July 14, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Xiangtan Iron & Steel
Group Co., Ltd. (XISC) for the purchase of the 148.621 units of certified CER
anticipated to be generated per year by the XISC Power Generation Using Waste
Heat from Sintering System (WHR) for the period from July 14, 2008 to December
31, 2012. ECOS has an option of extension for two additional periods of seven
years, from 2013 to 2026, under the same terms with the exception of the price
per unit , which would need to be renegotiated;





On July 20, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Hebi Coal Industry (Group)
Co., LTD (HCIC) for the purchase of the certified CER anticipated to be
generated per year by the XCIC Project-Using Waste Heat from Gangue Brickkiln to
Generate Power (WHR) for the period from July 20, 2008 to December 31, 2012.
ECOS has an option of extension for two additional periods of seven years, from
2013 to 2026, under the same terms with the exception of the price per unit,
which would need to be renegotiated;





On July 23, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Hebei Jinlong Cement Group
Co., Ltd (HJLCC) for the purchase of the certified CER anticipated to be
generated per year by the HJLCC Project-Using Waste Heat from Cement Kiln to
Generate Power for the period from July 31, 2008 to December 31, 2012. ECOS has
an option of extension for two additional periods of seven years,
from


2013 to
2026, under the same terms with the exception of the price per unit, which would
need to be renegotiated;





On August 5, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Bao Tan Hydro Electric
Joint-Stock Company for the purchase of the certified CER anticipated to be
generated per year by Dam Bor Hydro Power for the period from 2008 to 2012,
evaluated at 24,000 units of CERs per year. The crediting period is expires on
December 31st, 2026. ECOS has an option of extension for two additional periods
of seven years, from 2013 to 2026, under the same terms with the exception of
the price per unit, which would need to be renegotiated;





On August 5, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Construction and
Infrastructure Development Joint-Stock Company Number Nine for the purchase of
the 50,000 units of certified CER anticipated to be generated per year by the
Then Sin Hydro Power project for the period from August 2nd, 2008 to December
31, 2012. The crediting period is up expires on December 31st, 2026. ECOS has an
option of extension for two additional periods of seven years, from 2013 to
2026, under the same terms with the exception of the price per unit, which would
need to be renegotiated;





10


On October 17, 2008, ECOS executed an
Emission Reduction Purchase Agreement (RPA with Xinjiang Xiangjianfeng Energy
and Technology Development Co., Ltd. for the purchase of the certified CER
anticipated to be generated per year by the Xinjiang Xiangjianfeng Urumqi
Dabancheng 200MW Windfarm 1st Phase-49.5MW project for the period from October
17, 2008 to December 31, 2012. The crediting period expires on December 31st,
2026. ECOS has an option of extension for two additional periods of seven years,
from 2013 to 2026, under the same terms with the exception of the price per
unit, which would need to be renegotiated;





On October 19, 2008, ECOS executed an
Emission Reduction Purchase Agreement (ERPA) with Hebei Fengda Metallized Pellet
Co., Ltd. for the purchase of One Million units of certified CER anticipated to
be generated per year by the Hebei Fengda Metallized Pellet project for the
period from October 19, 2008 to December 31, 2012. The crediting period is
expires on December 31st, 2026. ECOS has an option of extension for two
additional periods of seven years, from 2013 to 2026, under the same terms with
the exception of the price per unit, which would need to be
renegotiated;





On October 21, 2008, ECOS executed an
Emission Reduction Purchase Agreement (RPA with Shandong Chengzeyuan Environment
Protection Engineering Co., Ltd. for the purchase of the certified CER
anticipated to be generated per year by the Treatment of Urban Domestic Refuse
and Resource Utilization in Pingyuan Country project for the period from October
21, 2008 to December 31, 2012. The crediting period expires on December 31st,
2026. ECOS has an option of extension for two additional periods of seven years,
from 2013 to 2026, under the same terms with the exception of
the price per unit , which would need to be renegotiated ;





On October 23, 2008, ECOS has executed
an Emission Reduction Purchase Agreement (ERPA) with Leshan Kingssun Group Co.,
Ltd. for the purchase of the certified CER anticipated to be generated per year
by the Huangdan Hydro-station Technical Expansion & Automation Retrofit
project for the period from October 23, 2008 to December 31, 2012. The crediting
period expires on December 31st, 2026. ECOS has an option of extension for two
additional periods of seven years, from 2013 to 2026, under the same terms with
the exception of the price per unit, which would need to be
renegotiated;





The ERPA agreements provide that for
each project, ECOS will endeavor to work on and deliver a detailed description
of the project submitted for validation prepared in accordance with the Kyoto
Rules (PDD) and other documents describing the implementation and economics of
the project at its own risk and expense.





Execution
of 4 Technical Service Agreements





In conjunction with the October 17th,
2008 Emission Reduction Purchase Agreement (ERPA) executed by and between
Ecolocap Solutions (Canada) Inc. (ECOS), the Company's wholly owned subsidiary,
and Xinjiang Xiangjianfeng Energy and Technology Development Co., Ltd.
(Xinjiang), the parties entered into a Technical Service Agreement by which ECOS
will perform for Xinjiang the necessary technical services for the validation of
its CDM projects. In consideration of these services rendered as well as
expenses incurred, ECOS will be paid a professional fee. ECOS will be
responsible for the preparation of the technical documents and will make its
best effort to assist Xinjiang in the approval process of these projects by
local authorities as well as by the DOE and the EB. All the expenses incurred
above will be borne by ECOS. ECOS will use its best effort to help Xinjiang get
financial participation of foreign investors in the Projects.













11


In conjunction with the October 19th,
2008 Emission Reduction Purchase Agreement (ERPA) executed by and between
Ecolocap Solutions (Canada) Inc. (ECOS), the Company's wholly owned subsidiary,
and Hebei Fengda Metallized Pellet Co., Ltd. (FENGDA), the parties entered into
a Technical Service Agreement by which ECOS will perform for FENGDA the
necessary technical services for the validation of its CDM projects. In
consideration of these services rendered as well as expenses incurred, ECOS will
be paid a professional fee. ECOS will be responsible for the preparation of the
technical documents and will make its best effort to assist FENGDA in the
approval process of these projects by local authorities as well as by the DOE
and the EB. All the expenses incurred above will be borne by ECOS. ECOS will use
its best effort to help FENDGA get financial participation of foreign investors
in the projects.





In conjunction with the October 21st,
2008 Emission Reduction Purchase Agreement (ERPA) executed by and between
Ecolocap Solutions (Canada) Inc. (ECOS) the Company's wholly owned subsidiary
and Shandong Chengzeyuan Environment Protection Engineering Co., Ltd. (SHANDONG,
the parties entered into a Technical Service Agreement by which ECOS will
perform for SHANDONG the necessary technical services for the validation of its
CDM projects. In consideration of these services rendered as well as expenses
incurred, ECOS will be paid a professional fee. ECOS will be responsible for the
preparation of the technical documents and shall make its best effort to assist
SHANDONG in the approval process of these projects by local authorities as well
as by the DOE and the EB. All the expenses incurred above will be borne by ECOS.
ECOS will use its best effort to help SHANDONG get financial participation of
foreign investors in the projects.





In conjunction with the October 23rd,
2008 Emission Reduction Purchase Agreement (ERPA) executed by and between
Ecolocap Solutions (Canada) Inc. (ECOS) the Company's wholly owned subsidiary
and Leshan Kingssun Group Co., Ltd. (LESHAN), , the parties entered into a
Technical Service Agreement by which ECOS will perform for LESHAN the necessary
technical services for the validation of its CDM projects. In consideration of
these services rendered as well as expenses incurred, ECOS will be paid a
professional fee. ECOS will be responsible for the preparation of the technical
documents and shall make its best effort to assist LESHAN in the approval
process of these projects by local authorities as well as by the DOE and the EB.
All the expenses incurred above will be borne by ECOS. ECOS will use its best
effort to help LESHAN get financial participation of foreign investors in the
Projects.





Effective as of October 9, 2008, we
entered into a Consulting Agreement (the ““Agreement””) with Lakeview Consulting
LLC to provide us with consulting services relating to management, advisement,
strategic planning, marketing and investor and shareholder services. The
Agreement has a one year term, and for its services Lakeview will be receiving
one million restricted shares of our common stock. Our Board of Directors has
ratified the execution of the Agreement as of October 28, 2008.





Dated as of October 13, 2008 and
effective as of October 21, 2008, Ecolocap Solutions Inc. (“EcoloCap”) and
Cantor CO2e LLC and its affiliates (“CantorCO2e”) entered into an exclusive
Greenhouse Gas Offset Management Services Representation Agreement to work
towards and marketing EcoloCap’s growing portfolio of potential Certified
Emission Reductions (CERs) and pre-Clean Development Mechanism (CDM) Verified
Emission Reductions (VERs).





ITEM
1A.                      RISK
FACTORS





We were unsuccessful in manufacturing artificial surfaces, and we
have changed our business direction from manufacturing artificial surfaces to
reducing carbon emission.





We
were unsuccessful in our original business endeavor of manufacturing artificial
surfaces. There can be no assurance that we will be successful in our new
business direction of reducing carbon emission. As such you could lose your
investment.


12


Our proposed
business is speculative and we have just begun operations in reducing carbon
emission.





Our plan
of operation is speculative. Although we have appointed officers and directors,
they do not have a vast experience in reducing carbon emission; we currently
have one officer that has experience in carbon emission. The likelihood of
achieving our plans is remote, and it is possible that you could lose your
entire investment.





Need
for substantial additional capital.





We
are in need of substantial additional capital, without which our ability to
continue as a going concern will be jeopardized. In order to fund our ongoing,
day-to-day operations, as well as to develop the ERPA contracts, we will
continue to require significant amounts of additional capital, and the failure
to obtain such additional capital will materially adversely affect our
operations. In order to fully implement our plan of operation, it will be
necessary to raise at least an additional $2,000,000. There is no assurance that
we will be successful in raising additional capital. If we raise additional
capital through the sale of common stock, you could experience significant
dilution. If we are unsuccessful in raising such additional capital, you could
lose your entire investment.





Changes in laws and regulations over which we have no control can
significantly affect our business and results of operations.





Any
Change in the CDM Mechanism policy, any change of governmental entity that
regulates our operations of the concerned country may enact new legislation or
adopt new laws and regulations or policies at any time, and new judicial
decisions may change the interpretation of existing legislation or regulations
at any time





Our reliance on third-party suppliers and service providers poses
significant risks to our business and prospects.





We intend
to contract with third parties for goods and services that will be essential to
our operations, such as preparation of PIN and PDD services. If the scopes of
services or pricing are not commercially reasonable, we may incur additional
costs. For example:




·
            our service providers may fail to properly prepare the PIN and
      PDD and project assessment ( DOE ‘s validation
  )






·
            our
      suppliers and service providers may face preparation delays due to natural
      disasters or strikes, lock-outs or other such
      actions;






·
            one
      or more suppliers or service providers could make strategic changes in the
      services they
      offer; and






·
            some of our
      suppliers will be small companies which are more likely to experience
      financial andoperational difficulties than larger,
      well-established companies, because of their limited financial and
      otherresources.






·
            Administrative
      delay due to the registration with Executive Board of The CDM-Kyoto could
      also result in supplementary delay.




13


As a
result of any of these factors, we may be required to find alternative suppliers
for the services on which we rely. Accordingly, we may experience delays in
obtaining appropriate services on a timely basis and in sufficient time from
such alternative suppliers at a reasonable price, which could delay services to
our customers and adversely affect our revenues, financial condition, and
results of operations, cash flow and liquidity.





Our
auditors have issued a going concern opinion meaning there is substantial
uncertainty whether we will continue operations.





Our
auditors have issued a going concern opinion in their report dated March 31,
2009. This means that, as of the time of the opinion, there was substantial
doubt that we could continue as an ongoing business for the next twelve months.
The financial statements do not include any adjustments that might result from
the uncertainty about our ability to continue in business.





We lack an operating history and have losses that we expect to
continue into the future. There is no assurance our future operations will
result in profitable revenues. If we cannot generate sufficient revenues to
operate profitably, we will cease operations and you will lose your
investment.





Our
recent financial statements may not provide sufficient information to assess our
future prospects. Our likelihood of success must be considered in light of all
of the risks, expenses and delays inherent in establishing a new business,
including, but not limited to, unforeseen expenses, complications and delays,
established competitors and other factors. Irrespective of the quality of
products and skills of management, we may still never achieve profitable
operations.





Because there is an extremely
limited public trading market for our common stock, you may not be able to
resell your stock.





There is
currently an extremely limited public trading market for our common stock, and
there may never be a broad public trading market. Therefore, investors may not
be able to resell their common stock.





We Are Highly Dependent On Our
Executive Management And Other Key Employees. Should We Lose Executive
Management Or Other Key Employees Due To Death, Disability, And Retirement Or
Otherwise, Such Loss Could Adversely Affect Our Management And
Operations.





We rely
heavily on our executive management and key employees to provide services and
for continued business development, including, in particular, our officers and
directors, Mr. Tri Vu Truong, Mr. Michel St-Pierre, Mr. Claude Pellerin, Mr.
Mark Lawson and Mr. Robert Clarke. The Company requires senior management who,
in addition to possessing the appropriate skills, will be required to spend time
in Asia. At the present time, we do not have employment agreements with any of
our officers and directors. Our business could be materially adversely affected
if a number of our executive officers, managers and other key employees were to
leave us and if we were unable to attract and retain qualified
replacements.





Because
the SEC imposes additional sales practice requirements on brokers who deal in
penny stocks, some brokers may be unwilling to trade our shares. This means that
you may have difficulty reselling your shares and this may cause the price of
the shares to decline.





Our
shares would be classified as penny stocks and are covered by Section 15(g) of
the Securities Exchange Act of 1934 and the rules promulgated thereunder which
impose additional sales practice requirements on brokers/dealers who sell our
securities. For sales of our securities, the broker/dealer must make a special
suitability determination and receive from you a written agreement prior to
making a sale for you.


14


Because
of the imposition of these additional sales practices, it is possible that
brokers will not want to make a market in our shares. This could prevent you
from reselling your shares and may cause the price of the shares to
decline.





FINRA
sales practice requirements may limit a stockholder's ability to buy and sell
our stock.





The
Financial Industry Regulation Authority (FINRA) has adopted rules that apply to
broker/dealers in recommending an investment to a customer. The broker/dealers
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative, low-priced securities to their
non-institutional customers, broker/dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative, low-priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for broker/dealers to recommend our common
stock to their customers, which may have the effect of reducing the level of
trading activity and liquidity of our common stock. Further, many brokers charge
higher transactional fees for penny stock transactions. As a result, fewer
broker/dealers may be willing to make a market in our common stock, reducing our
stockholder's ability to resell shares of our common stock.





Because
We Will Be Primarily Dependent Upon One Product, Our Business Will Not Be
Diversified, And We May Not Be Able To Adapt To Changing Market Conditions Or
Endure Any Decline In The Carbon Reduction Emission Industry.





Our
success depends on our ability to sign ERPA with projects owners. We do not have
any other lines of business or other sources of revenue to rely upon if we are
unable to sell CER, or if the market for CER declines. Our lack of
diversification means that we may not be able to adapt to changing market
conditions or to weather any significant decline in the CER
industry.





ITEM
      1B.
            UNRESOLVED
      STAFF COMMENTS





None.





ITEM
      2.
            PROPERTIES





We do not own any real estate. We do
not plan on investing in real estate in the near future. We are currently
renting office space in Montreal, Quebec, Canada for $5,333 per month. The
Company believes that its current office facilities will be sufficient for the
foreseeable future.





ITEM
      3.
            LEGAL
      PROCEEDINGS





We are
not presently a party to any litigation.





ITEM
4.                  SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.











15


PART
II





ITEM
      5.
            MARKET
      PRICE FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
      ISSUER PURCHASES OF EQUITY
SECURITIES





Market Information





Our shares of common stock are traded
on the Bulletin Board operated by the Financial Industry Regulatory Authority
(FINRA) under the symbol ECOS.








The following table sets forth for the
periods indicated the high and low close prices for the Common Shares in U.S.
Dollars. These quotations reflect only inter dealer prices, without retail mark
up, mark down or commissions and may not represent actual
transactions.





Quarter
      Ended
                        
                        High
                        LowMarch
      31, 2009
                        $
                        0.25
                        0.03December
      31, 2008
                        $
                        0.46
                        0.11September
      30, 2008
                        $
                        0.85
                        0.30June
      30, 2008
                        $
                        0.80
                        0.42March
      31, 2008
                        $
                        1.40
                        0.45December
      31, 2007
                        $
                        1.88
                        0.55September
      30, 2007
                        $
                        0.55
                        0.32June
      30, 2007
                        $
                        1.34
                        0.25March
      31, 2007
                        $
                        0.35
                        0.35








Holders





As of March 31, 2009, we had twenty two
stockholders of record.





Dividends





We have never declared or paid cash
dividends. There are currently no restrictions which limit our ability to pay
dividends in the future.





Securities authorized for issuance
under equity compensation plans





On March 30, 2006, we adopted the 2006
Equity Incentive Plan (the “Plan”), effective as of March 24, 2006. Under the
Plan, we may issue options, stock appreciation rights, restricted shares,
deferred shares or performance shares. The maximum number of such shares of our
common stock that may be issued under the Plan is 2,000,000 shares. Our
officers, directors, employees and consultants, as well as those of our
subsidiaries, may participate in the Plan, as our Compensation Committee may
deem to be advisable and in our best interests. No one individual may be awarded
options to purchase more than 500,000 shares in any one fiscal year. No one
individual may be granted more than 250,000 shares in any one fiscal year. The
terms and conditions of each grant shall be as set forth in an award agreement
approved by the Compensation Committee.








16


Equity
Compensation Plan Information








Plan
      category
                            Number
      of securities
                              issued
      upon exercise of
                              outstanding
      options,
                              warrants
      and rights
                            Weighted-average
      exercise
                              price
      of outstanding
                              options,
      warrants and
                              rights
                            Number
      of securities remaining
                              available
      for future issuance
                              under
      equity compensation plans
                              (excluding
      securities reflected in
                              column
      (a))(a)
                            (b)
                            (c)Equity
      compensation plans approved by security holders
                            n/a
                            n/a
                            n/aEquity
      compensation plans not approved by security holders
                            365,000
                            1.10
                            1,465,000Total
                            365,000
                            1.10
                            1,465,000








Recent
Sales of Unregistered Securities





On November 11, 2008, we issued one
million restricted shares of common stock to Lakeview Consulting LLC
(“Lakeview”) pursuant to the exemption from registration contained in section
4(2) of the Securities Act of 1933. Lakeview is a sophisticated investor in that
it is knowledgeable about our business, was furnished with the same information
that could be found in a Form S-1 registration statement, is able to read and
understand the information furnished, and is able to read and understand
financial statements.





Purchases
of Equity Securities by the Company and Affiliated Purchasers





None.





Section
15(g) of the Securities Exchange Act of 1934





Our company’s shares are covered by
Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes
additional sales practice requirements on broker/dealers who sell such
securities to persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouses). For transactions covered by the Rule, the
broker/dealer must make a special suitability determination for the purchase and
have received the purchaser’s written agreement to the transaction prior to the
sale. Consequently, the Rule may affect the ability of broker/dealers to sell
our securities and also may affect your ability to sell your shares in the
secondary market.





Section 15(g) also imposes additional
sales practice requirements on broker/dealers who sell penny securities. These
rules require a one page summary of certain essential items. The items include
the risk of investing in penny stocks in both public offerings and secondary
marketing; terms important to in understanding of the function of the penny
stock market, such as “bid” and “offer” quotes, a dealers “spread” and
broker/dealer compensation; the broker/dealer compensation, the broker/dealers
duties to its customers, including the disclosures required by any other penny
stock disclosure rules; the customers rights and remedies in causes
of


17


fraud in
penny stock transactions; and, the NASD’s toll free telephone number and the
central number of the North American Administrators Association, for information
on the disciplinary history of broker/dealers and their associated
persons.





The application of the penny stock
rules may affect your ability to resell your shares.








ITEM
      6.
            SELECTED
      FINANCIAL DATA





We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information under this item.





ITEM
      7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Operations





The following discussion of the
financial condition and results of our operations should be read in conjunction
with the financial statements and the related notes thereto included elsewhere
in this Quarterly Report on Form 10-Q for the period ended September 30, 2008
(this “Report”). This Report contains certain forward-looking statements and our
future operating results could differ materially from those discussed herein.
Certain statements contained in this Report, including, without limitation,
statements containing the words "believes", "anticipates," "expects" and the
like, constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue
“penny stock,” as such term is defined in Rule 3a51-1 promulgated under the
Exchange Act, we are ineligible to rely on these safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. We disclaims any obligation to update any such
factors or to announce publicly the results of any revisions of the
forward-looking statements contained or incorporated by reference herein to
reflect future events or developments.





On November 13, 2007, we changed our
name from “XL Generation International Inc.” to “Ecolocap Solutions Inc.” Our
shares of common stock are traded on the Bulletin Board operated by the
Financial Industry Regulatory Authority under the symbol ECOS.





Over the
past three six months the Company CEO went to Vietnam twice to negotiate and
conclude a one year, renewable contract signed with BEWTE, a scouting agency,
for identifying, negotiating and developing CDM projects in
Vietnam.








Business
Plan





The Kyoto Protocol established various
exchange mechanisms in order to achieve its targeted reduction in carbon
emission. In addition to the targets set by Kyoto, countries and companies not
bound by the Kyoto Protocol are voluntarily creating national schemes and
offsetting their emissions associated to their normal activities as part of
their corporate responsibility.







18


Recognizing the opportunity these new
mechanisms represent, we are developing an integrated development approach that
focuses upon both existing and needed infrastructure facilities to produce
substantial new value in the form of tradable CERs while at the same time
maximizing alternative energy generation co-products. Our partners with owners
of facilities emitting the harmful greenhouse gas as well as with all other
environmental projects’ owners in developing countries, to capitalize on the
opportunities afforded by the emerging market in carbon credit trading turning
potential liabilities into lucrative resources while maximizing available
possibilities for clean and renewable energy production.





Our initial geographical focus will be
Vietnam and China followed by expansions into Africa and Latin America. These
areas have been identified by leading authorities as representing substantial
opportunities for remediation of greenhouse gasses and therefore represent the
greatest opportunities for the production of CERs. They also represent
geographies in which we can develop efficient operating scale thereby enhancing
potential profitability.





Results
of Operations





For
the Twelve Month Period ended December 31, 2008





Overview





We posted net losses of $4,939,044 for
the year ended December 31, 2008 as compared to net gains of $6,306,507 last
year. The loss resulted from the signature of an exclusive Service Agreement
with United Best Technology Limited of Hong Kong. United will devote all its
intellectual property, knowledge, technology and contacts related to the CER and
Clean Development Mechanism projects exclusively for the development of EcoloCap
business in an exclusive and define territory. United for the exclusivity of its
services was granted Three Million Five Hundred Thousand (3,500,000) restricted
shares of our common stock. The cost of the Agreement was accounted for under
compensation expense.





Over the
past six months, the Company CEO went to Vietnam twice to negotiate and conclude
a one year; renewable contract. A contract was signed with BEWTE, a scouting
agency, for identifying, negotiating and developing CDM projects in Vietnam.
During his 4 other trips, accompanied by engineers and scouting agency
personnel, he went to visit over 40 projects onsite and evaluate their CER
feasibility potential. During the visits, the Company has negotiated 20
contracts and signed 11 ERPA (Emission Reduction Purchase Agreement)
contracts.





The
Company Chairman and the CEO went to China. During the trips they made, they
have negotiated with a prominent Chinese organization and concluded discussions
that lead to the establishment of a Joint Venture. The objective of the JV is to
scout and develop CER projects in China. The Venture is named Ecolocap (Beijing)
International Investment and Consultation Inc. The CEO went to China on numerous
occasions (over 4 times). In the course of his trips, the CEO did 50 onsite
projects visits in order to evaluate the CER potential of each project. During
the visits, the Company has negotiated 25 contracts and signed 8 ERPA (Emission
Reduction Purchase Agreement) contracts.





The
Company personnel and subcontractors have prepared 3 project’s PIN (Project Idea
Note) which consists of preparing a description of the project and the applied
technology, verifying if it is acceptable under the criteria of the Kyoto
Protocol. They have also prepared 3 PIN (Project Idea Note) and started the work
on the PDD (Project Design Document) for 3 projects in China. In the PDD, we
prepare detailed description and documentation of the project, technical and
financial information. This work is done through identification
and


19


meetings
with consultants and suppliers which prepare costs estimate and  make
technical proposition for the project.





In
respect of a LOI signed in October 2008 Ecolocap has entered in the process of
negotiating with foreign investors to get financial participation in the Heibe
Xinneng Power Co., Ltd. (GuanTao) project. As of March 31, 2009, Ecolocap
Solutions has identified a financing source for the project. Negotiations are
now under way; a financing arrangement has been presented and accepted by all
parties involved, which should be concluded next month. The Company CEO and
Chairman also travelled twice to Malaysia for development and contract
negotiations.





Over the
last six months Ecolocap Solutions has signed a Fiscal Agent Agreement with
Cornerstone Capital Corp. for the purpose of identifying and introducing the
Company to potential sources of debt and/or equity financing. The Chairman, CEO
and CFO of Ecolocap Solutions have actually made several presentations, held
discussions and meetings with potential investors to obtain investment in the
Company’s equity.





During
the last months the CEO of the Company went to Denmark to attend an
International Climate Change Symposium.





The
Company CEO and CFO went to Toronto many times and negotiated the terms of an
exclusive Greenhouse Gas Offset Management Services Representation Agreement to
work towards and marketing EcoloCap's growing portfolio of potential Certified
Emission Reductions (CERs) and pre-Clean Development Mechanism (CDM) Verified
Emission Reductions (VERs) with CANTOR CO2  LLC.





For the
year ended December 31, 2008, the Company has spent $185,000 in scouting,
$55,000 in travel and $114,000 in consulting.





Sales





For the year ended December 31, 2008 we
had no gross revenues. Our revenues situation results from the exit from our
former line of business as part of our effort to redeploy our assets into a new
line of business.





Total
Cost and Expenses





For the year ended December 31, 2008,
we incurred total costs and expenses of $4,939,044. This compared to $6,306,507
for last year. The increase in total cost and expenses resulted from the
signature of an exclusive Service Agreement with United Best Technology Limited
of Hong Kong. United will devote all its intellectual property, knowledge,
technology and contacts related to the CER and Clean Development Mechanism
projects exclusively for the development of EcoloCap business in an exclusive
and define territory. United for the exclusivity of its services was granted
Three Million Five Hundred Thousand (3,500,000) restricted shares of our common
stock. The cost of the Agreement was accounted for under compensation expense.
We decided to leave the manufacturing and distribution of environmentally sound
artificial playing field surfaces and have currently developed an integrated
development approach that focuses upon both existing and needed infrastructure
facilities to produce substantial new value in the form of tradable
CERs.





Selling, General and
Administration





For the year ended December 31, 2008,
we incurred selling, general and administration expenses of $939,873. This
compared $341,860 for last year. The increase resulted from the hiring of a new
CEO $190,689 development expenses $190,824, rent $59,408 and consulting $114,202
expenses.





20


Interest





We calculate interest in accordance
with the respective note payable. For the year ended December 31, 2008, we
charged $162,146. This compared to $190,474 for last year. This decrease mirrors
the decrease liabilities which we have assumed to finance our
operations.





Liquidity and Capital
Resources





At December 31, 2008, we had $23,787 in
cash, as opposed to $166,470 in cash at December 31, 2007. Total cash
requirements for operations for the twelve month period ended December 31, 2008
was $893,578. As a result of its new business plan, management estimates that
cash requirements through the end of the fiscal year ended December 31, 2009
will be between $1.0 million to $1.5 million. As of the date of this Report, we
do not have available resources sufficient to cover the expected cash
requirements through the end of the third quarter of 2009 or the balance of the
year. As a result, there is substantial doubt that we can continue as an ongoing
business without obtaining additional financing. Management's plans for
maintaining our operations and continued existence include selling additional
equity securities and borrowing additional funds to pay operational expenses.
There is no assurance we will be able to generate sufficient cash from
operations, sell additional shares of Common Stock or borrow additional funds.
Our inability to obtain additional cash could have a material adverse effect on
our financial position, results of operations and our ability to continue our
existence. If our losses continue and we are unable to secure additional
financing, we may ultimately be required to seek protection from creditors under
applicable bankruptcy laws.





At December 31, 2008, we had total
assets of $49,440 compared to total assets of $166,470. The decrease is mainly
due to general and administrative expenses.





At December 31, 2008, we had total
current liabilities of $918,524 compared to total current liabilities of
3,116,402 at December 31, 2007. The liabilities are mainly due to (i) accrued
operational costs and (ii) loan note from a shareholder.





We are party to a lease for our
Montreal office (the “Montreal Lease”), at a minimum annual rent of
approximately $64,000 per year. The Montreal Lease expires in February 15,
2014.





On December 31, 2008 we received loans
from POMA Management Inc., a shareholder, in the amount of $700,000. This loan
carried an interest of 10% and is payable on demand.





Our financial condition raises
substantial doubt about our ability to continue as a going concern. Management's
plan for our continued existence includes selling additional stock through
private placements and borrowing additional funds to pay overhead expenses while
maintaining marketing efforts to raise our sales volume. Our future success is
dependent upon our ability to achieve profitable operations, generate cash from
operating activities and obtain additional financing. There is no assurance that
we will be able to generate sufficient cash from operations, sell additional
shares of common stock or borrow additional funds. Our inability to obtain
additional cash could have a material adverse effect on our financial position,
results of operations and our ability to continue as a going
concern.





This
section includes a number of forward-looking statements that reflect our current
views with respect to future events and financial performance. Forward-looking
statements are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which, by their
nature, refer to future events. You should not place undue certainty on these
forward-looking statements, which apply


21


only as
of the date of this Memorandum. These forward-looking statements are subject to
certain risks and


uncertainties
that could cause actual results to differ materially from historical results or
our predictions.





We Have
Only Had Operating Losses Which Raise Substantial Doubts About Our Viability To
Continue Our Business And Our Auditors Have Issued An Opinion Expressing The
Uncertainty Of Our Company To Continue As A Going Concern. If We Are Not Able To
Continue Operations, Investors Could Lose Their Entire Investment In Our
Company.





No
Operating History





We have a
history of operating losses, and may continue to incur operating losses. We
experienced losses during the fiscal year ending December 31, 2008. With respect
to the unaudited year ending December 31, 2008, we incurred losses of $4,939,044
(compared with gains of $6,306,507 for the same period last year). We had
negative working capital for the year ending December 31, 2008 of $837,426
(compared with $2,949,932 for the same period last year), and a stockholders'
equity of $837,426 unaudited as of December 31, 2008 (compared with a
stockholders' equity of $2,949,932 audited as of December 31, 2007). All of
these developments raise substantial doubt about our ability to continue as a
going concern. As a result of these losses and the losses incurred as of
December 31, 2008, our auditors may issue an opinion in their audit report for
the year ended December 31, 2008 expressing uncertainty about the ability of our
Company to continue as a going concern. This means that there is substantial
doubt whether we can continue as an ongoing business without additional
financing and/or generating profits from our operations.





We have
no operations upon which to base an evaluation of our performance. We were
previously in the business of providing consultation to business executives. We
were never retained by anyone to provide such services. Accordingly, we have no
business operating history.





Contractual
Obligations





The
Company is a party to a lease for its Montreal office, at a minimum annual rent
of approximately $64,000 per year. The Montreal Lease expires in February 15,
2014.





Off
Balance Sheet Arrangements





We have no off balance sheet arrangements other than as described
above.





We
have not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as
shareholder’s equity or that are not reflected in our consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in
assets transferred to an unconsolidated entity that serves as credit, liquidity
or market risk support to such entity. We do not have any variable interest in
any unconsolidated entity that provides financing, liquidity, market risk or
credit support to us or engages in leasing, hedging or research and development
services with us.





ITEM
      7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





We are a smaller reporting company as
defined by Rule 12b-2 of the Exchange Act and are not required to provide the
information under this item.





22












REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and


Stockholders
of Ecolocap Solutions, Inc. (formerly known as XL Generation International,
Inc.)


Montreal,
Canada






We have
audited the accompanying consolidated balance sheets of Ecolocap Solutions, Inc.
(formerly known as XL Generation International, Inc.)  as of December
31, 2008 and 2007 and the related consolidated statements of operations,
stockholders’ deficiency and comprehensive income, and cash flows for each of
the years in the three-year period ended December 31,2008. Ecolocap Solutions,
Inc.’s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.






We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Ecolocap
Solutions, Inc. (formerly XL Generation International, Inc.)  as of
December 31, 2008 and 2007, and the consolidated results of its operations and
its cash flows for each of the years in the three-year period ended December 31,
2008 in conformity with accounting principles generally accepted in the United
States of America.






The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  The Company has
suffered recurring net losses and as of December 31, 2008, its current
liabilities and total liabilities exceed its current assets by $857,078 and its
current liabilities and total liabilities exceed its total assets by
$837,426.  These factors, among others, raise substantial doubt about
the Company’s ability to continue as a going concern.  The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.













PARITZ & COMPANY,
P.A.




Paritz
& Company, P.A.


March 27,
2009


Hackensack,
New Jersey









23


ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA.





ECOLOCAP
      SOLUTIONS INC.


(Formally
      known as XL GENERATION INTERNATIONAL
INC.)


CONSOLIDATED
      BALANCE SHEET


December
      31,





2008
                                      2007ASSETSCURRENT
      ASSETSCash
                                      $
                                      23,787
                                      $
                                      166,470Taxes
      Receivable
                                      
                                      31,658Prepaid
      expenses and sundry current assets
                                      
                                      6,001
                                      
                                      0TOTAL
      CURRENT ASSETS
                                      
                                      61,446
                                      
                                      166,470PROPERTY
      AND EQUIPMENT, AT COST,
                                        LESS
      ACCUMULATED DEPRECIATION
                                      
                                      19,652
                                      
                                      0TOTAL
      ASSETS
                                      $
                                      81,098
                                      $
                                      166,470LIABILITIES
      AND STOCKHOLDERS’ DEFICIENCYCURRENT
      LIABILITIES:Note
      payable (note 6)
                                      
                                      250,000
                                      
                                      -Note
      payable-stockholders (note 7)
                                      
                                      450,000
                                      
                                      3,019,332Accrued
      expenses and sundry current liabilities (note 5)
                                      
                                      218,524
                                      
                                      97,070TOTAL
      CURRENT LIABILITIES
                                      $
                                      918,524
                                      $
                                      3,116,402STOCKHOLDERS'
      DEFICIENCYCommon
      stock
                                      $
                                      106,737
                                      $
                                      98,492Additional
      paid in capital
                                      
                                      22,747,967
                                      
                                      15,704,662Accumulated
      Deficit
                                      
                                      (23,692,130)
                                      
                                      (18,753,086)TOTAL
      STOCKHOLDERS' DEFICIENCY
                                      $
                                      (837,426)
                                      $
                                      (2,949,932)TOTAL
      LIABILITIES AND STOCKHOLDERS’
                                        DEFICIENCY
                                      $
                                      81,098
                                      $
                                      166,470





F-2





24


ECOLOCAP
      SOLUTIONS INC.


(Formally
      known as XL GENERATION INTERNATIONAL
INC.)


CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS
DEFICIENCY


Year
      ended December 2008 and 2007





Stockholders
Deficiency


Stockholders
                    Deficiency
                  Shares
                  
                  Common stock
                    Authorized
                    100,000,000
                    Shares,
                    Par value
      $0.001
                  
                  Additional
      paid
                    in Capital
                  
                  Accumulated
                    Deficit
                  
                  Other
                    Comprehensive
                    Income (Loss)
                  
                  TotalJanuary
      1,2006
                  29,999,333
                  $
                  92,923
                  $
                  4,195,467
                  $
                  (7,311,239)
                  $
                  262,403
                  $
                  (2,760,446)Proceeds
      from
                    the
      issuance of
                    common
      stock
                  3,342,111
                  
                  3,342
                  
                  8,449,254
                  
                  -
                  
                  -
                  
                  8,452,596Shares
      issued for settlement of a debt
                  1,236,824
                  
                  1,237
                  
                  
                  
                  
                  
                  
                  
                  1,237Stock
      options
                  
                  
                  
                  
                  684,634
                  
                  
                  
                  
                  
                  684,634Net
      Loss
                  
                  
                  -
                  
                  -
                  
                  (17,748,354)
                  
                  
                  
                  (17,748,354)Other
      comprehensive
                    Loss
                  
                  
                  
                  
                  
                  
                  
                  
                  (41,940)
                  
                  (41,940)December
      31,2006
                  34,578,268
                  $
                  97,502
                  $
                  $13,329,355
                  $
                  (25,059,593)
                  $
                  220,463
                  $
                  (11,412,273)Proceeds
      from
                    the
      issuance of
                    Common
      stock
                  990,000
                  
                  990
                  
                  1,002,410
                  
                  -
                  
                  -
                  
                  1,003,400Stock
      options
                  
                  
                  
                  
                  1,372,897
                  
                  
                  
                  
                  
                  1,372,897Net
      Gain
                  
                  
                  -
                  
                  -
                  
                  6,306,507
                  
                  
                  
                  6,306,507Other
      comprehensive
                    Income
                  
                  
                  
                  
                  
                  
                  
                  
                  (220,463)
                  
                  (220,463)December
      31,2007
                  35,568,268
                  $
                  98,492
                  $
                  15,704,662
                  $
                  (18,753,086)
                  $
                  -
                  $
                  (2,949,932)Shares
      issued for settlement of services
                  4,500,000
                  
                  4,500
                  
                  3,834,500
                  
                  
                  
                  
                  
                  3,839,000Shares
      issued following exercise of stock options
                  25,000
                  
                  25
                  
                  225
                  
                  
                  
                  
                  
                  250Proceeds
      from
                    the
      issuance of
                    Common
      stock
                  250,000
                  
                  250
                  
                  74,750
                  
                  -
                  
                  -
                  
                  75,000Shares
      issued for settlement of a debt
                  3,470,471
                  
                  3,470
                  
                  3,133,830
                  
                  
                  
                  
                  
                  3,137,300Net
      Loss
                  
                  
                  -
                  
                  -
                  
                  (4,939,044)
                  
                  
                  
                  (4,939,044)December
      31,2008
                  43,813,739
                  $
                  106,737
                  $
                  22,747,967
                  $
                  (23,692,130)
                  $
                  -
                  $
                  (837,426)





F-3








25


ECOLOCAP
SOLUTIONS INC.


(Formally
known as XL GENERATION INTERNATIONAL INC.)


CONSOLIDATED
STATEMENTS OF OPERATIONS





Year
ended December 2008 2007, and 2006





2008
                          2007
                          2006SALES
                          $
                          -
                          $
                          -
                          $
                          4,846,157COSTS
      AND EXPENSES: Cost of sales
                          
                          -
                          
                          -
                          
                          5,121,762Selling,
      general and administrative
                          
                          939,873
                          
                          341,860
                          
                          8,288,058Provision
      for note receivable
                          
                          -
                          
                          -
                          
                          5,946,531Gain
      on settlement of debts-foreignSubsidiary
                          
                          
                          
                          (8,013,125)Compensation
      expense-Note 9
                          
                          3,839,000
                          
                          1,372,897
                          
                          684,634Interest
                          
                          162,146
                          
                          190,474
                          
                          302,085Foreign
      exchange gain
                          
                          (1,975)
                          
                          (198,613)
                          
                          (62,751)Loss
      on settlement of debt
                          
                          
                          
                          
                          
                          2,314,192TOTAL
      COSTS AND EXPENSES
                          
                          4,939,044
                          
                          (6,306,507)
                          
                          22,594,511NET
      (LOSS)
      GAIN
                          $
                          (4,939,044)
                          $
                          6,306,507
                          $
                          (17,748,354
      )Net
      (Loss) Gain Per
      Share
                          $
                          (0.12)
                          $
                          0.18
                          $
                          (0.53)Average
      weighted Number of Shares
                          
                          40,945,348
                          
                          34,579,388
                          
                          33,779,448














F-4


26





ECOLOCAP
      SOLUTIONS INC.(Formally
      known as XL GENERATION INTERNATIONAL INC.)CONSOLIDATED
      STATEMENTS OF CASH FLOWSYear
      ended December 31, 2008 and 20072008
              2007Net
      (loss) gain
              $
              (4,939,044)
              $
              6,306,507Adjustment
      to reconcile net income to net cash used inoperating
      activitiesDepreciation
      and amortization
              
              4,702
              
              -Issuance
      of common stock in exchange of debt
              
              3,470Premium
      on issuance of common stock
              
              3,133,830Stock
      based compensation
              
              3,839,000
              
              1,372,897Unrealized
      foreign exchange
              
              
              
              (220,463)Proceeds
      (repayments) of loans shareholders
              
              (3,019,332)
              
              (5,061,880)Accrued
      interests loan shareholdersChanges
      in operating assets and liabilities:Prepaid
      expenses and sundry current assets
              
              (6,001)
              
              41,345Taxes
      Receivable
              
              (31,658)
              
              -Accrued
      expenses and sundry current liabilities
              
              121,455
              
              (3,264,295)Net
      cash used by operating activities
              $
              (893,578)
              $
              (825,889)Investing
      activitiesAcquisitions
      of property and equipment
              
              (24,355)
              
              29,352Net
      cash used in investing activities
              $
              (24,355)
              $
              29,352Financing
      activitiesStock
      payable
              
              
              
              (1,000,000)Issuance
      of common stock
              
              275Premium
      on issuance of common stock
              
              74,975Sale
      of common stock
              
              
              
              1,003,400Proceeds
      of loans payable
              
              250,000
              
              -Proceeds
      of loans payable shareholder
              
              450,000
              
              831,000Net
      cash provide by financing activities
              $
              775,250
              $
              834,400(Decrease)
      increase in cash
              
              (142,683)
              
              37,863Cash-
      beginning of period
              
              166,470
              
              128,607Cash
      - end of period
              $
              23,787
              $
              166,470Supplemental
      Disclosure of Cash Flow informationNon
      cash items:Stock
      based compensation
              
              3,839,000
              
              1,372,897Unrealized
      foreign exchange
              
              -
              
              (220,463)


F-5


27


ECOLOCAP
      SOLUTIONS INC.


(Formally
      known as XL GENERATION INTERNATIONAL
INC.)


NOTES
      TO CONSOLIDATED FINANCIAL
STATEMENTS





NOTE
1-NATURE OF BUSINESS




Recognizing
the opportunities created by the Kyoto Protocol Exchange Mechanisms, EcoloCap
Solutions Inc. (hereinafter ‘EcoloCap’ or the ‘Company’) has developed an
integrated development approach that focuses upon both existing and needed
infrastructure facilities to produce substantial new value in the form of
tradable CERs. EcoloCap brings together the know-how, capital,
technology.






EcoloCap
has the resources and expertise necessary for the creation of CERs traded in the
new Carbon Market. The Company brings together the know-how, capital,
technology, engineering, and on-the-ground operators for the successful
development of Greenhouse Gases capture and utilization projects under the Clean
Development Mechanism. The Carbon Credits (CERs) so created are then sold
through established international markets.






EcoloCap
has developed an integrated development approach that focuses on generating the
Carbon Credits in developing countries to produce substantial new value in the
form of tradable CERs while at the same time maximizing alternative energy
generation co-products for additional revenues.







NOTE
2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





PRINCIPLES
OF CONSOLIDATION




The
consolidated financial statements include the accounts of the Company and its
subsidiary EcoloCap Solutions Canada Inc. after the elimination of inter-company
accounts and transactions.








CASH AND
CASH EQUIVALENTS





The
Company considers all highly liquid debt instruments with original maturities
not exceeding three months to be cash equivalents.





INCOME
TAXES





The asset
and liability approach is used to account for income taxes by recognizing
deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets
and liabilities. The Company records a valuation allowance to reduce the
deferred tax assets to the amount that is more likely than not to be
realized.





LOSS PER
COMMON SHARE





The basic
net loss per common share is computed by dividing the net loss by the weighted
average number of common shares outstanding.





Diluted
net loss per common share is computed by dividing the net loss, adjusted on an
"as if converted" basis, by the weighted average number of common shares
outstanding plus potential dilutive securities.




F-6


28


USE OF
ESTIMATES





In
preparing financial statements, management makes estimates and assumptions that
affect the reported amounts of assets and liabilities in the balance sheet and
revenue and expenses in the income statement. Actual results could differ from
those estimates.





STOCK
BASED COMPENSATION





The
Company accounts for stock options and similar equity instruments issued in
accordance with SFAS No. 123(revised), "Share-Based Payment". Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over the
expected vesting period. Transactions in which goods or services are received in
exchange for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity
instruments issued, whichever is more reliably measurable. SFAS
No. 123(revised) requires excess tax benefits be reported as a financing
cash inflow rather than as a reduction of taxes paid.





NOTE
3--GOING CONCERN





The
Company's consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and settlement of
liabilities and commitments in the normal course of business. The Company posted
net loss of $4,939,044 for the year ended December 31, 2008 as compared to net
profit of $6,306,507 last year. The Company has negative working capital of
$837,426 and $2,949,932 at December 31, 2008 and 2007, respectively and a
stockholders deficiency of $ 837,426 and $2,949,932 at December 31, 2008 and
2007.  These factors among others raise substantial doubt about the
Company's ability to continue as a going concern.





Management's
plans for the Company's continued existence include selling additional stock and
borrowing additional funds to pay overhead expenses.





With the
opportunities created by the Kyoto Protocol Exchange Mechanisms, management has
begun the process of redeploying its assets, identifying business strategies
that offers above average profit potential and identifying the resources
necessary to successfully execute it new strategic direction.





Recognizing
the opportunity this new market represents, the Company has developed an
integrated development approach that focuses upon both existing and needed
infrastructure facilities to produce substantial new value in the form of
tradable CERs.





The
Company's future success is dependent upon its ability to achieve profitable
operations, generate cash from operating activities and obtain additional
financing. There is no assurance that the Company will be able to generate
sufficient cash from operations, sell additional shares of common stock or
borrow additional funds.





The
Company's inability to obtain additional cash could have a material adverse
effect on its financial position, results of operations and its ability to
continue in existence. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.





F-7





29


NOTE 4
--PROPERTY & OFFICE EQUIPMENT





Equipment
is stated at cost. Depreciation is computed using the straight-line method over
3 to 5 years.





December
      31
                December
      31,2008
                2007Computer
      equipment--3 yrs
                $
                11,654
                $
                0Furniture
      & fixtures--5 yrs
                
                12,701
                
                0$
                24,355
                $
                0Less:
      accumulated depreciation
                
                4,703
                $
                0Balance
      December 31, 2008
                $
                19,652
                $
                0





NOTE
5--ACCRUED EXPENSES AND SUNDRY CURRENT LIABILITIES





Accrued
expenses consisted of the following at December 31 :





2008
                  2007Accrued
      interest
                  $
                  43,041
                  $
                  -Accrued
      operating expenses
                  
                  175,483
                  
                  97,070$
                  218,524
                  $
                  97,070








NOTE 6-
NOTE PAYABLE





In 2008,
the Company received loans from Carnavon Trust REG in the amount of $250,000.
These loans carry an interest of 10% and are payable on demand.









NOTE
7--PAYABLE – STOCKHOLDERS’







On
December 31, 2007, the Company had received loans from CAPEX Investment Limited,
a shareholder, in the amount of $3,019,332. These loans were received over a
three year period. These loans carried an interest of 10% and were payable on
demand. The loan was convertible, over a three year period, into common shares
at a ratio of one share per dollar of debt. The amount owed to stockholder at
September 30 is $0. On May 22, 2008, CAPEX Investment Limited and Toniland S.A,
and Larinton Investments S.A.signed an agreement were CAPEX Investment Limited
transferred its loans plus the accrued interests ($117,968) to Toniland S.A,
$1,500,000 and Larinton Investments S.A., $1,637,300.






The loan
relating to Toniland S.A. carry an interest of 10% and is payable on demand.The
loan is convertible, over a three year period, into restricted common shares of
the Company at a fix price. The price of the shares of the Company is equal to
the average market price of the common shares of the Company during the 60
previous days of the date of the execution of the conversion. On June 11, 2008,
Toniland S.A has elected to convert loans of $1,500,000 into 1,659,295 common
shares of the Company. The amount owed to Toniland S.A. at September 30 is
$0.






F-8




30











The loan
relating to Toniland S.A. carry an interest of 10% and is payable on demand. The
loan is convertible, over a three year period, into restricted common shares of
the Company at a fix price. The price of the shares of the Company is equal to
the average market price of the common shares of the Company during the 60
previous days of the date of the execution of the conversion. On June 11, 2008,
Larinton Investments S.A has elected to convert loans of $1,637,300 into
1,811,176 common shares of the Company. The amount owed to Larinton Investments
S.A at September 30 is $0.






In 2008,
the Company received loans from POMA Management Inc., a shareholder, in the
amount of $450,000. These loans carry an interest of 10% and are payable on
demand.




Amounts
owed to stockholders at December 31, are as follows:





2008
                2007Payable
      POMA Management Inc.
                
                450,000
                
                3,019,332Payable
      stockholders
                $
                450,000
                $
                3,019,332




NOTE 8
-CAPITAL STOCK




The
company is authorized to issue 100,000,000 shares of common stock (par value
$0.001) of which 43, 813,739 were issued and outstanding at of December 31,
2008. As of February 12, 2008, the Company entered into an agreement with United
Best Technology Limited (“United”). The agreement is a five (5) year renewable
Service Agreement (the “Agreement”) pursuant to which United shall provide
advice to undertake for and consult with the Company concerning certain
operational areas and shall review and advise the Company regarding Carbon
Credits (“CER”) and Clean Development Mechanism projects as well as the
Company’s overall progress, needs and condition in those areas, find, negotiate
and close contracts and projects for a minimum of Three Million Six Hundred
Thousand (3,600,000) CERs that could be certified, traded and delivered and to
assist the execution of said contracts or projects by the Company or one of its
affiliates. United for the exclusivity of its services was granted Three Million
Five Hundred Thousand (3,500,000) restricted shares of the Company’s common
stock, out of said Three Million Five Hundred Thousand (3,500,000) restricted
shares, One Million (1,000,000) restricted shares will be put in escrow as
provided in the executed Escrow Agreement.






On
September 10, 2008, Webster Plus S.A. paid seventy-five thousand dollars
($75,000) to purchase from the Company (i) 250,000 shares of the Company's
common stock; and (ii) Series A Warrants to purchase up to an additional 125,000
shares of the Company's common stock at an exercise price initially set at $2.50
per share.






On June
11, 2008, Larinton Investments S.A has elected to convert loans of $1,637,300
into 1,811,176 common shares of the Company. The price of the shares of the
Company is equal to the average market price of the common shares of the Company
during the 60 previous days of the date of the execution of the
conversion.






On June
11, 2008, Toniland S.A has elected to convert loans of $1,500,000 into 1,659,295
common shares of the Company. The price of the shares of the Company is equal to
the average market price of the common shares of the Company during the 60
previous days of the date of the execution of the conversion.






F-9




31




On
October 9, 2008, the Company entered into an agreement with Lakeview Consulting
LLC (“Lakeview”). The agreement is a one (1) year Service Agreement (the
“Agreement”) pursuant to which Lakeview shall provide advice to undertake for
and consult with the Company concerning management advisement, strategic
planning and marketing in connection with its business, together with advisory
and consulting related to shareholder management and public relations. Lakeview
for its services was granted One Million (1,000,000) restricted shares of the
Company’s common stock






NOTE
9-STOCK-BASED COMPENSATION EXPENSE






As of
February 12, 2008, the Company entered into an agreement with United Best
Technology Limited (“United”). The agreement is a five (5) year renewable
Service Agreement (the “Agreement”) pursuant to which United shall provide
advice to undertake for and consult with the Company concerning certain
operational areas and shall review and advise the Company regarding Carbon
Credits (“CER”) and Clean Development Mechanism projects as well as the
Company’s overall progress, needs and condition in those areas, find, negotiate
and close contracts and projects for a minimum of Three Million Six Hundred
Thousand (3,600,000) CERs that could be certified, traded and delivered and to
assist the execution of said contracts or projects by the Company or one of its
affiliates. United for the exclusivity of its services was granted Three Million
Five Hundred Thousand (3,500,000) restricted shares of the Company’s common
stock, out of said Three Million Five Hundred Thousand (3,500,000) restricted
shares, One Million (1,000,000) restricted shares will be put in escrow as
provided in the executed Escrow Agreement.






The
Company ability to value the United Best contract has been aversively affected
by the following risks: the early stage development of the industry as a whole,
the general political risk in China as well as non western business norms in
effect were this contract is domicile. Accordingly, the Company has provided a
valuation reserve against the prepayments made under United Best
contract.






On
October 9, 2008, the Company entered into an agreement with Lakeview Consulting
LLC (“Lakeview”). The agreement is a one (1) year Service Agreement (the
“Agreement”) pursuant to which Lakeview shall provide advice to undertake for
and consult with the Company concerning management advisement, strategic
planning and marketing in connection with its business, together with advisory
and consulting related to shareholder management and public relations. Lakeview
for its services was granted One Million (1,000,000) restricted shares of the
Company’s common stock.For the year ended December 31, 2008, the Company
recorded compensation expense of $3,839,000. As of December 31, 2008, there was
no unrecognized compensation cost related to non-vested share-based
compensation.






A summary of option activity for the year ended December 31, 2008
is presented below:











Options
                        Shares
                        
                        Weighted-Average
      Exercise Price
                        
                        Weighted-Average
      Remaining Contractual TermOutstanding
      at December 31, 2007
                        1,540,000
                        
                        $
                        1.10
                        
                        5.15Granted
                        
                        -
                        
                        
                        -
                        
                        
                        -Exercised,
      forfeited, or expired
                        
                        75,000
                        
                        
                        -
                        
                        
                        -Outstanding
      at December 31, 2008
                        
                        1,465,000
                        
                        $
                        1.10
                        
                        
                        5.74Exercisable
      at December 31, 2008
                        
                        1,465,000
                        
                        $
                        1.10
                        
                        
                        5.74





F-10


32





NOTE 10
-INCOME TAXES





As of
December 31, 2008 the company had net operating loss carry forwards of
approximately $1,975,617. These net operating losses are being utilized against
the reported income for the year ended December 31, 2008. This results in no tax
expense or provision for the year.





Components
of deferred tax assets and liabilities at December 31, 2008 are as
follows:





2008
                2007Deferred
      tax asset
                $
                1,975,617
                $
                623,000Valuation
      allowance
                
                (1975,617)
                
                (623,000)Net
      deferred tax asset
                $
                0
                $
                0





The
Company has recorded a full valuation allowance against its deferred tax asset
since it believes it is more likely than not that such deferred tax asset will
not be realized.





NOTE 11
-COMMITMENTS AND CONTINGENCIES





The
Company is a party to a lease for its Montreal office, at a minimum annual
rental of approximately $64,000 per year.





NOTE 12
-RELATED PARTY TRANSACTIONS




In 2008,
the Company received loans from POMA Management Inc., a shareholder, in the
amount of $450,000. These loans carry an interest of 10% and are payable on
demand.







NOTE 13 - RECENTLY ISSUED ACCOUNTING
STANDARDS





In
September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), “Fair Value Measurements”.
SFAS 157 defines fair value, establishes a framework for measuring fair
value under GAAP, and expands disclosures about fair value measurements. This
statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007. In February 2008, the FASB agreed to
delay the effective date of SFAS 157 for all non-financial assets and
non-financial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis, to fiscal years
beginning after November 15, 2008. As of December 31, 2008, the
Company’s fair values of its financial assets and liabilities, which consist of
cash and cash equivalents, interest payable and loans due to shareholders
approximate their carrying amount due to the short period of time to
maturity.





In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option for Financial
Assets and Financial Liabilities — Including an Amendment of FASB Statement
No. 115”. This statement provides companies with an option to
measure, at specified election dates, many financial instruments and certain
other items at fair value that are not currently measured at fair
value.  A company that adopts SFAS 159 will report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. This statement also establishes
presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types
of assets and liabilities. This statement is effective for fiscal years
beginning after November 15, 2007. The Company





F-11


33


adopted
this statement on January 1, 2008. The adoption did not have a material impact
on its results of operations and financial position.




In
December 2007, FASB issued SFAS No. 160 (“SFAS 160”), “Interests in Consolidated Financial
Statements — an amendment of ARB No. 51”, which impacts the
accounting for minority interest in the consolidated financial statements of
filers. The statement requires the reclassification of minority interest to the
equity section of the balance sheet and the results from operations attributed
to minority interest to be included in net income. The related minority interest
impact on earnings would then be disclosed in the summary of other comprehensive
income. The statement is applicable for all fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. The adoption of this
standard will require prospective treatment. The Company is currently evaluating
the effect that the adoption of SFAS 160 will have on its results of
operations and financial position. However, the adoption of SFAS 160 is not
expected to have a material impact on the Company’s financial
statements.




In
December 2007, FASB issued SFAS No. 141(R) (“SFAS 141R”), “Business Combinations”,
which impacts the accounting for business combinations. The statement requires
changes in the measurement of assets and liabilities required in favor of a fair
value method consistent with the guidance provided in SFAS 157 (see
above).  Additionally, the statement requires a change in accounting
for certain acquisition related expenses and business adjustments which no
longer are considered part of the purchase price.  Adoption of this
standard is required for fiscal years beginning after December 15, 2008.
Early adoption of this standard is not permitted. The statement requires
prospective application for all acquisitions after the date of adoption. The
Company is currently evaluating the effect that the adoption of SFAS 141(R)
will have on its results of operations and financial position. However, the
adoption of SFAS 141(R) is not expected to have a material impact on the
Company’s financial statements.





In March
2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments
and Hedging Activities", an amendment of SFAS No. 133. SFAS 161 applies to all
derivative instruments and non-derivative instruments that are designated and
qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS 133 and
related hedged items accounted for under SFAS 133. SFAS 161 requires entities to
provide greater transparency through additional disclosures about how and why an
entity uses derivative instruments, how derivative instruments and related
hedged items are accounted  for under SFAS 133 and its related
interpretations, and how derivative instruments and related hedged items affect
an entity's financial position, results of operations, and cash flows. SFAS 161
is effective as of the beginning of an entity's first fiscal year that begins
after November 15, 2008. The Company does not expect the adoption of SFAS 161
will have a material impact on its financial condition or results of
operation.




In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets”.  This guidance is intended to improve the
consistency between the useful life of a recognized intangible asset under SFAS
No. 142, “Goodwill and Other
Intangible Assets”, and the period of expected cash flows used to measure
the fair value of the asset under SFAS No. 141(R) when the underlying
arrangement includes renewal or extension of terms that would require
substantial costs or result in a material modification to the asset upon renewal
or extension.  Companies estimating the useful life of a recognized
intangible asset must now consider their historical experience in renewing or
extending similar arrangements or, in the absence of historical experience, must
consider assumptions that market participants would use about renewal or
extension as adjusted for SFAS No. 142’s entity-specific
factors.  This standard is effective for fiscal years beginning after
December 15, 2008, and is applicable to the Company’s fiscal year beginning
January 1, 2009.  The Company does not anticipate that the adoption of
this FSP will have an impact on its results of operations or financial
condition.





F-12


34


In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60.”  SFAS
163 requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation.  This
Statement also clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement to be used to
account for premium revenue and claim liabilities. Those clarifications will
increase comparability in financial reporting of financial guarantee insurance
contracts by insurance enterprises. This Statement requires expanded disclosures
about financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.  SFAS 163 will be effective for financial
statements issued for fiscal years beginning after December 15, 2008.  The
Company does not expect the adoption of SFAS 163 will have a material impact on
its financial condition or results of operation.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards will have a material effect on the accompanying financial
statements.





NOTE 14 –
LITIGATION





As of the
filling of the present Annual report on form 10KSB, the Company considers there
was no pending or threatened litigation, claims, or assessments against the
Company for its acts or omission.











F-13





















































35


ITEM
9.                      CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





There have been no disagreements on
accounting and financial disclosures from the inception of our company through
the date of this Form 10-K. Our financial statements for the period from
inception to December 31, 2008, included in this report have been audited by
Paritz & Company, PA , as set forth in this annual report.





ITEM
9A.                      CONTROLS AND
PROCEDURES.





Evaluation
of Disclosure Controls and Procedures





We maintain “disclosure controls and
procedures,” as such term is defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms, and that such information is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. We conducted an evaluation (the “Evaluation”),
under the supervision and with the participation of our Chief Executive Officer
(“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design
and operation of our disclosure controls and procedures (“Disclosure Controls”)
as of the end of the period covered by this report pursuant to Rule 13a-15 of
the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our
Disclosure Controls were effective as of the end of the period covered by this
report.





Limitations
on the Effectiveness of Controls





Our management, including our CEO and
CFO, does not expect that our Disclosure Controls and internal controls will
prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the 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 a 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 or board override of the
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, controls may
become inadequate because of changes in conditions, or the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.
















36


CEO and CFO
Certifications





Appearing immediately following the
Signatures section of this report there are Certifications of the CEO and the
CFO. The Certifications are required in accordance with Section 302 of the
Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this
report, which you are currently reading is the information concerning the
Evaluation referred to in the Section 302 Certifications and this information
should be read in conjunction with the Section 302 Certifications for a more
complete understanding of the topics presented.





Management’s
Report on Internal Control over Financial Reporting





Our management
is  responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). The Company’s internal control over financial reporting is a process
designed to provide reasonable assurance to our  management and board
of directors regarding the reliability of financial reporting and the
preparation of the financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of
America.





Our internal control over financial
reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) 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.





Because of its inherent limitations,
internal controls over financial reporting may not prevent or detect
misstatements. All internal control systems, no matter how well designed, have
inherent limitations, including the possibility of human error and the
circumvention of overriding controls. Accordingly, even effective internal
control over financial reporting can provide only reasonable assurance with
respect to financial statement preparation. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.





Our management assessed the
effectiveness of our internal control over financial reporting as of December
31, 2008. In making this assessment, it used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework. Based on our assessment, we believe that, as of December
31, 2008, the Company’s internal control over financial reporting was effective
based on those criteria.





This annual report does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to
attestation by our registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit us to provide only
management’s report in this annual report.


















37


Changes
in Internal Controls





We have also evaluated our internal
controls for financial reporting, and there have been no significant changes in
our internal controls or in other factors that could significantly affect those
controls subsequent to the date of their last evaluation.





ITEM
      9B.
            OTHER
      INFORMATION





None.








ITEM
      10.
            DIRECTORS
      AND EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE
  GOVERNANCE





The
following table presents information with respect to our officers, directors and
significant employees as of the date of this Report:





Name
                    Age
                    PositionTri
      Vu Truong
                    61
                    Chief
      Executive OfficerRobert
      Clarke
                    64
                    Chairman,
      DirectorClaude
      Pellerin
                    39
                    DirectorMark
      Lawson
                    36
                    DirectorAlbert
      Beerli
                    66
                    DirectorMichel
      St-Pierre
                    46
                    Acting
      Chief Financial
Officer





Each
director serves until our next annual meeting of the stockholders or unless they
resign earlier. The Board of Directors elects officers and their terms of office
are at the discretion of the Board of Directors.


Each of
our directors serves until his or her successor is elected and qualified. Each
of our officers is elected by the board of directors to a term of one (1) year
and serves until his or her successor is duly elected and qualified, or until he
or she is removed from office. At the present time, members of the board of
directors are not compensated for their services to the board.





Biographical
Information Regarding Officers and Directors





Dr. Tri
Vu Truong, Chief Executive Officer and President.Dr. Truong has served
as a director, chief executive officer and president of the Company since
February 14, 2008. He has worked in the environmental sector since 1970, upon
completion of his B. Engineering degree, complemented by a Master's degree in
Chemical Engineering in 1971 and a Ph.D. degree in Civil Engineering with
Environmental Option in 1975. His professional career includes the realization
of many major scientific and technical studies and projects. Dr. Truong was
responsible in 1977 for the creation and operation of the Permits &
Inspections Division of the Montreal Urban Community––Environment Department. He
has taught several post-graduate courses at the prestigious Universitéé de
Montrééal's ÉÉcole Polytechnique. As President of the Sodexen Environmental
Engineering Group since 1981, Dr. Truong has managed numerous major
environmental impact projects, including: Comparative study of the environmental
impact of dust-palliatives (MTQ 1988, 1989, 1990); Environmental decommissioning
of a polystyrene production complex (BASF, 1988-1990); Solid waste management
study relating to the closure of the Miron landfill (Montrééal, 1988-90), as
well as various research & development projects in the
area.


38








Robert Clarke, Chairman and Director.Since June 2000, Mr. Clarke has been Chairman and Chief Executive Officer
of 7bridge Capital Partners, a private venture capital group in Hong Kong. Prior
to moving to Hong Kong Mr. Clarke was based in Vancouver, BC and played a key
role in the start-up and financing of several Canadian and United States
companies in the high technology and telecommunications sectors. Since mid 2001
he has been based in Hong Kong and involved in private and public companies,
with a particular emphasis on the development of China opportunities. Prior to
moving to Hong Kong in June 2001, Mr. Clarke served as a Director and as
President and Chief Executive Officer of Waverider Communications Inc. from
January 1997 to December 1997. He was a Director and Chairman of TEK Digitel
Corp. from June 1998 until September 1999. Mr. Clarke also served as the
Chairman of the Board of Directors of ePhone Telecom Inc. from April 1999 until
July 21, 2000 when he resigned from the Board. He rejoined the Board on December
1, 2000 once again becoming Chairman, which position he held until September 12,
2002. He resigned from the ePhone Board on December 30, 2002. He also served as
the Chief Executive Officer of ePhone from June 3, 1999 to July 21, 2000 and
again from December 1, 2000 to July 1, 2002. For three periods: June 3, 1999 to
August 8, 1999; March 9, 2000 to April 1, 2000; and December 1, 2000 to April 1,
2001 he also served as President. Mr. Clarke has also been Director and Chairman
of the Board of Directors of Manaris Corporation (formerly C-Chip Technologies
Corporation) from January 2003 to August 23, 2006 on which date resigned as both
Chairman and a director. Mr. Clarke has also been Chairman of Cardtrend
International Inc. since Oct. 2, 1998, except for a period from Dec. 17, 2004 to
Oct. 5, 2005, until resigning in January 2008. He also served a Chief Executive
Officer of Cardtrend (then called Asia Payment Systems Inc.) from Oct. 15, 2005
until May 22, 2006.





Claude Pellerin, Director.Mr.
Pellerin was member of the Board of Directors between June 17, 2005 and his
resignation on October 20, 2008. Mr. Pellerin is a corporate attorney and a
partner in the law firm of Kaufman Laramee LLP. Between December 2003 and July
2007 Mr. Pellerin was partner in the law firm of Hovington Pellerin S.e.n.c.
Since 2002, Mr. Pellerin has served as Director, President, Treasurer and
Secretary of Capex Investments ( Canada ) Limited, an investments and financing
corporation based in Montreal , Quebec . From 2001-2002, Mr. Pellerin served as
a Secretary for Equilar Capital Corporation, an Ontario Corporation listed on
the Toronto Stock exchange. Between 2002 and 2004, Mr. Pellerin served as Vice
President for legal affairs for Manaris Corporation, a Nevada corporation listed
on the OTCBB.


Since
2003, Mr. Pellerin has served as Secretary of Gourmet Flash Inc., a Quebec
corporation, and from 2004-2005 served as a Director to Canadian Security Agency
(2004) Inc. Mr. Pellerin served as the Company's President, Secretary and
Treasurer from June 17, 2005 until August 19, 2005, at which time he resigned as
an officer but remained a director of the Company until his resignation on
October 20, 2008.





Mark Lawson,
Director.  Mr. Lawson has been working in corporate finance
since 1995, upon completion of his Bachelor of Arts, Statistical Sciences,
complemented by a Master's degree in Business Administration in 2005. Between
1996 and 2001 Mr. Lawson was employed as Mutual Fund Specialist by the Royal
Bank of Canada Investments. In 2001 up until 2003, Mr. Lawson joined AIM Funds
Management. Between 2003 and 2004 Mr Lawson was employed as Director of Newhaven
Corporate Finance. In 2005 Mr Lawson joined the Global Investment Banking
Coverage –– Healthcare department of Morgan Stanle





Albert Beerli, Director. Mr.
Beerli has served as a director of the Company since March 2006. Mr. Beerli is a
scientist, having received his Ph.D in chemical engineering in 1969. Since 1988
Mr. Beerli has been the Chief Executive Officer of Zenwex AG in Zug,
Switzerland. Zenwex AG provides consulting services on scientific and technical
matters.









39


Michel St-Pierre, Acting Chief
Financial Officer. Mr. St-Pierre has served as an officer of the Company
since July 2006. Mr. St-Pierre is a registered chartered accountant in Quebec,
Canada. Before working for the Company, Mr. St-Pierre has served as Chief
Financial Officer of a public shell company, Tiger Renewable Energy Limited
(formerly known as Tiger Ethanol International Inc. and Arch Management) since
January, 2007 and held positions as the Finance Director (comparable to
Corporate Treasurer) at SPB Canada Inc. from 2004-2006, Symbior Technologies
Inc. from 2003-2004, and Boulangeries Comas Inc. from 2000-2003.





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


Section
16(a) of the Securities Exchange Act of 1934 requires our executive officers and
directors, and persons who beneficially own more than 10% of our equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based on our review of the copies of such
forms we received, we believe that during the fiscal year ended December 31,
2008 all such filing requirements applicable to our officers and directors were
complied with, except that reports were filed late by the following
persons:





Name and
      principal
                                position
                              Number of Late
      Reports
                              Transactions Not Timely Known
      Failures to File aReported
                              Required
      FormMark
      Lawson
                              1
                              July
      14, 2008
                              Form
      3Cherry
      Lee
                              
                              July
      15, 2008
                              Form
      3Arthur
      Rawl
                              2
                              July
      21, 2008
                                July
      22, 2008
                              Form
      4
                                Form
      5Sandy
      Gilmour
                              3
                              July
      21, 2008
                                July
      21, 2008
                                September
      2, 2008
                              Form
      5
                                Form
      4
                                Form
      4Claude
      Pellerin
                              1
                              July
      18, 2008
                              Form
      5Tri
      Vu Truong
                              1
                              August
      7, 2008
                              Form
      3United
      Best Technology LTD.
                              1
                              August
      7, 2008
                              Form
      3DT
      Crystal Holdings Ltd.
                              5
                              September
      11, 2008
                                July
      29, 2008
                                July
      29, 2008
                                July
      29, 2008
                                July
      21, 2009
                              Form
      4
                                Form
      4
                                Form
      4
                                Form
      4/A
                                Form
      4Michel
      St-Pierre
                              1
                              
                              Form
      3
















40


Audit
Committee





We have a
separately-designated audit committee of the board. Our audit committee is
responsible for: (1) selection and oversight of our independent accountant; (2)
establishing procedures for the receipt, retention and treatment of complaints
regarding accounting, internal controls and auditing matters; (3) establishing
procedures for the confidential, anonymous submission by our employees of
concerns regarding accounting and auditing matters; (4) engaging outside
advisors; and, (5) funding for the outside auditory and any outside advisors
engagement by the audit committee. A copy of our audit committee charter is
filed as an exhibit to this report. Up to February 25, 2009, our Audit Committee
consisted of Lim Ping Wai whom was independent director; the full board has
carried out the functions and responsibilities since her
resignation.





Compensation
Committee





Since the
departure of Messrs. Rawl and Gilmour, the full board has carried out the
functions and responsibilities of this committee. This committee acts on behalf
of our board of directors to approve compensation arrangements for our
management and review the compensation paid to our board of directors. A copy of
our Compensation Committee Charter was filed with our last 10KSB on March 31,
2008.





Nominating
and Corporate Governance Committee





Since the
departure of Messrs. Rawl and Gilmour, the full board has carried out the
functions and responsibilities of the  Nominating and Corporate
Governance Committee. This committee acts on behalf of our board of directors
and generally to identify and recommend nominees for our board and our
committees, identify and recommend candidates for senior management, review and
recommend to the board, or independently take, action on various company
corporate governance issues, receive and respond to certain complaints raised by
our employees regarding alleged illegal acts or behavior-related conduct by
board members in violation of our Code of Business Conduct and Ethics, supervise
our chief financial officer in the context of the Ethics Code and carry-out
other assignments as designated by our board. A copy of the Nominating and
Corporate Governance Committee was filed with our last 10KSB on March 31,
2008.





Code
of Ethics





We
adopted a code of ethics on March 26, 2008. We adopted eight Corporate Values
(Focus, Respect, Excellence, Accountability, Teamwork, Integrity, Very Open
Communications and Enjoying Our Work) to provide a framework for all employees
in conducting themselves in their jobs. These policies are not intended to
substitute for those Values, but will serve as guidelines in helping employee to
conduct our business in accordance with its Values. Compliance requires meeting
the spirit, as well as the literal meaning, of the law, the policies and the
Values. It is expected that employee will use common sense, good judgment, high
ethical standards and integrity in all their business dealings.





As of March 30, 2009 we had
five directors. Our board determined that Messrs. Clarke and Lawson are
independent. We have adopted those standards for independence contained in the
Nasdaq Marketplaces Rules, Rule 4350(d) and Rule 4200(a)(15). Messrs. Truong,
Beerli and Pellerin are not independent.
















41


ITEM
      11.
            EXECUTIVE
      COMPENSATION





Compensation
of Officers





Option
award compensation is the fair value for stock options vested during the period,
a notional amount estimated at the date of the grant using the Black-Scholes
option-pricing model. The actual value received by the executives may differ
materially and adversely from that estimated. A summary of cash and other
compensation paid in accordance with management consulting contracts for our
Principal Executive Officer and other executives for the most recent two years
is as follows:











Name
      and Principal Position
                Year
                Salary
                Bonus
                  Awards
                Stock
                  Awards
                Other
      Incentive
                  Compensation
                Non-Equity
                  Plan
                  Compensation
                Nonqualified
                  Deferred
                  Earnings
                All
                  Other
                  Compensation
                Total($)
                ($)
                ($)
                ($)
                ($)
                ($)
                ($)
                ($)(a)
                (b)
                (c)
                (d)
                (e)
                (f)
                (g)
                (h)
                (i)
                (j)Tri
      Vu Truong (2)
                  Chief
      Executive Officer and President
                2008
                  2007
                  2006
                190,689
                  0
                  0
                0
                  00
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0Claude
      Pellerin, (3)
                  Director,
      President
                  and
      CEO
                2008
                  2007
                  2006
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  124,834
                  103,997
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  124,834
                  103,997Michel
      St-Pierre (4)
                  CFO
                2008
                  2007
                  2006
                108,644
                  100,000
                  150,000
                0
                  0
                  0
                0
                  0
                  0
                0
                  124,834
                  624,000
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  124,834
                  624,000Alexander
      Clement Gilmour, resigned (5)
                2008
                  2007
                  2006
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  156,042
                  129,997
                0
                  0
                  0
                0
                  0
                  0
                0
                  0
                  0
                0
                  156,042
                  129,997





(1)
            Prior
      to the acquisition of XL Generation AG, the Company's fiscal year ended
      April 30th. XL Generation AG, our wholly-owned subsidiary, had a fiscal
      year ending December 31st. Following the acquisition of XL Generation AG,
      we adopted the fiscal year end of XL Generation AG.(2)
            Mr.
      Truong has been appointed president and CEO on February 1,
      2008.(3)
            Mr.
      Pellerin was our president, CEO and a director from June 17, 2005 until
      August 19, 2005. He remains a director of our company.(4)
            Mr.
      St-Pierre has been our chief financial officer since July 28,
      2006.(5)
            Mr.
      Gilmour served as our principal executive office from August 22, 2007 to
      February 14, 2008.





During the fiscal year ended 2008, Mr.
Tri Vu Truong served as our chairman and CEO.












42


Employment
Contracts





During the fiscal year ended December
31, 2008, we executed a Consulting Agreement with Sodexen Inc. (“Sodexen”)
pursuant to which, Sodexen is providing the services of its representative, Dr.
Tri Vu Truong to serve in the capacity of President and Chief Executive Officer
of our company. The “Engagement Period” is for one year, and became effective as
of February 1, 2008.





Other
Executive Officers





During
2008, other than those disclosed above, no other employment contracts have been
executed by our company for any other executive officer.





Retirement,
Resignation or Termination Plans





We
sponsor no plan, whether written or verbal, that would provide compensation or
benefits of any type to an executive upon retirement, or any plan that would
provide payment for retirement, resignation, or termination as a result of a
change in control of our company or as a result of a change in the
responsibilities of an executive following a change in control of our
company.





Directors=Compensation





The
persons who served as members of our board of directors, including executive
officers did not receive any compensation for services as a director for
2008.











Indemnification





Pursuant
to the articles of incorporation and bylaws of the corporation, we may indemnify
an officer or director who is made a party to any proceeding, including a law
suit, because of his position, if he acted in good faith and in a manner he
reasonably believed to be in its best interest. In certain cases, we may advance
expenses incurred in defending any such proceeding. To the extent that the
officer or director is successful on the merits in any such proceeding as to
which such person is to be indemnified, we must indemnify him against all
expenses incurred, including attorneys fees. With respect to a derivative
action, indemnity may be made only for expenses actually and reasonably incurred
in defending the proceeding, and if the officer or director is judged liable,
only by a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.





Regarding indemnification for
liabilities arising under the Securities Act of 1933 which may be permitted for
directors or officers pursuant to the foregoing provisions, we are informed
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy, as expressed in the Act and is
therefore unenforceable.





ITEM 12.
            SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS





The
following table sets forth certain information regarding the beneficial
ownership of our common stock  as of the date of this Report by (i)
each of our directors, (ii) each of our  officers named in the Summary
Compensation Table, (iii) each person who is known by us  to be the
beneficial owner of more than five percent of our  outstanding common
stock, and (iv) all directors and executive officers as a group. Except as
otherwise indicated below, each person named has sole voting and investment
power with respect to the shares indicated. The percentage of ownership set
forth below reflects each holder's ownership interest in the 43,813,739 shares
of our common stock outstanding as of March 30, 2009.







43


Amount
and Nature of Beneficial Ownership


Name
      and Address of Beneficial Owner (1)
                                  Shares
                                  Options/
      Warrants
                                  Total
                                  PercentTri
      Vu Truong (2)Alexander
      C. Gilmour, resigned (3)
                                  187,500
                                  250,000
                                  437,500
                                  1%Claude
      Pellerin, (4)
                                  0
                                  200,000
                                  200,000
                                  0%Albert
      Beerli (5)
                                  1,500,000
                                  100,000
                                  1,600,000
                                  3.65%Arthur
      Rawl, resigned (6)
                                  0
                                  215,000
                                  215,000
                                  0%Michel
      St-Pierre (7)
                                  500,000
                                  700,000
                                  1,200,000
                                  2.73%All
      executive officers and directors as a group (6 persons)
                                  2,187,500
                                  1,465,000
                                  3,652,500
                                  8.34%DT
      Crystal (8)
                                  11,145,000
                                  0
                                  11,145,000
                                  25.44%United
      Best Technology Limited (2)
                                  3,500,000
                                  0
                                  3,500,000
                                  8.0%Cede
      & Co (9)
                                  17,096,444
                                  0
                                  17,096,444
                                  39.02%(1)
                                  The
      mailing address for each of the listed individuals is c/o XL Generation
      International Inc., 740 St-Maurice, local 102,Montreal, Quebec, Canada,
      H3C 1L5.(2)
                                  Owner
      of 5% or more of our common stock. Mr. Truong, Chief Executive Officer, is
      the President and Chief Executive Officer of United Best Technology
      Limited.(3)
                                  Chairman
      of the Board of Directors.(4)
                                  Director.(5)
                                  Director.(6)
                                  Director(7)
                                  Chief
      Financial Officer.(8)
                                  Owner
      of 5% or more of our common stock. Mr. Alan Cole, sole director and sole
      shareholder of Redcorn Consultants Limited, and Mme. Michelle Bain, Sole
      Officer of Redcorn Consultants Limited, the sole officer and director of
      DT Crystal Limited, has voting and investment control over the securities
      held by DT Crystal Limited, and are therefore deemed to be the beneficial
      owner of such securities.(9)
                                  Owner of 5% or more of our common
      stock.





Securities
Authorized For Issuance under Equity Compensation Plans





Equity
Incentive Plan





On March 31, 2006, our Board of
Directors adopted the 2006 Equity Incentive Plan, which authorizes us to issue
options for the purchase of up to 2,000,000 shares of our common stock, pursuant
to the terms and conditions set forth therein. The Equity Incentive Plan
authorizes the issuance of incentive stock options (ISO) and non-qualified stock
options (NQOs) to our employees, directors or consultants.





During the year ended December 31,
2006, we issued 1,455,000 stock options to our officers and directors with an
average exercise price of $1.05 per share. Of the stock options issued, 320,000
were vested on September 6, 2006, 150,000 were vested on September 7, 2006,
25,000 were vested on September 15, 2006, 150,000 were vested on December 25,
2006, 660,000 will vest on September 6, 2007 and the balance will
vest


44


on
September 6, 2008. These options expire on September 6, 2008 (240,000),
September 15, 2008 (25,000), December 25, 2006 (150,000), September 6, 2013
(440,000) and September 6, 2016 (600,000). The options had a fair value of
$1,526,989 at the date of grant.





During the month of December 2007, we
issued 425,000 stock options to our officers and directors  with an
average exercise price of $1.25 per share. All of the stock options issued
vested on December 12, 2007. The options had a fair value of $530,543 at the
date of grant.





As of March 30, 2009, we had
approximately five directors and officers eligible to receive options under the
Equity Incentive Plan. Options to buy 1,540,000 shares of common stock were
outstanding under the Equity Incentive Plan and 120,000 shares remained
available for grants under this plan.







ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE






Transactions with Capex Investments
Limited




On
      December 31, 2007, the Company had received loans from CAPEX Investment
      Limited, a shareholder, in the amount of $3,019,332. These loans were
      received over a three year period. These loans carried an interest of 10%
      and were payable on demand. The loan was convertible, over a three year
      period, into common shares at a ratio of one share per dollar of debt. The
      amount owed to stockholder at September 30 is $0. On May 22, 2008, CAPEX
      Investment Limited and Toniland S.A, and Larinton Investments S.A.signed
      an agreement were CAPEX Investment Limited transferred its loans plus the
      accrued interests ($117,968) to Toniland S.A, $1,500,000 and Larinton
      Investments S.A., $1,637,300.




Transactions with POMA Management
Inc.




In 2008,
we received loans from POMA Management Inc. in the amount of $450,000. These
loans carry an interest of 10% and are payable on demand. As of March 31, 2009,
total loans from POMA Management Inc. amounted to $450,000.




Law
Firm of Pellerin Attorneys




In the fiscal year ended December 31,
2008, the law firm of Pellerin Attorneys (Montreal) received CAD$28,651
(approximately US $22,921) from our company and Kaufman Laramée General
Partnership received $3,000 for legal services rendered by Mr. Claude Pellerin
S.N., one of our directors and corporate secretary.




ITEM 14.
            PRINCIPAL ACCOUNTING FEES AND
      SERVICES




(1)
Audit Fees




The
aggregate fees billed for each of the last three fiscal years for professional
services rendered by the principal accountant for our audit of annual
consolidated financial statements and reviews of our interim consolidated
financial statements included in our Form 10-Q and Form 10-K or services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for those fiscal years was:






2008                                           $                      15,105


2007                                           $                      10,675


45


(2)
Audit-Related Fees





The aggregate fees billed in each of
the last three fiscal years for assurance and related services by the principal
accountants that are reasonably related to the performance of the audit or
review of our consolidated financial statements and are not reported in the
preceding paragraph:





2008                                           $                      0


2007                                           $                      0







(3)
Tax Fees





The aggregate fees billed in each of
the last three fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning was:





2008
              $
              0


2007
              $
              0





(4)
All Other Fees





The
aggregate fees billed in each of the last three fiscal years for the products
and services provided by the principal accountant, other than the services
reported in paragraphs (1), (2), and (3) was:





2008
              $
              0


2007
              $
              0








(5) Our
audit committees pre-approval policies and procedures described in paragraph (c)
(7) (i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approves all accounting related activities prior to the performance of any
services by any accountant or auditor.





(6) The
percentage of hours expended on the principal accountants engagement to audit
our consolidated financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountants
full time, permanent employees, to the best of our knowledge, was
0%.





Audit
Committee Pre-Approval Policies





Our Audit
Committee reviewed the audit and non-audit services rendered by Paritz &
Company, P.A. during the periods set forth above and concluded that such
services were compatible with maintaining the auditors’ independence. All audit
and non-audit services performed by our independent accountants are pre-approved
by our Audit Committee to assure that such services do not impair the auditors’
independence from us.
















46


PART
IV. OTHER INFORMATION





ITEM
      15.
            EXHIBITS
      AND CONSOLIDATED FINANCIAL STATEMENT
SCHEDULES





The following is a complete list of
exhibits filed as part of this annual report:





Incorporated
      by referenceExhibit
                  Number
                Document
      Description
                Form
                Date
                Number
                Filed
                  herewith3.1
                Articles
      of Incorporation, as amended.
                SB-2
                5/28/04
                3.13.2
                Bylaws.
                SB-2
                5/28/04
                3.23.3
                Certificate
      of Amendment to Articles of Incorporation
                10-QSB
                12/30/05
                3.33.4
                Bylaws,
      as amended on March 17, 2006
                10-KSB
                4/13/06
                3.410.1
                Letter
      of Intent with XL Generation AG.
                8-K
                7/6/05
                99.110.2
                Share
      Exchange Agreement with XL Generation AG
                8-K
                8/19/05
                99.110.3
                Loan
      Agreement with Capex Investments
                8-K
                9/14/05
                99.110.4
                Form
      of Indemnification Agreement with Capex
                8-K/A
                11/1/05
                10.4Investments
      Limited10.5
                Common
      Stock Purchase Agreement with Capex
      Investments  Limited
                8-K
                11/15/05
                10.510.6
                Common
      Stock Purchase Agreement with Aton Selct Fund Limited
                8-K
                11/15/05
                10.610.7
                Common
      Stock Purchase Agreement with Asset Protection Fund
Limited
                8-K
                11/15/05
                10.710.8
                Series
      A Warrant to Purchase Shares of Common Stock to Capex Investments
      Limited.
                8-K
                11/15/05
                10.810.9
                Series
      A Warrant to Purchase Shares of Common Stock to Aton Select Fund
      Limited
                8-K
                11/15/05
                10.910.10
                Series
      A Warrant to Purchase Shares of Common Stock to Asset Protection Fund
      Limited.
                8-K
                11/15/05
                10.1010.11
                Registration
      Rights Agreement with Capex Investments Limited.
                8-K
                11/15/05
                10.1110.12
                Registration
      Rights Agreement with Aton Select Fund Limited
                8-K
                11/15/05
                10.12


47





10.13
            Registration
      Rights Agreement with Asset Protection Fund Limited
            8-K
            11/15/05
            10.1310.14
            Amendment
      to the Common Stock Purchase Agreement with Aton Select Fund
      Limited.
            8-K
            12/08/05
            10.1410.15
            Amendment
      to the Common Stock Purchase Agreement with Asset
      Protection  Fund Limited.
            8-K
            12/08/05
            10.1510.16
            Lease
      Agreement with 866 U.N. Plaza Associates LLC.
            10-QSB
            12/30/05
            10.1610.17
            Exclusive
      Manufacturing License Agreement and Non-Exclusive Distribution Agreement
      with APW Inc.
            10-QSB
            12/30/05
            10.1710.18
            Common
      Stock Purchase Agreement with Professional Trading Services
      SA.
            SB-2
            1/13/06
            10.1810.19
            Series
      B Warrant to Purchase Shares of Common Stock to Professional Trading
      Services SA.
            SB-2
            1/13/06
            10.1910.20
            Registration
      Rights Agreement with Professional Trading Services SA.
            SB-2
            1/13/06
            10.2010.21
            Amended
      and Restated Common Stock Purchase Agreement with Bank Sal. Oppenheim Jr.
      & Cie. (Switzerland) Limited
            SB-2
            1/13/06
            10.2110.22
            Series
      B Warrant to Purchase Shares of Common Stock to Bank Sal. Oppenheim Jr.
      & Cie. (Switzerland) Limited
            SB-2
            1/13/06
            10.2210.23
            Agreement
      of Withdrawal from Stadium SA.
            SB-2
            1/13/06
            10.2310.24
            License
      Agreement with WKF/5 Ltd.
            SB-2
            1/13/06
            10.2410.25
            Amendment
      to License Agreement with WKF/5 Ltd and Alain Lemieux
            SB-2
            1/13/06
            10.2510.26
            Form
      of Subscription Agreement
            SB-2
            5/28/04
            99.110.27
            Employment
      Agreement with Alain Lemieux
            10-KSB
            4/13/06
            10.2710.28
            Employment
      Agreement with Daniel Courteau
            10-KSB
            4/13/06
            10.2810.29
            Employment
      Agreement with Flemming Munck.
            10-KSB
            4/13/06
            10.29


48





10.30
            Employment
      Agreement with Eric Giguere
            10-KSB
            4/13/06
            10.3010.31
            Endorsement
      Agreement with La Societe 421 Productions
            10-KSB
            4/13/06
            10.3110.32
            Summary
      of terms and conditions of Oral Consulting Agreement with Greendale
      Consulting Limited.
            10-KSB
            4/13/06
            10.3210.33
            Exclusive
      Manufacturing License Agreement with Polyprod Inc.
            10-KSB
            4/13/06
            10.3310.34
            Management
      Fee Arrangement with Polyprod Inc.
            10-KSB
            4/13/06
            10.3410.35
            Supply
      Contract with Febra- Kunststoffe GimbH and BASF
      Aktiengesellschaft.
            10-KSB
            4/13/06
            10.3510.36
            Loan
      Agreement with Fiducie Alain Lemieux.
            10-KSB
            4/13/06
            10.3610.37
            Confirmation
      of Debt.
            10-KSB
            4/13/06
            10.3710.38
            Agreement
      with Daniel Courteau regarding Repayment of loans to Symbior Technologies
      Inc.
            10-KSB
            4/13/06
            10.3810.39
            2006
      Equity Incentive Plan
            10-KSB
            4/13/06
            10.3910.40
            Loan
      Agreement with Albert Beerli
            10-KSB
            4/13/06
            10.4010.41
            Summary
      of terms and conditions of Loan Agreement with Albert
    Beerli
            10-KSB
            4/13/06
            10.4110.42
            Lease
      Agreement with Albert Beerli
            10-KSB
            4/13/06
            10.4210.43
            Memorandum
      regarding XL Generation Canada Inc.
            10-KSB
            4/13/06
            10.4310.44
            Stock
      Purchase Agreement with XL Generation AG and Stadium SA.
            10-KSB
            4/13/06
            10.4410.45
            Common
      Stock Purchase Agreement with Poma Management SA.
            10-QSB
            9/13/06
            10.4510.46
            Common
      Stock Purchase Agreement with Aton Select Fund Limited.
            10-QSB
            9/13/06
            10.4610.47
            Consulting
      Agreement by and between Ecolocap Solutions Inc. and Lakeview Consulting
      LLC
            8-K
            11/11/08
            10.4710.48
            “ERPA”
      with Hong Kong Construction Investment Joint Stock Company
            8-K
            12/23/08
            10.1


49





10.49
            “ERPA”
      with Thuong Hai Joint Stock Company
            8-K
            12/23/08
            10.210.50
            “ERPA”
      with Vietnam Power Development Joint Stock Company
            8-K
            12/23/08
            10.310.51
            “ERPA”
      with Hop Xuan Investment Joint Stock Company, Vietnam
            8-K
            12/23/08
            10.410.52
            “ERPA”
      with ThangLong Education Development and Construction Import Export
      Investment Joint Stock Company.
            8-K
            12/23/08
            10.510.53
            Revised
      Consulting Agreement with Sodexen Inc.
            8-K
            12/23/08
            10.610.54
            Agreement
      with United Best Technology Limited.
            8-K
            12/23/08
            10.710.55
            Escrow
      Agreement with United Best Technology Limited
            8-K
            12/23/08
            10.810.56
            “ERPA”
      with Tan Hiep Phuc Electricity Construction Joint-Stock Company
      Vietnam
            8-K
            12/23/08
            10.910.57
            “ERPA”
      with Tuan Anh Hydraulic Development and Construction Investment
      Corporation, Vietnam
            8-K
            12/23/08
            10.1010.58
            “ERPA”
      with Lao Cai Energy & Resources Investment Joint Stock Company,
      Vietnam
            8-K
            12/23/08
            10.1110.59
            “ERPA”
      with Xiangton Iron and Steel Group Co. Ltd.
            8-K
            12/23/08
            10.12
            `10.60
            “ERPA”
      with Hunan Valin Xiangton Iron & Steel Co. Ltd.
            8-K
            12/23/08
            10.1310.61
            “ERPA”
      with Hebi Coal Industry (Group) Co. Ltd.
            8-K
            12/23/08
            10.1410.62
            “ERPA”
      with Hebei Jinlong Cement Group Co., Ltd.
            8-K
            12/23/08
            10.1510.63
            “ERPA”
      with Bao Tan Hydro Electric Joint-Stock Company
            8-K
            12/23/08
            10.1610.64
            “ERPA”
      with Construction and Infrastruction Development Joint-Stock Company
      Number Nine
            8-K
            12/23/08
            10.1710.65
            Greenhouse
      Gas Offset Management Services Representation Agreement
            8-K
            12/23/08
            10.1810.66
            “ERPA”
      with Xinjiang Xiangjianfeng Energy and Technology Development Co.
      Ltd.
            8-K
            12/23/08
            10.19


50





10.67
            Technical
      Service Agreement with Xinjiang Xiangjinfeng Energy and Technology
      Development Co., Ltd.
            8-K
            12/23/08
            10.2010.68
            Technical
      Service Agreement with Hebei Fengda Metallized Pellet Co.,
      Ltd.
            8-K
            12/23/08
            10.2110.69
            “ERPA”
      with Hebei Fengda Metallized Pellet Co., Ltd.
            8-K
            12/23/08
            10.2210.70
            “ERPA”
      with Shandong Chengzeyuan Environment Protection Engineering Co.
      Ltd.
            8-K
            12/23/08
            10.2310.71
            Technical
      Services Agreement with Shandong Chengzeyuan Environment Protection
      Engineering Co., Ltd.
            8-K
            12/23/08
            10.2410.72
            Technical
      Services Agreement with Leshan Kingssun Group Co. Ltd.
            8-K
            12/23/08
            10.2510.73
            “ERPA”
      with Leshan Kingssun Group Co., Ltd.
            8-K
            12/23/08
            10.2614.1
            Code
      of Ethics.
            10-KSB
            3/31/08
            14.131.1
            Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.
            
            
            
            X31.2
            Certification
      of Principal Financial Officer
            
            
            
            Xpursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
      Executive Officer.
            
            
            
            X32.2
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
      Financial Officer.
            
            
            
            X99.1
            Audit
      Committee Charter.
            10-KSB
            3/31/08
            99.199.2
            Executive
      Committee Charter
            10-KSB
            3/31/08
            99.299.3
            Nominating
      and Corporate Governance Committee Charter
            10-KSB
            3/31/08
            99.399.4
            Stock
      Option Plan
            10-KSB
            3/31/08
            99.4











51


SIGNATURES





In accordance with Section 13 or 15(d)
of the Securities and Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on this
15TH
day of April 2009.








ECOLOCAP
      SOLUTIONS INC .BY:
                TRI VU TRUONGTri
      Vu TruongPrincipal
      Executive OfficerBY:
                MICHEL ST-PIERREMichel
      St-PierrePrincipal
      Financial Officer and
                  Principal
      Accounting Officer








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








Signature
                                                    Title
                                                    DateTRI
      VU TRUONG
                                                    President,
      Chief Executive Officer, Treasurer, Chief
                                                    April
      15, 2009Tri
      Vu Truong
                                                    Financial
      Officer, and a member of the Board of DirectorsDirector
                                                    April
      __, 2009Mark
      LawsonDirector
                                                    April
      __, 2009Robert
      ClarkeCLAUDE PELLERIN
                                                    Director
                                                    April
      15, 2009Claude
      PellerinALBERT BEERLI
                                                    Director
                                                    April
      15, 2009Albert
      BeerliMICHEL ST PIERRE
                                                    Chief
      Financial Officer
                                                    April
      15, 2009Michel
      St. Pierre





52


EXHIBIT
INDEX




Incorporated
      by referenceExhibit
              Number
            Document
      Description
            Form
            Date
            Number
            Filed
              herewith





3.1
            Articles
      of Incorporation, as amended.
            SB-2
            5/28/04
            3.13.2
            Bylaws.
            SB-2
            5/28/04
            3.23.3
            Certificate
      of Amendment to Articles of Incorporation
            10-QSB
            12/30/05
            3.33.4
            Bylaws,
      as amended on March 17, 2006
            10-KSB
            4/13/06
            3.410.1
            Letter
      of Intent with XL Generation AG.
            8-K
            7/6/05
            99.110.2
            Share
      Exchange Agreement with XL Generation AG
            8-K
            8/19/05
            99.110.3
            Loan
      Agreement with Capex Investments
            8-K
            9/14/05
            99.110.4
            Form
      of Indemnification Agreement with Capex
            8-K/A
            11/1/05
            10.4Investments
      Limited10.5
            Common
      Stock Purchase Agreement with Capex
      Investments  Limited
            8-K
            11/15/05
            10.510.6
            Common
      Stock Purchase Agreement with Aton Selct Fund Limited
            8-K
            11/15/05
            10.610.7
            Common
      Stock Purchase Agreement with Asset Protection Fund
Limited
            8-K
            11/15/05
            10.710.8
            Series
      A Warrant to Purchase Shares of Common Stock to Capex Investments
      Limited.
            8-K
            11/15/05
            10.810.9
            Series
      A Warrant to Purchase Shares of Common Stock to Aton Select Fund
      Limited
            8-K
            11/15/05
            10.910.10
            Series
      A Warrant to Purchase Shares of Common Stock to Asset Protection Fund
      Limited.
            8-K
            11/15/05
            10.1010.11
            Registration
      Rights Agreement with Capex Investments Limited.
            8-K
            11/15/05
            10.1110.12
            Registration
      Rights Agreement with Aton Select Fund Limited
            8-K
            11/15/05
            10.1210.13
            Registration
      Rights Agreement with Asset Protection Fund Limited
            8-K
            11/15/05
            10.1310.14
            Amendment
      to the Common Stock Purchase Agreement with Aton Select Fund
      Limited.
            8-K
            12/08/05
            10.1410.15
            Amendment
      to the Common Stock Purchase Agreement with Asset
      Protection  Fund Limited.
            8-K
            12/08/05
            10.15


53





10.16
            Lease
      Agreement with 866 U.N. Plaza Associates LLC.
            10-QSB
            12/30/05
            10.1610.17
            Exclusive
      Manufacturing License Agreement and Non-Exclusive Distribution Agreement
      with APW Inc.
            10-QSB
            12/30/05
            10.1710.18
            Common
      Stock Purchase Agreement with Professional Trading Services
      SA.
            SB-2
            1/13/06
            10.1810.19
            Series
      B Warrant to Purchase Shares of Common Stock to Professional Trading
      Services SA.
            SB-2
            1/13/06
            10.1910.20
            Registration
      Rights Agreement with Professional Trading Services SA.
            SB-2
            1/13/06
            10.2010.21
            Amended
      and Restated Common Stock Purchase Agreement with Bank Sal. Oppenheim Jr.
      & Cie. (Switzerland) Limited
            SB-2
            1/13/06
            10.2110.22
            Series
      B Warrant to Purchase Shares of Common Stock to Bank Sal. Oppenheim Jr.
      & Cie. (Switzerland) Limited
            SB-2
            1/13/06
            10.2210.23
            Agreement
      of Withdrawal from Stadium SA.
            SB-2
            1/13/06
            10.2310.24
            License
      Agreement with WKF/5 Ltd.
            SB-2
            1/13/06
            10.2410.25
            Amendment
      to License Agreement with WKF/5 Ltd and Alain Lemieux
            SB-2
            1/13/06
            10.2510.26
            Form
      of Subscription Agreement
            SB-2
            5/28/04
            99.110.27
            Employment
      Agreement with Alain Lemieux
            10-KSB
            4/13/06
            10.2710.28
            Employment
      Agreement with Daniel Courteau
            10-KSB
            4/13/06
            10.2810.29
            Employment
      Agreement with Flemming Munck.
            10-KSB
            4/13/06
            10.2910.30
            Employment
      Agreement with Eric Giguere
            10-KSB
            4/13/06
            10.3010.31
            Endorsement
      Agreement with La Societe 421 Productions
            10-KSB
            4/13/06
            10.3110.32
            Summary
      of terms and conditions of Oral Consulting Agreement with Greendale
      Consulting Limited.
            10-KSB
            4/13/06
            10.3210.33
            Exclusive
      Manufacturing License Agreement with Polyprod Inc.
            10-KSB
            4/13/06
            10.3310.34
            Management
      Fee Arrangement with Polyprod Inc.
            10-KSB
            4/13/06
            10.34


54





10.35
            Supply
      Contract with Febra- Kunststoffe GimbH and BASF
      Aktiengesellschaft.
            10-KSB
            4/13/06
            10.3510.36
            Loan
      Agreement with Fiducie Alain Lemieux.
            10-KSB
            4/13/06
            10.3610.37
            Confirmation
      of Debt.
            10-KSB
            4/13/06
            10.3710.38
            Agreement
      with Daniel Courteau regarding Repayment of loans to Symbior Technologies
      Inc.
            10-KSB
            4/13/06
            10.3810.39
            2006
      Equity Incentive Plan
            10-KSB
            4/13/06
            10.3910.40
            Loan
      Agreement with Albert Beerli
            10-KSB
            4/13/06
            10.4010.41
            Summary
      of terms and conditions of Loan Agreement with Albert
    Beerli
            10-KSB
            4/13/06
            10.4110.42
            Lease
      Agreement with Albert Beerli
            10-KSB
            4/13/06
            10.4210.43
            Memorandum
      regarding XL Generation Canada Inc.
            10-KSB
            4/13/06
            10.4310.44
            Stock
      Purchase Agreement with XL Generation AG and Stadium SA.
            10-KSB
            4/13/06
            10.4410.45
            Common
      Stock Purchase Agreement with Poma Management SA.
            10-QSB
            9/13/06
            10.4510.46
            Common
      Stock Purchase Agreement with Aton Select Fund Limited.
            10-QSB
            9/13/06
            10.4610.47
            Consulting
      Agreement by and between Ecolocap Solutions Inc. and Lakeview Consulting
      LLC
            8-K
            11/11/08
            10.4710.48
            “ERPA”
      with Hong Kong Construction Investment Joint Stock Company
            8-K
            12/23/08
            10.110.49
            “ERPA”
      with Thuong Hai Joint Stock Company
            8-K
            12/23/08
            10.210.50
            “ERPA”
      with Vietnam Power Development Joint Stock Company
            8-K
            12/23/08
            10.310.51
            “ERPA”
      with Hop Xuan Investment Joint Stock Company, Vietnam
            8-K
            12/23/08
            10.410.52
            “ERPA”
      with ThangLong Education Development and Construction Import Export
      Investment Joint Stock Company.
            8-K
            12/23/08
            10.510.53
            Revised
      Consulting Agreement with Sodexen Inc.
            8-K
            12/23/08
            10.6


55





10.54
            Agreement
      with United Best Technology Limited.
            8-K
            12/23/08
            10.710.55
            Escrow
      Agreement with United Best Technology Limited
            8-K
            12/23/08
            10.810.56
            “ERPA”
      with Tan Hiep Phuc Electricity Construction Joint-Stock Company
      Vietnam
            8-K
            12/23/08
            10.910.57
            “ERPA”
      with Tuan Anh Hydraulic Development and Construction Investment
      Corporation, Vietnam
            8-K
            12/23/08
            10.1010.58
            “ERPA”
      with Lao Cai Energy & Resources Investment Joint Stock Company,
      Vietnam
            8-K
            12/23/08
            10.1110.59
            “ERPA”
      with Xiangton Iron and Steel Group Co. Ltd.
            8-K
            12/23/08
            10.12
            `10.60
            “ERPA”
      with Hunan Valin Xiangton Iron & Steel Co. Ltd.
            8-K
            12/23/08
            10.1310.61
            “ERPA”
      with Hebi Coal Industry (Group) Co. Ltd.
            8-K
            12/23/08
            10.1410.62
            “ERPA”
      with Hebei Jinlong Cement Group Co., Ltd.
            8-K
            12/23/08
            10.1510.63
            “ERPA”
      with Bao Tan Hydro Electric Joint-Stock Company
            8-K
            12/23/08
            10.1610.64
            “ERPA”
      with Construction and Infrastruction Development Joint-Stock Company
      Number Nine
            8-K
            12/23/08
            10.1710.65
            Greenhouse
      Gas Offset Management Services Representation Agreement
            8-K
            12/23/08
            10.1810.66
            “ERPA”
      with Xinjiang Xiangjianfeng Energy and Technology Development Co.
      Ltd.
            8-K
            12/23/08
            10.1910.67
            Technical
      Service Agreement with Xinjiang Xiangjinfeng Energy and Technology
      Development Co., Ltd.
            8-K
            12/23/08
            10.2010.68
            Technical
      Service Agreement with Hebei Fengda Metallized Pellet Co.,
      Ltd.
            8-K
            12/23/08
            10.2110.69
            “ERPA”
      with Hebei Fengda Metallized Pellet Co., Ltd.
            8-K
            12/23/08
            10.2210.70
            “ERPA”
      with Shandong Chengzeyuan Environment Protection Engineering Co.
      Ltd.
            8-K
            12/23/08
            10.23


56





10.71
            Technical
      Services Agreement with Shandong Chengzeyuan Environment Protection
      Engineering Co., Ltd.
            8-K
            12/23/08
            10.2410.72
            Technical
      Services Agreement with Leshan Kingssun Group Co. Ltd.
            8-K
            12/23/08
            10.2510.73
            “ERPA”
      with Leshan Kingssun Group Co., Ltd.
            8-K
            12/23/08
            10.2614.1
            Code
      of Ethics.
            10-KSB
            3/31/08
            14.131.1
            Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.
            
            
            
            X31.2
            Certification
      of Principal Financial Officer
            
            
            
            Xpursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
      Executive Officer.
            
            
            
            X32.2
            Certification
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief
      Financial Officer.
            
            
            
            X99.1
            Audit
      Committee Charter.
            10-KSB
            3/31/08
            99.199.2
            Executive
      Committee Charter
            10-KSB
            3/31/08
            99.299.3
            Nominating
      and Corporate Governance Committee Charter
            10-KSB
            3/31/08
            99.399.4
            Stock
      Option Plan
            10-KSB
            3/31/08
            99.4








57